For the Following Tax Returns, Identify Which of the Three

question 53

Essay

For the following tax returns, identify which of the three audit types will most likely be utilized.
a. The IRS selected Don's return for audit because of his high itemized deductions. The IRS would like documentation of these deductions.
b. Large Public Corporation is a very large publicly traded corporation. It is involved in many complex transactions that have significant tax ramifications.
c. George and Barbara operate a small business out of their home. The IRS has identified a couple of issues that may relate to their business.
d. The IRS selected Bill and Hillary's tax return for review because of some of their investment sales. They would like a better understanding of the transactions and parties involved.

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Definitions:

Negative Balance

A situation in financial accounts where the amount spent exceeds the amount available or deposited.

Euro

The common currency in most of Western Europe.

Dollar

The official currency of the United States, also used as a standard monetary unit in many other countries.

Net Exports

One country’s exports to other countries minus its imports from other countries.