Intwermidiate Quiz 1 Essay

Intwermidiate Quiz 1 Essay Intwermidiate Quiz 1 Essay Jessica Schwan Federal Income Tax #42 A)Andy could be subject to an audit if the misstated amount accounts for 25 percent or more of the gross income stated. The IRS has 6 years in this case to call an audit. My advice for Andy would be to calculate how much off gross income was stated. If it is less than 25 percent then he is fine. He should however be much more careful and honest in future tax returns. B)My advice would change if I were the preparer. I would want tax returns that I am responsible for to be as accurate as possible. If a material mater was exposed to me, I would file a correction right away. C)I would only consider preparing Andy’s current tax return if all information was present. I would not purposely misstate gross income. I could not morally or legally do so. #51 A)The Child Tax Credit would justify care for a minor while a parent works. B)This act is discourage and therefore not supported with a tax credit. C)The justification for this is that it minimizes the effect of a loss in a current year, and allows you to spread the effects from it to more profitable years, known as a carryback. D)This allows a taxpayer to spread tax consequences over the payout period. The harsh effect of taxing all of the gain in the year of sale is thereby avoided. E)These amounts change year to year, as the current cost of living increases per year caused by inflation. F) With tax-exempt bonds, the federal government gives up more in tax revenues than