The penalty for a substantial understatement is triggered when ____ A. The taxpayer understates their tax...
The penalty for a substantial understatement is triggered when ____ A. The taxpayer understates their tax by the larger if $5,000 or 10% of the correct tax, B. The taxpayer shows negligence or disregard of the rules of regulations, causing an underpayment, C. The taxpayer fails to pay the tax owed by the due date, D. The taxpayer fails to file the return by the due date, including extentions, and there is a balance due.
Homework Answers
Option A correct, that is The taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax,
Penalty will be imposed when there is substantial understatement due to the specified behaviour like acting negligently while preparing and complying with rules and disregard rules or regulations and intentional substantial understatement of income tax .
Substantial understatement is the statement understates more than $5000 or 10% of tax.
so, there are reasons trigerred to penalty and substantial understatement peanlty would be levied at 20% of the underpayment.
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The penalty for a substantial understatement is triggered when ____ A. The taxpayer understates their tax...
Question 54 of 75. A taxpayer with a balance due on their return will have to...
Question 54 of 75. A taxpayer with a balance due on their return will have to pay a failure-to-pay penalty when they O Understate their tax by the larger of $5,000 or 10% of the correct tax O Show negligence or disregard of the rules or regulations, causing an underpayment. O Fail to pay the tax owed by the due date. O Fail to file the return by the original due date. Question 55 of 75. The penalty for negligence...
Which of the following is a condition that triggers the penalty for negligence or intentional disregard?...
Which of the following is a condition that triggers the penalty for negligence or intentional disregard? 1) the taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax. 2) the taxpayer shows negligence or disregard of the rules or regulations, causing an underpayment. 3)The taxpayer fails to pay the tax owed by the due date. 4)the taxpayer fails to file the return by the due date, and there is balance due.
A taxpayer with a balance due on their return will have to pay a failure-to-pay penalty...
A taxpayer with a balance due on their return will have to pay a failure-to-pay penalty when they O O O O Understate their tax by the larger of $5,000 or 10% of the correct tax. Show negligence or disregard of the rules or regulations, causing an underpayment. Fail to pay the tax owed by the due date. Fail to file the return by the original due date. Mark for follow up
Question 66 of 75. All of the following are deductible business expenses reported in Part II...
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QUESTION 11 To protect against the negligence penalty for substantial understatement of the tax liability (without...
QUESTION 11 To protect against the negligence penalty for substantial understatement of the tax liability (without disclosure), the taxpayer's position must have substantial authority. True False QUESTION 12 Adjusted gross income is total income after subtracting all deductions, True False
Self-Study Problem 12.3 Part a: Linda filed her tax return 2 months late. The tax paid...
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QUESTION 39 Individuals may receive a 6-month automatic extension to file their tax return; that is,...
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Violet's tax liability was $5,000 and withheld tax and estimated tax payments were $4,500. He had...
Violet's tax liability was $5,000 and withheld tax and estimated tax payments were $4,500. He had not applied for extension and filed his tax return 8 months after the due date. Which of the following statements is correct regarding penalty for failure to file a tax return? No penalty is applicable as the tax due is less than $1,000. A minimum penalty of $100 may be assessed. Penalty is applicable on $5,000. Penalty is applicable on $500 tax due.
Problem 17-26 (a) (LO. 6) Melinda, a cash basis, calendar year taxpayer, filed a 90-day extension for her Federal i...
Problem 17-26 (a) (LO. 6) Melinda, a cash basis, calendar year taxpayer, filed a 90-day extension for her Federal income tax return without any tax payment. She paid the taxes that were due when she filed the return 65 days after the due date. a. What penalty or penalties will Melinda incur? Melinda is liable for only the failure to pay penalty b. How much will she have to pay if her additional tax is $75,000? Disregard any interest she...
Problem 12-3 (Algorithmic) Interest and Penalties (LO 12.3) Compute the penalty described for the following taxpayers....
Problem 12-3 (Algorithmic) Interest and Penalties (LO 12.3) Compute the penalty described for the following taxpayers. If an amount is zero, enter "O". If required, round your answers to two decimal places. a. Wilson filed his individual tax return on the original due date, but failed to pay $2,220 in taxes that were due with the return. If Wilson pays the taxes exactly 11 months late, calculate the amount of his failure-to-pay penalty. b. Joan filed her individual income tax...
Question 54 of 75. A taxpayer with a balance due on their return will have to pay a failure-to-pay penalty when they O Understate their tax by the larger of $5,000 or 10% of the correct tax O Show negligence or disregard of the rules or regulations, causing an underpayment. O Fail to pay the tax owed by the due date. O Fail to file the return by the original due date. Question 55 of 75. The penalty for negligence...
A taxpayer with a balance due on their return will have to pay a failure-to-pay penalty when they O O O O Understate their tax by the larger of $5,000 or 10% of the correct tax. Show negligence or disregard of the rules or regulations, causing an underpayment. Fail to pay the tax owed by the due date. Fail to file the return by the original due date. Mark for follow up
Question 66 of 75. All of the following are deductible business expenses reported in Part II of Schedule C, Profit or Loss from Business, EXCEPT: Car and truck expenses. o Contributions to an employee's profit-sharing plan. Expenses relating to business use of the taxpayer's home. Health insurance benefits for employees. Mark for follow up Question 67 of 75. Choose the response that accurately completes the following sentence. Gross receipts, reported as income in Part 1 of Schedule C, Profit or...
QUESTION 11 To protect against the negligence penalty for substantial understatement of the tax liability (without disclosure), the taxpayer's position must have substantial authority. True False QUESTION 12 Adjusted gross income is total income after subtracting all deductions, True False
QUESTION 39 Individuals may receive a 6-month automatic extension to file their tax return; that is, no explanation is required as long as the proper form is filed by the due date. True False QUESTION 40 To avoid the taxpayer penalty for substantial understatement of the tax liability due to a disclosed position, the taxpayer's position on the retum must, at a minimum, Have a reasonable basis. Have a realistic possibility of success. Have substantial authority Not be frivolous Be...
Problem 17-26 (a) (LO. 6) Melinda, a cash basis, calendar year taxpayer, filed a 90-day extension for her Federal income tax return without any tax payment. She paid the taxes that were due when she filed the return 65 days after the due date. a. What penalty or penalties will Melinda incur? Melinda is liable for only the failure to pay penalty b. How much will she have to pay if her additional tax is $75,000? Disregard any interest she...
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