Why did the IRS deny the political rival’s request to see the Carpenters tax return? Nancy and Jeff Carpenter received their package of tax forms from the IRS. Because theCarpenters had recently moved, Jeff went to the library to pick up the appropriate form toclaim moving expenses. They carefully completed the forms and mailed them to the IRSon April 5.Jeff Carpenter was running for a seat in his state's legislature. His political rival hoped toprove that Nancy had illegal sources of income. He called the IRS and asked to have a copyof the Carpenters' return sent to him. His request was refused.Because of unrelated circumstances and not because of Jeff's rival's request, IRS officialschecked the arithmetic on the Carpenters' forms. Their return was one of the less than onepercent that was selected for further examination.An IRS representative contacted Nancy and Jeff, asking them to meet with him and to bringverification of their moving expenses. At the meeting, the IRS representative ruled thatmany of their expenses, including the temporary storage of their furniture, were not taxdeductible. He asked the Carpenters to sign an agreement to pay the additional tax.

For a variety of reasons, tax records may be scrutinized. Returns that are most likely to demand an…

Answered: Why did the IRS deny the political…

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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Similar questions

Which of the following is a compliance tool the IRS utilizes to address the tax gap? Compliance checks. Correspondence examinations. Discovery services. Processing and investigating unsolicited amended returns.
Tax laws, being imposition of burden, shall be strictly construed against: * A person who refuses to pay the tax The taxpayer The government Either the taxpayer or the government, depending on the evidence presented
Strategic tax management
Which of the following statements NOT correct? a. If a taxpayer is not in agreement with the decision of the Tax Appeals Authority, there is no further action that the taxpayer can take. b. Where a taxpayer loss an appeal, the taxpayer is required to pay interest on the unpaid tax from the payment date statement on the Decision Notice. c. Tax planning within the confines of the tax laws is not illegal. d. Effective tax management may result in significant cost savings.
Tax preparers often have a difference of opinion with their clients as to how some transactions should be treated on a tax return. If a client of yours does not wish to report information on their tax return that you feel should be reported, how would you handle the situation? Write in at least 300 words with two scholarly sources.
Assume your client wants to include travel and entertainment expenses in their tax deductions. Explain the type of documentation needed to support your client’s claim for including travel expense as business expense.Provide a circumstance where such a claim could trigger an IRS audit. Make sure you support your argument with clear tax rules and regulations.Your client is claiming the concert tickets he purchased as a business expense.Use your understanding of the tax laws to explain a situation where your client can claim the expense deduction as a business expense and another example where your client cannot.
Distinguish between tax avoidance and tax evasion. What are the ethical responsibilities of the tax practitioner in dealing with tax avoidance? What are the ethical responsibilities of the tax practitioner in dealing with tax evasion?
Which of the following is FALSE with respect to the final tax returns of deceased taxpayers? Multiple Choice Unused net capital losses less any capital gains deductions previously claimed are deductible against any income. Non-refundable tax credits are prorated to the date of death on the final tax return. A Ríghts or Things return may be filed in addition to the final tax return. Of the tax returns available for a cleceased taxpayer, only the final tax return must be filed.
Indicate whether the following statements are "True" or "False" regarding letter rulings. a. Letter rulings have the force and effect of law and provide guidance and support for taxpayers in similar transactions. b. A letter ruling represents the current opinion of the IRS on the tax consequences of a transaction with a given set of facts. c. Letter rulings not only help promote a uniform application of the tax laws but also may reduce the potential for litigation or disputes with IRS agent
Even though transfer taxes do not affect all individuals, individuals affected by a transfer tax can experience a high tax liability. What taxes are not considered a transfer tax? Tangible personal property is taxed by state and local governments. What is an example of something that is not considered tangible personal property? What is an example of something that excise tax is not levied on?
14. If the taxpayer failed to pay the tax demanded per final assessment, the government may exercise several administrative remedies. Which of the following is not correct? Levy of real property of the taxpayer may be availed of only after distraint of personal property of taxpayer. Either distraint or levy may be pursued simultaneously once the assessment becomes final and demandable. If the tax assessed is P 100 and below, levy or distraint may not be availed of. The remedy of distraint of personal property may be repeated if necessary until the full amount due and all expenses are collected.
Failure to furnish a completed copy of a prepared tax return no later than the time such return is presented for taxpayer signature may be subject to a penalty of?

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