During a Recent IRS Audit, the Revenue Agent Decided That

question 8

Multiple Choice

During a recent IRS audit, the revenue agent decided that Roger used his closely-held corporation, Dodger Inc., to avoid shareholder tax by accumulating earnings beyond the reasonable needs of the business. Dodger's taxable income for the year was $500,000, and it paid no dividends. Compute Dodger's accumulated earnings tax, assuming that it had accumulated $2 million after-tax income in prior years.

• A) $75,000
• B) $375,000
• C) $37,500
• D) $0

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Definitions:

Clinical Psychologists

Clinical psychologists are professionals who specialize in diagnosing and treating mental, emotional, and behavioral disorders through psychological techniques and therapies.

Licensed

Officially permitted to practice or conduct a particular activity, often by having met specific qualifications or standards.

Cognitive Psychologist

A specialist in psychology who studies mental processes such as perception, memory, thought, and problem-solving.

Play Behaviour

The range of activities performed for self-amusement that are often exploratory, expressive, and imaginative, particularly in children.