2070. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #1
Margaurite did not pay her Federal income tax on time. When she eventually filed the return, she reported a balance due. Compute Margaurites failure to file penalty in each of the following cases.
a.
Two months late, $500 additional tax due.
b.
Three months late, $2,000 additional tax due.
c.
Ten months late, $10,000 additional tax due.
d.
Three months late due to fraud by Margaurite, $10,000 additional tax due.
e.
Fifteen months late due to fraud by Margaurite, $10,000 additional tax due.
2071. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #2
Isaiah filed his Federal income tax return on time, but he did not remit the full balance due. Compute Isaiahs failure to pay penalty in each of the following cases. The IRS has not yet issued a deficiency notice.
a.
Two months late, $5,000 additional tax due.
b.
Ten months late, $5,000 additional tax due.
c.
Five years late, $5,000 additional tax due.
2072. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #3
Compute the failure to pay and failure to file penalties for John, who filed his 2010 income tax return on December 14, 2011, paying the $10,000 amount due. On April 1, 2011, John submitted a six-month extension of time in which to file his return; he paid no tax with the extension request. He has no reasonable cause for failing to file his return by October 15 or for failing to pay the tax that was due on April 15, 2011. Johns failure to comply with the tax laws was not fraudulent.
.
2073. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #4
Marco, a cash basis, calendar year taxpayer, filed his income tax return 50 days after the due date. Marco never extended his return, and with the return he paid the taxes that were due. What penalties will Marco incur, and how much is the penalty if his additional tax is $5,000? Disregard any additional interest he must pay.
2074. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #5
Bettie, a calendar year individual taxpayer, files her 2009 return on February 10, 2011. She had obtained a six-month extension for filing her return. There was additional income tax of $20,000 due with the return.
a.
What are Betties penalties for failure to file and to pay?
b.
Would your answer to a. change if Bettie, before the due date of the return, had retained a CPA to prepare the return and it was the CPAs negligence that caused the delay?
2075. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #6
Clara underpaid her taxes by $50,000. Of this amount, $15,000 was due to negligence on her part, as her record-keeping system is highly inadequate. Determine the amount of any negligence penalty
.
2076. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #7
Leo underpaid his taxes by $250,000. Portions of the underpayment were attributable to negligence ($90,000) and to civil fraud ($160,000). Compute the total penalties incurred.
2077. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #8
Compute the overvaluation penalty for each of the following independent cases involving the taxpayers reporting of the fair market value of charitable contribution property. In each case, assume a marginal income tax rate of 35%.
Taxpayer
Corrected IRS Value
Reported Value
a.
Individual
$ 10,000
$ 20,000
b.
C corporation
10,000
30,000
c.
S corporation
10,000
30,000
d.
Individual
100,000
175,000
e.
Individual
100,000
250,000
f.
C corporation
100,000
500,000
2078. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #9
Compute the undervaluation penalty for each of the following independent cases involving the executors reporting of the value of a closely held business in the decedents gross estate. In each case, assume a marginal estate tax rate of 45%.
Reported Value
Corrected IRS Value
a.
$10,000
$ 20,000
b.
60,000
100,000
c.
80,000
150,000
d.
50,000
300,000
2079. CHAPTER 17TAX PRACTICE AND ETHICS Question PR #10
Arnold made a charitable contribution of property that he valued at $70,000. He deducted this amount as an itemized deduction on his tax return. The IRS can show that the actual value of the property is $50,000. Arnold is in the 35% income tax bracket. Determine Arnolds amount due for both tax and any penalty.