The Revenue Agent Who Audited Mr

question 57

Multiple Choice

The revenue agent who audited Mr.Silver's 2017 Form 1040 concluded that Mr.Silver deliberately disregarded the tax rules about charitable contributions.Consequently,the agent disallowed $19,320 of Mr.Silver's contribution deduction.Mr.Silver also miscalculated his AMT in spite of his good faith effort to make the difficult calculation.Because of these two errors,the agent assessed a tax deficiency for 2017.Which of the following statements is false?

• A)The agent has the authority to impose a negligence penalty in addition to the deficiency.
• B)The agent could impose a negligence penalty on the entire deficiency.
• C)The agent could impose a negligence penalty on the portion of the deficiency attributable to the disallowed contribution deduction.
• D)If the agent imposes a negligence penalty,Mr.Silver has the right to appeal the penalty.

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Definitions:

Interest Rate

The ratio at which interest is applied to money loaned by a borrower from a lending party.

Compounded Semi-annually

A financial term indicating the interest on an investment is calculated and added to the principal balance twice every year, enhancing the total return over periods.

Obligation

A duty or commitment to pay money or perform some action.

Equivalent

Equal in value, amount, function, meaning, or status; often used in mathematics to describe expressions or amounts that are the same when compared or evaluated.