The Usual Three-Year Statute of Limitations on Additional Tax Assessments

question 26

Multiple Choice

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s) .

• A)No return at all is filed.
• B)An investment in a marketable security is worthless.
• C)Taxpayer discovers an inadvertent overstatement of deductions equal to 5% of gross income.
• D)Taxpayer inadvertently omits an amount of gross income in excess of 25% of the gross income stated on the return.

---

Definitions:

Wage Rate

The compensation paid to employees for their labor per time unit, often quantified on an hourly or annual basis.

Quantity of Labor Demanded

The total amount of hours worked that employers are willing to hire at a given wage rate.

Demand for Labor

The employers' need for workers, which varies based on factors like economic conditions, wages, and the skill level required for the jobs.

Wage Rate

The amount of compensation paid per unit of time or piece of work for employed services.