Question

Required information The following information applies to the questions displayed below.] Jasper and Crewella Dahvill were married in year 0. They filed joint tax returns in years 1 and 2. In year 3, their relationship was strained and Jasper insisted on filing a separate tax return. In year 4, the couple divorced. Both Jasper and Crewella filed single tax returns in year 4. In year 5, the IRS audited the couple's joint year 2 tax return and each spouse's separate year 3 tax returns. The IRS determined that the year 2 joint return and Crewella's separate year 3 tax return understated Crewella's self-employment income, causing the joint return year 2 tax liability to be understated by $12,700 and Crewella's year 3 separate return tax liability to be understated by $7,350. The IRS also assessed penalties and interest on both of these tax returns. Try as it might, the IRS has not been able to locate Crewella, but they have been able to find Jasper. a. What amount of tax can the IRS require Jasper to pay for the Dahvill's year 2 joint return? Amount of tax

Answer 1

) In the Year 2, Both Jasper and Dahvill filed tax return as married tax payers. Hence, they are liable for taxes and other liabilities jointly and severally. There is understatement of Dahvill income by $12,700

The maximum tax, interest and penalties IRS may levy on Dahvill's understatement equates to the amount of understated income.

Hence, the amount of tax Jasper can be required by IRS to pay for Dahvill's Year 2 Joint tax return is

$12,700.

The answer is $12,700