Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Chapter 18, Problem 2TPC
To determine
Analyze the litigation strategy of CMP Corporation in selecting a trial court.
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Indicate whether the following statements are "True" or "False" regarding the administrative powers of the IRS.
a.
If the taxpayer meets the record-keeping requirement and substantiates income and deductions properly, the IRS bears the burden of proof in establishing a tax deficiency during litigation.
b.
The Code permits the IRS to assess a deficiency and to demand payment for the tax. However, no assessment or effort to collect the tax may be made until 30 days after a statutory notice of a deficiency (a 30-day letter) is issued.
c.
If the taxpayer neglects or refuses to pay the tax after receiving the demand for payment, a lien in favor of the IRS is placed on all property (realty and personalty, tangible and intangible) belonging to the taxpayer.
Which of the following is wrong?
Exempt corporations are subject to income tax on their income from unrelated activities.
Government-Owned and Controlled Corporations are subject to regular corporate income tax.
Exempt corporations who filed late are not subject to penalties because they have no tax due.
None of the above.
The revenue agent who audited Ms. Hsui's Form 1040 discovered a $15,250 deduction that wasn't allowed by the tax law. The
improper deduction reduced Ms. Hsui's tax by $5,033. The total tax deficiency for the year under audit was $6,490.
Required:
a. Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in preparing
the tax return.
b. Compute the maximum penalty if the agent concludes that the improper deduction represented Ms. Hsui's deliberate attempt to
cheat the government by underpaying tax.
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in
preparing the tax return.
Note: Round your answer to the nearest whole dollar amount.
Chapter 18 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
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
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