On the Receipt of a Refund Check for Overpayment of Taxes

question 36

Multiple Choice

On the receipt of a refund check for overpayment of taxes, a taxpayer may assume

• A)His or her return is not likely to be audited.
• B)His or her return is likely to be audited.
• C)His or her return definitely will be audited.
• D)His or her return definitely will not be audited.
• E)Nothing

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing profit or gains from trade.

Tax

A mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures.

Mutually-Agreeable Trade

A transaction or trade that both parties involved consent to and believe will benefit them.

Opportunity Cost

The expense incurred by not selecting the second-best option when deciding among various choices.