Determine the facts: I will have the IRS examiner run an audit report for my client showing the additional tax, penalties, and interest that he/she is proposing. Let the IRS examiner know that my client and I will get back to them after we have a chance to study the report. 2. Identify the issue (ask questions): What my clients think he/she owes, decide if my client owe statutory interest from the due date of the return, and whether the IRS examiner is proposing any penalties such as late filing or accuracy penalties?
Federal Tax Return 1 Federal Tax Return 2 Federal Tax Return We should all be familiar with filing a tax return. What is an income tax return and how is it used to by each individual taxpayer? “An income tax is a tax levied on the income of individuals or businesses (corporations or other legal entities)” cited in Fundamental of Taxation. An income tax return is the documents that are given to the tax collector regarding information about the taxpayer's tax liability. If you are a U.S. citizen or resident alien, whether you must file a federal income tax return depends on your gross income, your filing status, your age, and whether you are a dependent.
6. Explain what is a tax credit and tax deduction. While tax deductions work by lowering taxable income, tax credits are a direct reduction of the tax due. After you figure out your taxable income and subtract your deductions, you calculate your tax due. You still have a chance to reduce that amount, often significantly, by taking advantage of any allowable tax credits.
Chapter 2 (5 pts) 2. Explain the two "safe harbors" available to an Individual taxpayer to avoid a penalty for underpayment of estimated tax. Underpayment penalties occur when a taxpayer fails to prepay a safe harbor amount. The federal tax law does however; provide “safe harbors” to avoid these penalties. The first safe harbor depends on the current year’s total tax amount.
Provide some examples of differences between corporate taxable and accounting income. Discussion Topic # 2: 1. We have had some interesting discussions and references regarding avoiding double taxation. Now let's consider the following issues. Please cite the source of your information.
A US multinational company is required to report its financial results in US dollars. How does this create currency exchange risk for the company? What is the term which most accurately describes this particular risk? a. Currency risk- if unexpected changes in currency values affect the value of the firm 4.
The Board of Directors also seems to question the validity of YAG’s current financial information as the bookkeeper prepared the prior years’ financial statements on a cash basis. To set this year’s materiality we look toward CAS 320 for guidance and consider the user’s needs and risks. A large amount of YAG’s funds come primarily from government grants. One of the requirements of the government grants are an audit of YAG and certified documentation and therefore the government is considered a primary user of YAG’s audited financial statements. Materiality of NFP organizations should be based on the Total Assets figure.
H&R Block This case is a federal class action suit against H&R Block. H&R Block offers refund anticipation loans (RALS) a RAL is a short term loan that is funded either the day the client does their federal tax return or the next day this loan is given out at a substantial interest rate for someone that is entitled to a refund on their federal tax return. Block also offers refund anticipation checks (RACS) as part of their tax services. The RAC is when you don’t have the money to pay for your tax services. H&R Block will charge a convenience fee to take the tax preparation fee out of the person’s tax refund.
calculate the tax paid by the consumer and by the club. (20 marks) Answer: a. If we are only asked to find the equilibrium price and quantity (i.e. no sub-question (b)), the best way to do it is by substitution method. However, as we are also asked to do (b), we use inverse matrix to solve the system as the inverse can be used
According to the Statements on Standards for Tax Services, the CPA should A) ask the client for permission to disclose the error to the IRS. B) withdraw from the engagement. C) inform the IRS of the error, regardless of whether the client grants permission. D) correct the error in the current year's tax return. 79) Explain the difference between a closed-fact and open-fact