A Taxpayer's Return Is Audited and Additional Taxes Are Assessed

question 56

Multiple Choice

A taxpayer's return is audited and additional taxes are assessed. The IRS also asserts that a negligence penalty should be assessed. The taxpayer concurs with the additional $15,000 tax liability; $7,000 of this amount is attributable to negligence. What is the amount of the penalty for negligence?

• A)$700
• B)$1,400
• C)$5,600
• D)$1,750

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Definitions:

Three-Fifths Compromise

An agreement made during the 1787 Constitutional Convention stating that three-fifths of the enslaved population would be counted for determining taxation and representation in Congress.

Philadelphia Convention

The gathering in 1787 where the Constitution of the United States was framed and adopted by its original colonies.

Elastic Clause

Also known as the Necessary and Proper Clause, part of the U.S. Constitution allowing Congress to pass laws deemed necessary and proper for executing its enumerated powers.

Supremacy Clause

The Supremacy Clause is a provision in Article VI of the U.S. Constitution establishing that federal law takes precedence over state laws and constitutions when they are in conflict.