Which of the Following Is More Likely to Receive IRS

question 11

Multiple Choice

Which of the following is more likely to receive IRS scrutiny under the assignment of income doctrine?

• A)A corporation paying its shareholders a $20,000 dividend.
• B)A parent employing her child in the family business.
• C)A taxpayer gifting stock to his children.
• D)A cash-basis business delaying billing its customers until after year-end.
• E)None of the choices are correct.

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Definitions:

Imported Raw Materials

Raw or unprocessed goods brought into a country from abroad for use in manufacturing or production.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a given year, expressed in base-year prices.

Nominal GDP

GDP based on prices prevailing at the time of production.

Price Level

A measure of the average prices of goods and services in an economy at a specific point in time.