Quon Filed an Amended Return Claiming a $100,000 Refund

question 148

Short Answer

Quon filed an amended return claiming a $100,000 refund. The IRS disallowed the refund, and it can assess a penalty in the amount of % of the disallowed amount if there was no reasonable basis of support for the refund claim.

---

Definitions:

Profitability Index

A calculation that determines the relationship between the costs and benefits of a proposed project through a ratio derived from present value of future cash flows divided by initial investment.

Net Present Value

An analysis that assesses the worth of a project or investment by comparing all incoming and outgoing cash flows against a discount rate.

Internal Rate Of Return

A metric used in capital budgeting to estimate the profitability of potential investments.

Payback Method

A capital budgeting method that calculates the time needed to recoup the initial investment from the cash inflows.