Steve Files His Return on April 1 and Pays the Entire

question 13

Multiple Choice

Steve files his return on April 1 and pays the entire amount of tax for the year at that time, $5,000. He is audited and pays the deficiency of $1,500 two years later. The maximum amount Steve may file a claim for refund for eighteen months later is

• A)$6,500.
• B)$5,000.
• C)$1,500.
• D)some other amount.

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Definitions:

Budget Surpluses

Occurs when a government, company, or individual receives more income than it spends over a specified period, leading to excess funds.

Government Spending

The total amount of money spent by the government on various services, including healthcare, education, and defense.

Conventional Monetary Policy

Central bank actions involving the manipulation of interest rates and control of the money supply to influence economic activity.

Interest Rates

The cost of borrowing money or the return on investment, expressed as a percentage, indicative of the price of credit in the economy.