LO.6 Blair underpaid her taxes by $250,000. A portion of the underpayment was shown to be attributable toBlair's negligence ($100,000). A court found that the rest of the deficiency constituted civil fraud ($150,000).a. Compute the total fraud and negligence penalties incurred.b. Construct a Microsoft Excel formula that computes the penalties incurred in part (a).C. Blair pays the penalties four years after committing the improper acts. Her after-tax rate of return onavailable cash is 7%. Construct a Microsoft Excel formula that generates the present value of Blair'spenalty obligations.

Calculate the total amount of penalties that were incurred due to fraud and negligence.Negligence…

Answered: LO.6 Blair underpaid her taxes by…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter26: Tax Practice And Ethics

Section: Chapter Questions

Problem 25P

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Similar questions

1
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
F53.
The revenue agent who audited Ms. Hsui's Form 1040 discovered a $15,500 deduction that wasn't allowed by the tax law. The improper deduction reduced Ms. Hsui's tax by $5,053. The total tax deficiency for the year under audit was $6,510. 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. Negligence penalty s 291 Ⓡ Required A Required B >
Interest and Penalties (LO 12.3) For each of the following situations, select the nature of the penalty and amount of the penalty that could be imposed. 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 C. account. Gerald understated his tax liability by $10,000. The total amount of tax that should have been shown on his return was $70,000. Description of the Penalty Filing a frivolous tax return Bad check ✓ Accuracy-related penalty, substantial understatement Penalty Amount
4. Tax avoidance is deliberately ignoring a specific provision in the Income Tax Act. True or False 5. Ms. Burke had employment income of $52,100, a loss from her unincorporated business of $51,000 and interest income of $8,200. As the result of dispositions of capital property, she had capital gains of $22,400 and capital losses of $28.200. During the year she also paid childcare costs of $3,100 and paid spousal support to her ex-husband of $5,100. Based on the above information answer the following three (3) questions () Ms. Burke's total income under ITA 3(a) is: A: $1,100 B: $9,300 C: $52,100 D: $60,300 (6) Mrs. Burke's income under ITA 3(b) and allowable capital loss carry over are: A: nil ($0) and $5,800 B: negative $5,800 and $0 C: nil (S0) and $2.900 D: negative $2900 and $0 (ii) Ms. Burke's Net Income for Tax Purposes is: A: A loss of $4,700 B: $1,100 C:A loss of $1,800 D: S0 6. An individual was required to make instalments payments for 2020 if their net tax owing in 2020 is…
4. Tax avoidance is deliberately ignoring a specific provision in the Income Tax Act. True or False 5. Ms. Burke had employment income of $52,100, a loss from her unincorporated business of $51,000 and interest income of $8,200. As the result of dispositions of capital property, she had capital gains of $22,400 and capital losses of $28.200. During the year she also paid childcare costs of $3.100 and paid spousal support to her ex-husband of $5, 100. Based on the above information answer the following three (3) questions O Ms. Burke's total income under ITA 3(a) is: A: $1,100 C: $52,100 D: $60,300 (i) Mrs. Burke's income under ITA 3(b) and allowable capital loss carry over are: A: nil ($0) and $5.800 B: negative $5,800 and $0 C: nil ($0) and $2.900 D: negative $2900 and $0 (ii) Ms. Burke's Net Income for Tax Purposes is: A: A loss of $4,700 B: $1,100 C: A loss of $1,800 D: $0 6. An individual was required to make instalments payments for 2020 if their net tax owing in 2020 is more than…
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.
T embezzles $100,000 from his employer in Year 1. The embezzlement isdiscovered during the course of an audit in Year 2, at which time T repays the money infull.a. T realizes $100,000 of income in Year 1.b. T doesn’t realize any income in Year 1 because he had a legal obligation torepay the money at the time he took it.c. T realizes $100,000 of income when the embezzlement is discovered in Year 2,but only if he doesn’t repay it in that year.d. None of the above. While shopping at a flea market in Year 1, T bought a simple jewelry box for $20.When T got home with her new purchase, she discovered that the box had a hiddencompartment which contained an emerald ring. She then immediately had the ringappraised by an expert on emerald jewelry and learned that it was worth $5,000. T soldthe ring to her mother for $4,000 in Year 2.a. There are virtually no cases dealing with the recognition of income for noncashor non-bullion “treasure trove.”b. T would be required to recognize $4,980 of…
Subject: acounting
H2.
Dog Alexi files her tax return 56 days after the due date. Along with the return, she remits a check for $18,900, which is the balance of the tax she owes. The failure to file is not is attributable to fraud. Assume 30 days in a month. If required, round your answers to nearest whole value. Disregarding any interest liabilities, Alexi’s total penalties are as follows: Failure to pay penalty: $.Failure to file penalty: $.

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