Jayne and Jon Jointly File a Tax Return This Year

question 22

Essay

Jayne and Jon jointly file a tax return this year. Jayne fraudulently reports two expenses on Schedule C: $2,000 and $2,500. The IRS audits the return, assesses a $1,050 deficiency, and begins collection efforts two years after the timely filing by Jayne and Jon. What must Jon do to be relieved of the $1,050 tax liability?

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Definitions:

Stock Index Futures

Financial contracts that obligate the buyer to purchase, and the seller to sell, a specific stock index at a predetermined future date and price.

Multiplier

An economic factor that quantifies the impact of a change in one economic variable on another.

Euros

The official currency of the eurozone, which is used by 19 of the 27 European Union countries, known as the euro area.

Foreign Exchange Futures

Financial contracts to buy or sell a specified amount of currency at a predetermined price on a set future date, used for hedging or speculating on currency movements.