The Use of Estimates on a Tax Return Should Be

question 22

Multiple Choice

The use of estimates on a tax return should be prominently disclosed on the face of the tax return if:

• A) The estimates involved deductions for meals and entertainment
• B) The estimates involved business-related automobile usage
• C) The taxpayer was unavailable to participate in the tax return preparation process due to illness or death
• D) The estimates result in a change in a taxpayer's tax liability by "a sum equal to or greater than $1,000"

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Definitions:

Planetary Motion

The movement of planets around a star, such as the orbit of Earth and other planets around the Sun.

Proxy Variable

An auxiliary variable used in statistical analyses to represent an unobservable or difficult-to-measure variable.

Confounding Variable

A variable that influences both the dependent variable and independent variable, causing a spurious association.

Cleanliness

The state of being free from dirt, pollutants, or other unwanted substances.