When a Taxpayer Shows That Failure to File a Tax

question 47

Multiple Choice

When a taxpayer shows that failure to file a tax return or to pay a tax is due to reasonable cause, no penalty is assessed.While the concept of reasonable cause is not clearly defined by the IRS, it is probable that the IRS and the courts would not allow which one of the following situations?

• A)Serious illness of the taxpayer
• B)Death of the taxpayer
• C)Natural disaster
• D)Reliance on an accountant to file the return
• E)Unavoidable destruction of the taxpayer's records

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Definitions:

Time-inconsistency

A situation where a decision-maker's preferences change over time, leading to a plan or policy that is not followed through as initially intended.

Money Supply

Money supply refers to the total amount of money in circulation within an economy, including cash, coins, and balances held in checking and savings accounts, which can influence inflation, interest rates, and economic growth.

Money Expansion

An increase in the total supply of money in an economy, often by central banking actions.

Rapid Growth

A phase of economic expansion characterized by a significant increase in the GDP, income, and employment.