Alice Is a Plumber and Collector of Rare Stamps

question 59

Multiple Choice

Alice is a plumber and collector of rare stamps. Instead of always receiving cash payments for her work, she occasionally has her customers send their payments to a stamp broker. The broker then makes stamp purchases on Alice's behalf and mails the stamps to her. Alice never reports the value of the stamps received as income on her tax return.
I.Alice's actions are a form of tax evasion.
II.Alice's actions are subject to payment of tax, interest, and penalty if detected by the IRS.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Recognition

The ability to identify a previously encountered stimulus.

Peg-word System

A mnemonic device that associates numbers with items that rhyme with or resemble the numbers to aid in memory.

Visual Encoding

The process by which visual sensory information is encoded for memory and later retrieval.

Automatic Processing

A cognitive process that requires little effort or conscious attention, typically allowing the mind to perform tasks without actively thinking about them.