16. Is this statement true about underpayment penalties. A. The taxpayer will never receive an underpayment penalty as long as their taxes are paid before their original due date. B. If this is for the first time you have received this penalty you may request a penalty abatement with the IRS. C. Penalties are assessed when the tax is underpaid by more than 50%.

16. Is this statement true about underpayment penalties. A. The taxpayer will never receive an underpayment penalty as long as their taxes are paid before their original due date. B. If this is for the first time you have received this penalty you may request a penalty abatement with the IRS. C. Penalties are assessed when the tax is underpaid by more than 50%.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter12: Tax Administration And Tax Planning

Section: Chapter Questions

Problem 20MCQ: If the IRS owes a taxpayer a refund, the law generally provides that the IRS must pay interest on...

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Which of the following statements is false? Select one: O A. In general, individual taxpayers are required to file a tax return only if their gross income exceeds the standard deduction OB. The penalty for failure to file is more severe than the penalty for failure to pay OC. Taxpayers may file a tax return even when they are not required to do so to obtain a refund of income taxes withheld OD. Individual tax returns are always due on April 15 for calendar-year individuals
Which of the following statements about credits is false? A. Credits reduce a taxpayer's liability dollar for dollar. B. Not all credits are refundable. C. The CARES Act stimulus payments were advance credits for 2020. D.Nonrefundable credits are limited to the tax balance due.
H6. 13 A claim for refund is a request for reimbursement of the overpayment of taxes paid in previous years. To be valid, a claim for refund must include which of the following features? Select one: a. The claim for refund can be made by telephone or in writing. b. The claim for refund must be signed only by the taxpayer c. The claim for refund must be filed within the set statute of limitations d. All of the above are correct Please explain also wrong options and explain with details
20.A taxpayer certificate of deposit that was set to mature the end of next year is needed for a down payment on their residence the taxpayer decided to cash out the certificate of deposit now is the following scenario accurate. A. The taxpayer must report their total amount of interest and can deduct the penalty on their tax return. B. The total interest income of $1,600 and a taxpayer early withdrawal penalty is $300 the taxpayer net the two amount together and report $1300 interest on a schedule B. C. Both the total interest amount in the early withdrawal penalties are reported to the taxpayer on form 1099-INT.
Ee.61.
For any given year, your income tax payable can never exceed income tax expense. a) True b) False
Indicate whether the following statements are "True" or "False" regarding the statute of limitations. a. If no return is filed or a fraudulent return is filed, assessments can be made at any time. b. If a taxpayer omits an amount of gross income in excess of 25 percent of the gross income stated on the return, the statute of limitations does not apply. c. In general, any tax that is imposed must be assessed within three years of the later of (a) the filing date of the return or (b) the unextended due date of the return. d. The statute of limitations may be extended for a fixed period of time by mutual consent of the IRS and the taxpayer.
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Why do most companies prefer to use an NOL Carryback instead of an NOL Carryforward when both options are allowed by tax law? (NI&60) O It allows them to reduce their income tax expense in the current year. O It allows them to reduce their future income tax expense. O It allows them to increase their income tax refund in the current year. It allows them to increase their future income tax refunds.
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2. S1: The excess of allowable deductions over gross sales is net operating loss. S2: Net operating loss is a deduction from gross income even if the taxpayer chose optional standard deduction. S3: If net operating loss is incurred in 2021, the taxpayer can carry over the loss in the immediately succeeding three (3) years Which is TRUE?
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