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ACC-317-Homework-Ch-26

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Leah Pasternak
Federal Taxation ACC317
Chapter 26: Tax Practice and Ethics
Homework Submission
11. Ian would not be required to pay any interest on his underpayment that he was negotiating a
settlement on with the IRS. As for his tax payable amount, failure to pay the tax due as shown on a
return a penalty of .5% per month (up to a maximum of 25%) is imposed on the amount of the tax. The
penalty doubles if the taxpayer fails to pay the tax after receiving a deficiency notice.
24. a. 3%
b. 3%
c. 3%
d. 2%
28. a. Olivia is liable for her failure to file penalty as well as her failure to pay the penalty.
b. Failure to pay penalty (1/2 of 1% per month × 8 months) $1,600
Plus: Failure to file penalty (5% per month × 5 months)* $10,000
Less: Failure to pay penalty for same period (1,000) 10,600
Total penalties $10,600
41. a. Luis is only entitled to receive $10,000, because the refund claim was not filed within three years
of the later of the due date or the actual filing of the return.
b. Luis is not entitled to interest on the $10,000.
c. The refund claim should have been filed by April 15, 2009, to allow a refund of the full $25,000
plus interest.
45. a. The tax adviser would not be subject to any penalties for suggesting to the client various means by
which to acquire excludible income as long as means involved legal activities.
b. The tax adviser could be charged with a criminal violation of the tax statutes for attempting to evade or
defeat the tax.
c. The tax adviser would be subject to a civil income tax preparer penalty. The adviser could be
charged with a penalty for aiding and abetting an understatement of tax liability, which is a civil penalty.
In addition, the tax adviser could also be charged with a criminal penalty.
d. Depending on the adviser’s office practices, the tax adviser could be charged with a negligence
penalty.
e. There would probably be no taxpayer penalty, but the preparer is liable to the client for any
interest and penalties the client incurs because of their failure to complete their job satisfactorily.

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Leah Pasternak Federal Taxation – ACC317 Chapter 26: Tax Practice and Ethics Homework Submission 11. Ian would not be required to pay any interest on his underpayment that he was negotiating a settlement on with the IRS. As for his tax payable amount, failure to pay the tax due as shown on a return a penalty of .5% per month (up to a maximum of 25%) is imposed on the amount of the tax. The penalty doubles if the taxpayer fails to pay the tax after receiving a deficiency notice. 24. a. 3% b. 3% c. 3% d. 2% 28. a. Olivia is liable for her failure to file penalty as ...
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