Ms. Barth is a professional tax return preparer. Three years ago, she prepared the Form 1120 for Denver Inc. Her fee for the preparation was $14,850. Upon audit of the return, the IRS disallowed a $112,000 deduction, which increased the corporation's tax liability by $39,200. a. Compute Ms. Barth's preparer penalty if the IRS concludes that Ms. Barth had no reasonable legal basis for claiming the deduction and was not acting in good faith by doing so. b. Compute Ms. Barth's preparer penalty if the IRS concludes that Ms. Barth intentionally disregarded the tax law by claiming the deduction in a willful attempt to understate Denver's tax. c. Compute Ms. Barth's preparer penalty if the IRS concludes that what would your answers to (a) and (b) be if Ms. Barth's preparation fee was only $3,500?

Ms. Barth is a professional tax return preparer. Three years ago, she prepared the Form 1120 for Denver Inc. Her fee for the preparation was $14,850. Upon audit of the return, the IRS disallowed a $112,000 deduction, which increased the corporation's tax liability by $39,200. a. Compute Ms. Barth's preparer penalty if the IRS concludes that Ms. Barth had no reasonable legal basis for claiming the deduction and was not acting in good faith by doing so. b. Compute Ms. Barth's preparer penalty if the IRS concludes that Ms. Barth intentionally disregarded the tax law by claiming the deduction in a willful attempt to understate Denver's tax. c. Compute Ms. Barth's preparer penalty if the IRS concludes that what would your answers to (a) and (b) be if Ms. Barth's preparation fee was only $3,500?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter1: An Introduction To Taxation And Understanding The Federal Tax Law

Section: Chapter Questions

Problem 41DQ

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