The revenue agent who audited Ms. Hsui's Form 1040 discovered a $15,250 deduction that wasn't allowed by the tax law. The mproper deduction reduced Ms. Hsui's tax by $5,033. The total tax deficiency for the year under audit was $6,490. Required: . Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in preparing the tax return. . 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.
The revenue agent who audited Ms. Hsui's Form 1040 discovered a $15,250 deduction that wasn't allowed by the tax law. The mproper deduction reduced Ms. Hsui's tax by $5,033. The total tax deficiency for the year under audit was $6,490. Required: . Compute the maximum penalty if the agent concludes that the improper deduction was due to Ms. Hsui's negligence in preparing the tax return. . 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.
Chapter12: Tax Administration And Tax Planning
Section: Chapter Questions
Problem 7P
Related questions
Question
![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.
< Required A
Required B
>](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fac12f320-6eb2-456d-a364-e8b20b49927e%2F73a4255a-1148-4744-a6d2-1c73be66c752%2F5732z4p_processed.png&w=3840&q=75)
Transcribed Image Text: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.
< Required A
Required B
>
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