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 3, Problem 3IRP
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The Bingabong CPA firm is swamped with work and is considering doing some outsourcing of tax work to a third-party service provider (TSP). Which of the following is an accurate statement regarding its responsibilities?
Group of answer choices
a. Outsourcing work to TSPs can threaten independence, but not objectivity or integrity.
b. Outsourcing work to TSPs that provide only administrative support will likely not threaten objectivity and/or integrity.
c. If Bingabong uses TSPs to perform substantive services and those TSPs are reputable, it need not inform clients before sharing confidential client information with the TSPs.
d. If a client objects to Bingabong outsourcing services, Bingabong should investigate whether the client has legitimate grounds before proceeding.
Taxpayers face the risk of the 20% accuracy-related penalty when they take return positions that are too aggressive or otherwise problematic...
(a) Section 6662 itself contains no escape mechanisms whatsoever, so a tax-payer’s only available defense against the penalty is “good faith and reasonable cause” per § 6664(c).
(b) Section 6662 contains two stated triggers, “negligence” and “substantial understatement,” and the IRS cannot assert the penalty unless both are present.
(c) Unless a taxpayer ultimately wins with respect to the underlying tax issue(s) (the asserted tax deficiency), it is impossible to win on the penalty issue.
(d) If a taxpayer does win with respect to the underlying tax issue(s), the penalty assertion becomes moot.
The IRS requires companies that use LIFO for financial statement reporting to also use LIFO to calculate cost of goods sold on their tax returns. Why do you think the IRS wants companies to be consistent with the cost-flow assumption they use? What benefit could a company receive by choosing a different method for reporting than for its tax return?
Chapter 3 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 3 - Does the NPV of future cash flows increase or...Ch. 3 - Explain the relationship between the degree of...Ch. 3 - Does the after-tax cost of a deductible expense...Ch. 3 - Prob. 4QPDCh. 3 - Prob. 5QPDCh. 3 - Prob. 6QPDCh. 3 - Prob. 7QPDCh. 3 - Which type of tax law provision should be more...Ch. 3 - In the U.S. system of criminal justice, a person...Ch. 3 - Identify two reasons why a firms actual marginal...
Ch. 3 - Prob. 11QPDCh. 3 - Prob. 12QPDCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Use a 5 percent discount rate to compute the NPV...Ch. 3 - Consider the following opportunities: Opportunity...Ch. 3 - Prob. 6APCh. 3 - Refer to the income tax rate structure in the...Ch. 3 - Prob. 8APCh. 3 - Company N will receive 100,000 of taxable revenue...Ch. 3 - Prob. 10APCh. 3 - Investor B has 100,000 in an investment paying 9...Ch. 3 - Firm E must choose between two alternative...Ch. 3 - Company J must choose between two alternate...Ch. 3 - Firm Q is about to engage in a transaction with...Ch. 3 - Corporation ABC invested in a project that will...Ch. 3 - Prob. 16APCh. 3 - Investor W has the opportunity to invest 500,000...Ch. 3 - Prob. 18APCh. 3 - Prob. 19APCh. 3 - Prob. 20APCh. 3 - Prob. 21APCh. 3 - Prob. 1IRPCh. 3 - Firm V must choose between two alternative...Ch. 3 - Prob. 3IRPCh. 3 - Refer to the facts in problem 3. Company WB is...Ch. 3 - Prob. 5IRPCh. 3 - Prob. 6IRPCh. 3 - Prob. 7IRPCh. 3 - Prob. 8IRPCh. 3 - Prob. 9IRPCh. 3 - Prob. 1TPCCh. 3 - Firm D is considering investing 400,000 cash in a...
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