Which of the Following Statements About Taxpayer Negligence Is False

question 62

Multiple Choice

Which of the following statements about taxpayer negligence is false?

• A) A taxpayer who makes a good faith effort to comply with the tax law is not negligent.
• B) A taxpayer who keeps complete and careful tax records is less likely to incur a negligence penalty than a taxpayer with no records.
• C) A taxpayer who cooperates with the revenue agent is less likely to incur a negligence penalty than an uncooperative taxpayer.
• D) A taxpayer who relies on the advice of a tax professional has a guaranteed defense against the negligence penalty.

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Definitions:

Budgeted Amounts

Financial projections or estimates of revenue and expenses over a specified period, used for planning and control purposes.

Direct Labor Time Variance

The difference between the actual time taken to produce a good or service and the estimated time.

Standard Rate

A predetermined charge or cost that applies to a specific service, transaction, or product under typical conditions.

Standard Direct Hours

Standard direct hours represent the estimated amount of time that should be spent by labor to produce a unit of output under normal conditions.