For Each of the Following Situations, Indicate the Nature and Amount

question 35

Essay

For each of the following situations, indicate the nature and amount of the penalty that could be imposed.(The penalties include both tax practitioner penalties and taxpayer penalties).​ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Description of the Penalty
a. Kyle files his tax return on the original due date and pays the
entire balance of tax due of $\$ 5,000$ . He did not $p$ ay any estimated
tax during the year and had no withholding. His pri or year tax $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ _______________
return showed a tax liability of $\$ 12,000$ (do not calculate the penalty).
b. Drew writes a check for $\$ 300$ in payment of his income taxes.
Drew knows he does not have sufficient funds in his account to $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ _______________
cover the check.
c. Enrique has a $\$ 10,000$ tax deficiency on his 2017 tax return due to
civil fraud.
d. Vladimir prepares a tax return for Oscar but does not keep a copy $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ _______________
of the tax return.
e. Friscilla, a self-employed accountant, prepares a tax return for
Billy. She signs the return but does not include her preparer tax $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ _______________
identification number on the tax return as required.
f. Manny prepares a tax return for his client who requests that
Manny disregard a current tax law which would increase his tax $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ _______________
liability by $\$ 17,000$ . Manny agrees to do so since he does not want
to lose this important client.

---

Definitions:

World Bank

An international financial institution that provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.

Borrowing Money

The act of obtaining funds from another party with the promise of repaying the principal along with potential interests.

Shareholder Value Model

A business strategy focused on increasing the returns to shareholders, often prioritizing it above other considerations.

Corporate Reinvestment

The act of a company using its profits to invest back into its own operations, projects, or assets to support growth, improve products or services, and enhance shareholder value.