If a Taxpayer Is Audited by the IRS and Is

question 99

Essay

If a taxpayer is audited by the IRS and is unwilling to accept the findings of the agent, how does the taxpayer's audit strategy change when the dispute is taken to the IRS Appeals Division? Hint: What are the "hazards of litigation?"

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Definitions:

Disbursements

Payments made by a business, often related to operational expenses or loan repayments.

Optimal Average Cash Balance

The ideal level of cash a company seeks to maintain to minimize the costs associated with holding too much or too little cash.

Weekly Interest Rate

Interest calculated and applied on a weekly basis, often referred to in terms of loans or savings.

BAT Model

Behaviorally Adjusted Time (BAT) Model refers to a calculation method designed to account for the inefficiencies human behavior introduces into the financial markets.