Linney Corporation, Which Uses a June 30 Fiscal Year End

question 83

Multiple Choice

Linney Corporation, which uses a June 30 fiscal year end for tax purposes, requested an automatic six-month extension of time to file its return for FYE June 30, 2016. It filed the return on February 18, 2017. The revenue agent that examined the return suspects that Linney may have substantially underreported income for the year. Which of the following is false?

• A) If the underreporting of income constitutes fraud, there is no statute of limitations, and the IRS can assess additional tax at any time.
• B) If the amount of unreported income exceeds 25% of the gross income reported on the return, the IRS has until February 18, 2023, to assess additional tax.
• C) If the amount of unreported income is less than 25% of the gross income reported on the return and the return is not fraudulent, the IRS has until September 15, 2020, to assess additional tax.
• D) None of the above is false.

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Definitions:

Pancreatic Duct

A conduit through which digestive enzymes from the pancreas are transported to the small intestine.

Pancreatic Acinar Cells

The cells in the pancreas that produce digestive enzymes, which are secreted into the small intestine.

Digestive Enzymes

Proteins secreted by the digestive tract that catalyze the breakdown of food into absorbable nutrients.

Pancreatic Islets

Clusters of cells in the pancreas that produce hormones like insulin and glucagon, regulating blood glucose levels.