PRINCIPLES OF TAXATION F/BUS...(LL)
23rd Edition
ISBN: 9781260433197
Author: Jones
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 18, Problem 1QPD
To determine
Explain the reason for which Ms. H must pay interest.
Expert Solution & Answer
Explanation of Solution
Federal tax law impose charge on taxpayers as interest for the tax deficiencies without considering the reason such tax deficiency. It is just like bank charges interest on loan irrespective of delayed payment of loan without considering the reason. Federal government charges interest to satisfy the time value of money.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Your new client, Ms. X, had her 2018 tax return audited last year and found the whole experience so painful that she never wants to take a chance on ever having to deal with the IRS again. (She should have hired you to help defend the audit, but didn’t.) Specifically, she lost a very big part of her research tax credit because the IRS reclassified a large category of expenses that she had included in calculating the credit as “not sufficiently research-related.”
As to her 2019 return, you note that Ms. X has even more expenses in that same category, meaning that her tax credit would be much larger if they were included in the calculation. And, more importantly, you’re aware that a Tax Court decision from earlier this year held, in another taxpayer’s almost identical circumstances, that the very same category of expenses was properly included in the research credit calculation. Can you, or should you, advise Ms. X that her own expenses in this same category can be used to her benefit in…
After Bill and Mercedes' tax return was selected for audit, Bill read on the Internet
speculation that filing a paper tax return (instead of filing electronically) and extending a tax
return deadline decrease the chance of IRS audit. Bill has convinced Mercedes that they need
to use these strategies in the future and look for other ways to avoid audit. Questions for
discussion include:
1. What are the timing requirements for filing a tax return and paying taxes owed?
2. Does Bill's action likely violate any IRS regulation?
3. If Bill's action does not violate IRS rules, it is ethical?
Please make sure to respond to other students' discussion answers, especially if they have a
different point of view than yours.
Your new tax return client, Ms. X, had her 2018 tax return audited last year and found the whole experience so painful that she never wants to take a chance on ever having to deal with the IRS again. (She should have hired you to help de-fend the audit, but didn’t.) Specifically, she lost a very big part of her research tax credit because the IRS reclassified a large category of expenses that she had in-cluded in calculating the credit as “not sufficiently research-related.”
As to her 2019 return, you note that Ms. X has even more expenses in that same category, meaning that her tax credit would be much larger if they were included in the calculation. And, more importantly, you’re aware that a Tax Court decision from earlier this year held, in another taxpayer’s almost identical circumstances, that the very same category of expenses was properly included in the research credit calculation. Can you, or should you, advise Ms. X that her own expenses in this same category can be used to…
Chapter 18 Solutions
PRINCIPLES OF TAXATION F/BUS...(LL)
Ch. 18 - Prob. 1QPDCh. 18 - Prob. 2QPDCh. 18 - Prob. 3QPDCh. 18 - Prob. 4QPDCh. 18 - Prob. 5QPDCh. 18 - Prob. 6QPDCh. 18 - Prob. 7QPDCh. 18 - Prob. 8QPDCh. 18 - Prob. 9QPDCh. 18 - Prob. 10QPD
Ch. 18 - Prob. 11QPDCh. 18 - Prob. 12QPDCh. 18 - Prob. 13QPDCh. 18 - Prob. 14QPDCh. 18 - Prob. 1APCh. 18 - Prob. 2APCh. 18 - Prob. 3APCh. 18 - Prob. 4APCh. 18 - Prob. 5APCh. 18 - Prob. 6APCh. 18 - Prob. 7APCh. 18 - Prob. 8APCh. 18 - Prob. 9APCh. 18 - Prob. 10APCh. 18 - Prob. 11APCh. 18 - Prob. 12APCh. 18 - A revenue agent determined that Ms. Owen underpaid...Ch. 18 - Prob. 14APCh. 18 - Prob. 15APCh. 18 - Prob. 16APCh. 18 - Prob. 17APCh. 18 - Prob. 18APCh. 18 - Prob. 19APCh. 18 - Prob. 20APCh. 18 - Prob. 22APCh. 18 - Prob. 8IRPCh. 18 - Prob. 9IRPCh. 18 - Prob. 1RPCh. 18 - Prob. 2RPCh. 18 - Prob. 1TPCCh. 18 - Prob. 2TPC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The Taxpayer Advocate Service (TAS) can help taxpayers with what type of assistance? As a first step, rather than dealing with the IRS, when the taxpayer believes there are unusual circumstances involved. When the taxpayer feels the resolution applied by the IRS is unreasonable. If there is a financial difficulty, emergency, or hardship and the IRS needs to move faster than normal. When an audit results in a significant change and the deadline for appeal has passed. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardCraig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be? Please show all calculations to demonstrate how you arrived at your answer. In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website.arrow_forwardJulia is in the process of auditing the legal liability section of the financial statements. The controller indicated that he did not want her to contact their external lawyers and he is refusing to grant her access to the detail of the legal expense for the year and any legal invoices. What should Julia do in this situation? Indicate the steps, in the proper order, that should be taken.arrow_forward
- If the audit does not turn out favorably: (Select all that apply.) A. Mrs. Hubbard can file an appeal with the auditor by presenting additional materials. B. Mrs. Hubbard can file an appeal with the auditor's manager. C. Mrs. Hubbard can go to a tax court. D. Mrs. Hubbard can file a formal appeal with the IRS.arrow_forwardMax and Annie are roommates sharing an apartment. Although they know each other well, they have respect for each other’s privacy. Thus, when Max’s Form 1040 was audited by the IRS, he made no mention of the audit to Annie. When Annie was clearing the answering machine that they shared, she heard the following message: “Max, this is Richard, the IRS auditor. My figures show that you owe the government $10,000 in taxes and another $4,500 in penalties and interest.” When Annie brought up the message during dinner conversation that night, Max was furious. How could the IRS be so careless as to broadcast this news to a stranger? Did not he have any privacy and confidentiality rights? Max calls you to determine whether he might have a case against the IRS or Richard, the agent. Prepare a file memo assessing Max’s position.arrow_forwardA revenue agent determined that Ms. Osaka underpaid income tax by $48,100 and concluded that $9,200 was caused by inadequate record keeping while the remainder was caused by an understandable misapplication of a complex rule of law. Required: Compute the negligence penalty that the revenue agent can impose on Ms. Osaka. Accuracy-related penaltyarrow_forward
- Ms. Zakiya is appointed as auditor by “Muscat Bakery LLC”. She was responsible to provide factual audit report to the owner of “Muscat Bakery LLC.” During her audit work she realised that few client staff are not cooperating to provide important business operational data. Mr. Ahemed offer some costly gift to Ms. Zakiya to faver the audit report. She was not aware of tax policy which Muscat Bakery was following also wants to know the new accounting policies of Muscat Bakery LLC.You have to explain the required qualities by Ms. Zakiya to give her fare and quality audit report.arrow_forwardDrag and drop the best response into the blank box. Shelley Bowman, CPA, obtained her designation in 2000. Since that time, she has built up a significant tax practice. In late 2021, a new client approached Shelley and asked her to perform an audit engagement. Believing this could lead to a substantial amount of tax work in the future, Shelley agreed, even though she had never completed an audit, nor taken any assurance courses since 1980. Violation of Competence No violation of the Rules of Professional Conduct Violation of Independence - self-interest Violation of the Charter of Conduct Violation of Independence - familiarity Violation of Independence - self reviewarrow_forwardNed Naïve operated several franchise stores for a large company, and, at the home office’s suggestion, consolidated its payroll and accounting functions with Andy the Accountant. Andy is not a CPA. Last year, Andy began embezzling the taxpayer’s escrowed payroll tax withholdings and failed to remit required amounts for the four quarters. The IRS assessed penalties on Ned for failing to make the proper withholding deposits during the year. What are factual issues, legal issues and primary research questions on this case?arrow_forward
- A tax return client was audited for a prior year return and assessed a tax deficiency because a material deduction was disallowed. Nevertheless, the client insists on taking the very same kind of deduction on this year’s return... (a) A CPA absolutely may not prepare or sign the client’s return for this year un-less it conforms to the audit result for the prior year. (b) A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA determines as a matter of in-dependent professional judgment that the deduction is proper. (c) A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA receives a formal tax opinion from a law firm or from an unaffiliated CPA affirming that it is more likely than not that the deduction would be sustained on its merits if litigated.arrow_forwardYou and your client have been working together on an IRS audit. It has been rather frustrating. The IRS has been really stubborn, and their final answer is they are not going to accept your offer by issuing a 90 Day Letter. You have three options for your client. What are they and what are the advantages and disadvantages of each?arrow_forwardMiss Nsiah is a qualified chartered accountant who prepares financial statements for a firm located at Tesano. Miss Nsiah does not qualify for a practicing certificate and so she does not provide audit serviceto the client. This is her first year of preparing financial statements for the firm. When compiling the most recent accounts, she detected some material errors in the previous financial statements. It seemed that theaccounts were based on incomplete records as certain costs were excluded, either deliberately or because records were not maintained.The Chief Executive Officer of the firm has also requested some additional work to be completed on a complex tax issue. However, she has no prior experience and does not feel competent to the work. The CEO would also like her to provide an audit opinion as they are planning to apply for funding from a bank and the bank would like some further assurance.Required:With reference to Code of Ethics for accountants, discuss the ethical…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT