1. (TCO 8) Which of the following statements is false? (Points : 4) A taxpayer c

Question

1. (TCO 8) Which of the following statements is false? (Points : 4) A taxpayer can be charged a penalty for the late payment of taxes if an extension to file was granted. The interest charged on the late payment of taxes is deductible on the federal tax return. The penalty for late filing and late payment of taxes is 5% of the balance of tax due with the return for each month it is delinquent. A taxpayer who can establish a "reasonable cause" for the late filing of his or her tax return will not be charged a late filing penalty. 2. (TCO 8) Thomas did not extend or file his 2012 federal tax return until December 3, 2012. His total tax liability was $5,000; the return showed a net refund due of $75. He filed late because he was in Vegas with his old fraternity buddies. What amount of late-filing penalty will he owe for the 2012 tax year? (Points : 4) $2,500 $150 $0 $75 3. (TCO 8) Mr. and Mrs. Lee filed a complete and accurate return for 2012 on February 28, 2013. When will the statute of limitations expire for their 2012 return? (Points : 4) April 15, 2018 February 28, 2015 April 15, 2016 August 15, 2015 4. (TCO 8) Which of the following is generally considered an indication that Ken has committed tax fraud? (Points : 4) Ken made major addition errors. Ken's business records and documents were destroyed in a flood. Ken employed a CPA to prepare his tax return. Ken has not filed a tax return in five years. 5. (TCO 8) Which of the following statements concerning the innocent spouse rule is/are true? (Points : 4) The rule is used to relieve one spouse of an additional tax liability assessed upon a joint return related to an item that the other spouse correctly reported. The tax deficiency in question must be attributable to the omission of gross income or the claim of bogus deductions or credits made by the other spouse on their joint return. The innocent spouse must show that he or she did not know, and had no reason to know, that the return understated the joint federal tax liability. B and C

Explanation / Answer

1 The interest charged on the late payment of taxes is deductible on the federal tax return.
2. $150
3.February 28, 2015
4. Ken's business records and documents were destroyed in a flood
5. The innocent spouse must show that he or she did not know, and had no reason to know, that the return understated the joint federal tax liability

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