Mr. Stanhope has an MBA degree from Stanford University and has successfully operated a business for 18 years. The revenue agentwho audited Mr. Stanhope's Form 1040 discovered a glaring error resulting in a $17,500 underpayment of tax. When questioned by therevenue agent about the error, Mr. Stanhope just shrugged and offered no logical explanation.Required:a. If the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence.b. Is Mr. Stanhope's level of education and business experience likely to be a factor considered by the revenue agent in determiningnegligence?Complete this question by entering your answers in the tabs below.Required A Required BIf the error resulted from Mr. Stanhope's blatant disregard of a tax rule, compute the penalty for negligence.Accuracy-related penalty

Taxation is the process of collecting taxes from citizens for the use of services provided by the…

Answered: Mr. Stanhope has an MBA degree from…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law

Section: Chapter Questions

Problem 41DQ

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Similar questions

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.
A revenue agent determined that Ms. Osaka underpaid income tax by $48,100 and concluded that $9,200 was caused by inadequate record keeping while the remainder was caused by an understandable misapplication of a complex rule of law. Required: Compute the negligence penalty that the revenue agent can impose on Ms. Osaka. Accuracy-related penalty
Ned Naïve operated several franchise stores for a large company, and, at the home office’s suggestion, consolidated its payroll and accounting functions with Andy the Accountant. Andy is not a CPA. Last year, Andy began embezzling the taxpayer’s escrowed payroll tax withholdings and failed to remit required amounts for the four quarters. The IRS assessed penalties on Ned for failing to make the proper withholding deposits during the year. What are factual issues, legal issues and primary research questions on this case?
Give the Circular 230 position concerning each of the following situations sometimes encountered in the tax profession. Taking an aggressive pro-taxpayer position on a tax return. Not having a quality review process for a return completed by a partner of the tax firm. Purposely delaying compliance with a document request received from the IRS. Not keeping up with changes in the tax law. Charging $4,500 to complete a simple Form 1040 with no supporting schedules. When representing a taxpayer in a Federal income tax audit, charging a fee equal to one-third of the reduction of the tax proposed by the IRS agent. Representing both the husband and wife when negotiating tax matters pertinent to their divorce. Advertising on the Web for new tax clients and including Se habla español in the text of the ads.
Ms. Zakiya is appointed as auditor by “Muscat Bakery LLC”. She was responsible to provide factual audit report to the owner of “Muscat Bakery LLC.” During her audit work she realised that few client staff are not cooperating to provide important business operational data. Mr. Ahemed offer some costly gift to Ms. Zakiya to faver the audit report. She was not aware of tax policy which Muscat Bakery was following also wants to know the new accounting policies of Muscat Bakery LLC.You have to explain the required qualities by Ms. Zakiya to give her fare and quality audit report.
Drag and drop the best response into the blank box. Shelley Bowman, CPA, obtained her designation in 2000. Since that time, she has built up a significant tax practice. In late 2021, a new client approached Shelley and asked her to perform an audit engagement. Believing this could lead to a substantial amount of tax work in the future, Shelley agreed, even though she had never completed an audit, nor taken any assurance courses since 1980. Violation of Competence No violation of the Rules of Professional Conduct Violation of Independence - self-interest Violation of the Charter of Conduct Violation of Independence - familiarity Violation of Independence - self review
A tax return client was audited for a prior year return and assessed a tax deficiency because a material deduction was disallowed. Nevertheless, the client insists on taking the very same kind of deduction on this year’s return... (a) A CPA absolutely may not prepare or sign the client’s return for this year un-less it conforms to the audit result for the prior year. (b) A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA determines as a matter of in-dependent professional judgment that the deduction is proper. (c) A CPA may prepare and sign the client’s return for this year claiming a de-duction that previously was disallowed if the CPA receives a formal tax opinion from a law firm or from an unaffiliated CPA affirming that it is more likely than not that the deduction would be sustained on its merits if litigated.
Mrs. Smith, the legal wife of Mr. Smith who is the city treasurer of Baguio, provided an information to the Bureau of internal revenue unpaid taxes leading to the recovery of P9,500,000. REQUIRED: 1. How much is the net amount to be received by the informant after deduction of final taxes?
As a tax consultant you receive on continuous basis inquiries and tax forms from your clients. Following are independent inquires that you have to check and reply back to your clients. For each enquiry below and listed 1 to 4, comment on whether the given calculations are correct or not, explain your answer and give the correct calculations by showing your workings if you disagree. 1. Jurisdiction A imposes income tax on businesses. The income tax is equal to 1% of income up to $ 200,000 and 1.5% of income in excess of $200,000. Nasha Company reported $1,564,000 net income for the year ended December 2020. Nasha's accountant reported an income tax of $23,460. 2. Taxpayer D has taxable income of $172,450. He operates in a Jurisdiction where the tax equals 10% of the first $34,000, 15% from $34,001 to $138,000 and 25% in excess of $138,000. Taxpayer D believes that his average tax rate equals his marginal tax rate of 25%. 3. Taxpayer E lives in a jurisdiction which impose 15% individual…
Mr. Ray, a Certified Public Accountant (CPA) was the auditor of a Registered Public Accounting Firm. He was the lead auditor for Bay Corporation for 2020. In early 2022 he was hired as the Chief Financial Controller of Bay Company: Mr. Ray's employment is unethical and is a contravention of the: a. The Foreign Corrupt Practice Act of 1977. O b. The Sarbanes-Oxley Act of 2002 (SOX) The Securities Act of 1933. O c. O d. The Securities Exchange Act of 1934.
The Taxpayer Advocate Service (TAS) can help taxpayers with what type of assistance? As a first step, rather than dealing with the IRS, when the taxpayer believes there are unusual circumstances involved. When the taxpayer feels the resolution applied by the IRS is unreasonable. If there is a financial difficulty, emergency, or hardship and the IRS needs to move faster than normal. When an audit results in a significant change and the deadline for appeal has passed. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
John Matthew filed a fraudulent income tax return for the year 2021 on April 11, 2022. TheBureau of Internal Revenue (BIR) discovered the fraud on February 20, 2023. The last day for theBIR to collect or to send an assessment notice is?

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