Which of the Following Should Increase the Likelihood That Mr

question 39

Multiple Choice

Which of the following should increase the likelihood that Mr. and Mrs. McNut's Form 1040 will be selected for audit by the IRS?

• A) Mrs. McNut is an employee of the federal government.
• B) The McNuts claimed two additional standard deductions because they are both over age 65.
• C) The McNuts excluded $7,705 interest earned on a City of Pittsburg municipal bond from their gross income.
• D) The McNuts reported a $22,600 nonbusiness bad debt for a loan to their grandchild as a capital loss on Schedule D.

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Definitions:

Outside Order Takers

Outside order takers are sales personnel who visit customers or potential clients in their place of business or residence to take orders directly.

Replenish Inventory

The process of restocking products or materials in a business to ensure an adequate supply for ongoing operations or customer demand.

Resellers

Businesses or individuals that purchase goods for the purpose of selling them again rather than consuming or using them.

Inside Order Takers

Inside order takers are sales personnel who receive and process orders from customers, primarily within the company premises, without actively engaging in outside sales activities.