Which of the Following Taxpayers Used Tax Evasion Tactics When

question 94

Multiple Choice

Which of the following taxpayers used tax evasion tactics when filing their 2014 tax return? I. Fern, a cash basis accountant intentionally billed clients for services on December 31, 2014, to avoid receiving cash payments from clients until 2015. II. Samual made a mathematical mistake on a schedule in his tax return that resulted in a $2,000 underpayment of tax. The IRS does not detect the mistake.. III. Beverly accidentally underreported $800 of income she earned providing childcare in her home. IV. Bo, a cattle rancher, deducted the cost of raising 7 steers that were used by his family and relatives for food during 2014.

• A) Statements I and III are correct.
• B) Only statement II is correct.
• C) Statements II and III are correct.
• D) Statemenst III and IV are correct.
• E) Only statement IV is correct.

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Definitions:

Selling Price

The actual price at which a product or service is sold to customers.

Labor Cost

The total amount of financial compensation, benefits, and taxes companies must pay for their employees' work.

Raising Prices

The act of increasing the cost at which goods or services are sold to consumers or other businesses.

Strategies

Plans of action designed to achieve a long-term or overall aim.