Indicate whether the following acts can be considered as tax evasion/tax management/ tax planning or otherwise: 1. Sushil is using a motor car for his personal purposes, but charges as businessexpenditure. 2. SQL Ltd. pays advance tax by estimating his total income in previous year to ensure timely compliance.

Indicate whether the following acts can be considered as tax evasion/tax management/ tax planning or otherwise: 1. Sushil is using a motor car for his personal purposes, but charges as businessexpenditure. 2. SQL Ltd. pays advance tax by estimating his total income in previous year to ensure timely compliance.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2
Determine the amount of the late filing and late payment penalties that apply for the following taxpayers. Required: a. Jolene filed her tax return by its original due date but did not pay the $2,000 in taxes she owed with the return until one and a half months later. b. Oscar filed his tax return and paid his $3,000 tax liability five months late. c. Wilfred, attempting to evade his taxes, did not file a tax return or pay his $10,000 in taxes for several years. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Required C Wilfred, attempting to evade his taxes, did not file a tax return or pay his $10,000 in taxes for several years. Late filing and late payment penalties $ 7,500
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
As a tax consultant you receive on continuous basis inquiries and tax forms from your clients. Following are independent inquires that you have to check and reply back to your clients. For each enquiry below and listed 1 to 4, comment on whether the given calculations are correct or not, explain your answer and give the correct calculations by showing your workings if you disagree. 1. Jurisdiction A imposes income tax on businesses. The income tax is equal to 1% of income up to $ 200,000 and 1.5% of income in excess of $200,000. Nasha Company reported $1,564,000 net income for the year ended December 2020. Nasha's accountant reported an income tax of $23,460. 2. Taxpayer D has taxable income of $172,450. He operates in a Jurisdiction where the tax equals 10% of the first $34,000, 15% from $34,001 to $138,000 and 25% in excess of $138,000. Taxpayer D believes that his average tax rate equals his marginal tax rate of 25%. 3. Taxpayer E lives in a jurisdiction which impose 15% individual…
If a taxpayer chooses to have his dividends automatically reinvested in the corporation's stock, they are not reported on the tax return nor taxed because he did not receive the money. Choose one a. True answer. b. False Which of the following items is generally not taxable on a Federal return? Choose one a. Income from illegal activity answer. b. Inheritance c. Fees received for jury duty d. Tips under $20 a month e. None of these
Compute the income tax payable, if any. Relevant information: YOU are the Accountant of Pa-Mine Corporation (PMC) which was established in 2015. PMC is a company engaged in the business of buying and selling merchandise. PMC is registered and is under the jurisdiction of BIR RDO No. 32-Manila with assigned Taxpayer Identification No. 123-456-789-00000. Your TIN is 987-654-321-0000. PMC’s registered address is N. Reyes St., Sampaloc, Manila. Additional information: PMC chose itemized deduction The financial records for taxable year 2021 of PMC showed the following: Gross sales – Php 10,000,000 Cost of sales – Php 5,000,000 Expenses – Salaries and wages of employees – Php 2,000,000 Depreciation – Php 500,000 Rent expense – Php 500,000 Utilities in office – Php 200,000 Gas and oil – Php 200,000 Representation expense – Php 50,000 Registration fees of car and other taxes – Php 50,000 3. Your clients withheld the following and gave you Form 2307: 1st quarter 2307 – Php 50,000 2nd…
22. As a tax return preparer for The Fernando Rodriguez Tax & Accounting Service, you have been asked to calculate the missing information for one of the firm's tax clients. The following table gives the standard deduction for various filing statuses. Standard Deductions Single or married filing separately $12,000 Married filing jointly or surviving spouse $24,000 Head of household $18,000 65 or older and/or blindand/or someone else canclaim you (or your spouseif filing jointly) as a dependent: Varies(See www.irs.gov for information.) Using the standard deduction table above, complete the following table (in $). Name Filing Status Income Adjustments toIncome Adjusted GrossIncome StandardDeduction ItemizedDeductions TaxableIncome Lerner married filingjointly $ $1,266 $47,378 $ $5,429 $ When finding your client's taxable income, which deduction did you use? standard deduction itemized deductions
For each of the following situations, indicate the nature and amount of the penalty that could be imposed. Description of the Penalty AND Penalty Amount $ a. Larry is a tax protester and files his tax return in the name of “Mickey Mouse.” b. Anne writes a check for $900 in payment of her taxes that she knows will not clear the bank due to insufficient funds in her account. c. Gerald understated his tax liability by $10,000. The total amount of tax that should have been shown on his return was $70,000.
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2) Jane Doe of London, Ontario is a car salesperson who earned commissions totaling $300,000 in the tax year 2020. These commissions included vehicle sales and commissions on warranty sales. On her 2020 personal income tax return, Jane reported only the commissions related to the warranty sales in the amount of $100,000. Discuss the following: Were these instances of tax avoidance or evasion (define? Letter of the law vs spirit of the law) What was done wrong (how were taxes affected) What possible consequences? (payment-balance, interest, penalties, charges, jail, etc)
Kyle provides landscaping services to a number of clients. In filing his current-year income tax return, Kyle excluded revenue received from cash customers. If Kyle is found guilty of fraud, he may be subject to all of the following except: a. Other penalties as provided by law. b. A fine for not more than $250,000. c. Being held responsible for the costs of prosecution. d. Imprisonment for not more than 2 years
Which of the following would not be considered to be tax planning. An arrangement that: Reduces or defers assessable income Maximises or accelerate deductions Utilise different tax rules Maximises tax offsets Splits or diverts income Does not disclose income Kenny is an Australian resident adult individual who’s professional footballer and employee of an Australian football league club. During the income year, he received and derived the following amounts: $200,000 Match fees for his work in playing football games for his club in the league. $20,000 Prize awarded for being best and fairest player in the league. $10,000 Appearance fees for his services in appearing on a television show. $5000 Car expenses reimbursed by an employer based on distance travelled. During the income year. he incurred the following deductible outgoings: $10,000 marriage fees Kenny’s total accessable income for the income year is: $245000 $235000 $230000 $225000 $220000 $215000 $210000 $205000 $200000