Alice Is a Plumber and Collector of Rare Stamps

question 59

Multiple Choice

Alice is a plumber and collector of rare stamps. Instead of always receiving cash payments for her work, she occasionally has her customers send their payments to a stamp broker. The broker then makes stamp purchases on Alice's behalf and mails the stamps to her. Alice never reports the value of the stamps received as income on her tax return.
I.Alice's actions are a form of tax evasion.
II.Alice's actions are subject to payment of tax, interest, and penalty if detected by the IRS.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Commercial Property

Commercial property is real estate intended for use in commerce, such as offices, stores, and factories.

Partial Rights

Limited legal entitlements that do not encompass full ownership or control.

Exculpatory Clauses

Provisions in a contract that relieve one party of liability for harm or damage, transferring the risk to another party.

Negligence Liability

Legal responsibility arising from the failure to exercise reasonable care, resulting in harm or injury to another party.