Chapter 1, Problem 11P

Ma1.

Question 31 of 50. Review the following scenario, then choose the appropriate response describing steps a paid tax preparer must take to demonstrate due diligence. Charlie (21) comes in to your office to have his tax return prepared. He states that he is a full-tim college student with income from a part-time job, and his parents will not claim him as a dependent. He wants to claim the American Opportunity Tax Credit (AOTC). Which of the following describes an appropriate question to ask or action to take ooo Ask him if he has ever been convicted of a misdemeanor offense or had his driver's license revoked. Inform him that he may be assessed a penalty of $545 if he fails to provide all the information required. Inform him he must provide copies of all transcripts before you can prepare his retum. Request a copy of his Form 1098-T, Tuition Statement, and inquire into when and how his education and other were paid. Mark for follow up Question 32 of 50. Tee of these pro ambing systems.…

This Worksheet is provided as a courtesy to aid your work. Use it at your own discretion.    Use the worksheets below to 1) calculate the tax that each person pays, and 2) the total tax revenue that will be collected.  Use the following formula to calculate each person’s tax liability: Person X → ($Income in this braquet x 0.15) + ($Income in this braquet x 0.30) = Tax Paid by Person X Example 1;  if person X earns $70,000/year, then → ($50,000  x 0.15) + ($20,000  x 0.30) = $7,500 + $6,000 = $13,500  Example 2;  if person X earns $10,000/year, then → ($10,000  x 0.15) + ($0  x 0.30) = $1,500 + $0 = $1,500   3. What percent of the Nation's Income does the Total Tax Revenue represent?