For the Following Tax Returns, Identify the Method the IRS

question 67

Essay

For the following tax returns, identify the method the IRS likely used to select the return for audit.
a. Dan made a mistake in adding his income on his tax return.
b. Juanita failed to report her salary from her second job on her tax return.
c. Michael and Venita deducted a relatively large amount of travel expenses on their tax return for their business. The travel expense is large relative to other taxpayers in similar businesses with similar levels of income.
d. Paul and Melissa recently went through a very nasty divorce. One of the issues was Paul's less than forthright accounting of his income in determining the appropriate level of alimony.

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Definitions:

Philip Tetlock

A political scientist known for his work on the accuracy of political forecasts and the psychology of judgment.

Overconfidence

Refers to the cognitive bias where an individual's subjective confidence in their judgments is reliably greater than their objective accuracy.

Economic and Military Predictions

The process of forecasting future economic trends and military capabilities or situations based on current data and trends.

Correlational Design

A type of research methodology that examines the relationship between two or more variables without manipulating them.