a.
Introduction: The Internal Revenue Service (IRS) has a wide range of functions and responsibilities such as look after of administration of federal taxes, and to perform duties like estimating, determining, and collecting taxes in the form of revenue to the government. It also performs tax return audits and imposes penal provisions. It is the office within the revenue department. The task of the department is to provide the taxpayers with quality service by assisting them in proving knowledge content so the taxpayers understand their tax responsibility and pay taxes timely. It is important in maintaining and establishing tax laws.
The amount of L’s accuracy-related penalty.
b.
Introduction: The Internal Revenue Service (IRS) has a wide range of functions and responsibilities such as look after of administration of federal taxes, and to perform duties like estimating, determining, and collecting taxes in the form of revenue to the government. It also performs tax return audits and imposes penal provisions. It is the office within the revenue department. The task of the department is to provide the taxpayers with quality service by assisting them in proving knowledge content so the taxpayers understand their tax responsibility and pay taxes timely. It is important in maintaining and establishing tax laws.
The amount of L’s fraud penalty.
Want to see the full answer?
Check out a sample textbook solutionChapter 12 Solutions
Income Tax Fundamentals 2020
- Alexi files her tax return 29 days after the due date. Along with the return, she remits a check for $9,500, which is the balance of the tax she owes. The failure to file is not 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: $fill in the blank 1.Failure to file penalty: $fill in the blank 2.arrow_forwardFor 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.arrow_forwardKyle 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 yearsarrow_forward
- Craig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be? Please show all calculations to demonstrate how you arrived at your answer. In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website.arrow_forwardLO.6 Blair underpaid her taxes by $250,000. A portion of the underpayment was shown to be attributable to Blair'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 on available cash is 7%. Construct a Microsoft Excel formula that generates the present value of Blair's penalty obligations.arrow_forwardplease help me resolve correctlyarrow_forward
- Last year, lana purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected. a.$7,000 gain b.$3,000 loss c.$13,000 loss d.$2,000 gainarrow_forwardTax Drill - Negligence Penalty Harrod underpaid her taxes for 2020 in the amount of $17,000, of which $9,500 is attributable to negligence. Harrod's negligence penalty is $fill in the blank 1. Assume the $9,500 is attributable to civil fraud instead of negligence. Harrod's fraud penalty is $fill in the blank 2arrow_forward. Jack filed his tax return 8 months and 27 days late and did not request an extension of time for filing. Jack's return indicated that he is to receive a $9,695 refund in taxes. Calculate the amount of Jack's penalty for failure to file his tax return on time, assuming the failure-to-file was not fraudulent.$arrow_forward
- Godoarrow_forwardAndrea's 2020 return was audited by the IRS. Andrea failed to report taxable interest income on her return, which resulted in an assessment of $8,000 in tax. Assuming her actions were intentional and fraudulent, what is her accuracy penalty?arrow_forwardThis year William provided $4,200 of services to a large client on credit. Unfortunately, this client has recently encountered financial difficulties and has been unable to pay William for the services. Moreover, William does not expect to collect for his services. William has "written off " the account and would like to claim a deduction for tax purposes. (Leave no answers blank. Enter zero if applicable.) %3D b. What amount of deduction for bad debt expense can William claim this year if he uses the cash method? Deductible amountarrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT