Yin-Li Is the Preparer of the Form 1120 for Cloves

question 52

Essay

Yin-Li is the preparer of the Form 1120 for Cloves Corporation. On the return, Cloves claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Yin-Li in each of the following independent situations.
$\begin{array}{lccc}\text {Form 8275 disclosure }&\text {Tax reduction that}&\text { Probability that the }&\text {Yin-Li's fee to}\\\text {on the return of the}&\text {resulted from the}&\text {deduction would be}&\text {complete the Cloves}\\\text {disputed deduction?}&\text {deduction (\$)}&\text {approved by the}&\text {return (\$)}\\\end{array}$

A) $\begin{array}{rccc}& \text { No } &&&&&&&&& 40,000 &&&&&&&& 75 &&&&&&& 10,000 \\\end{array}$
B) $\begin{array}{rccc}& \text { No } &&&&&&&&& 50,000 &&&&&&&& 30 &&&&&&& 500 \\\end{array}$
C) $\begin{array}{rccc}&\text { No } &&&&&&&&& 60,000 &&&&&&&& 40 &&&&&&& 3,000 \\\end{array}$
D) $\begin{array}{rccc}&\text { Yes } &&&&&&&&& 70,000 &&&&&&&& 30 &&&&&&& 6,000 \\\end{array}$
E) $\begin{array}{rccc}&\text { Yes } &&&&&&&&& 80,000 &&&&&&&& 20 & &&&&&&6,000\end{array}$

• A)\(\begin{array}{rccc}& \text { No } &&&&&&&&& 40,000 &&&&&&&& 75 &&&&&&& 10,000 \\\end{array}\)
• B)\(\begin{array}{rccc}& \text { No } &&&&&&&&& 50,000 &&&&&&&& 30 &&&&&&& 500 \\\end{array}\)
• C)\(\begin{array}{rccc}&\text { No } &&&&&&&&& 60,000 &&&&&&&& 40 &&&&&&& 3,000 \\\end{array}\)
• D)\(\begin{array}{rccc}&\text { Yes } &&&&&&&&& 70,000 &&&&&&&& 30 &&&&&&& 6,000 \\\end{array}\)
• E)\(\begin{array}{rccc}&\text { Yes } &&&&&&&&& 80,000 &&&&&&&& 20 & &&&&&&6,000
• \end{array}\)

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Definitions:

R

A symbol commonly used to represent resistance in electrical circuits.

RC Parallel Circuit

A circuit configuration consisting of a resistor (R) and a capacitor (C) connected in parallel, which influences the charging and discharging time constants.

R

Symbol commonly representing resistance in electrical equations, measured in ohms (Ω).

RC Parallel Circuit

An electrical circuit that consists of resistors (R) and capacitors (C) connected alongside each other in parallel, allowing for AC filtering or timed circuits.