Explanation The explanation for correct answer : As per past experiences, it is found in many cases that taxpayers have been maltreated by the IRS therefore later in 1988, the government introduced a new provision related to taxpayers' bill of rights to facilitate the taxpayers to curb these issues. These new provisions require the IRS to tell the rights of the taxpayer. Also, a provision related to innocent spouse relief was introduced to give remedy to the spouse to be relieved of the tax burden on request made to IRS in Form 8857. In case the spouse is found innocent to the case he or she will be exempt to pay taxes partially or wholly. Therefore, the option ‘d’ is correct. The explanation for incorrect answers : For option a: As per tax laws, when return filed jointly and after audit return was found forged or window dressed then in such cases the IRS can recover the number of dues from both the party jointly or separately. Also, a provision related to innocent spouse relief was introduced to give remedy to the spouse to be relieved of the tax burden on request made to IRS in Form 8857. If proved by the spouse that he or she is innocent then in such cases the spouse in joint return will be granted exemption from tax liability. Therefore, the option ‘a’ is incorrect...

38th Edition

ISBN: 9780357391129

Author: WHITTENBURG

Publisher: Cengage

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A tax is the amount of money paid to the government on the revenue earned by the individual or business organization. It acts as an income for the government and an expense for the individual or business organization. There are different regulations rega…

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Chapter 12, Problem 16MCQ

To determine

Introduction: The Internal Revenue Service (IRS) has a wide range of functions and responsibilities such as look after of administration of federal taxes, and to perform duties like estimating, determining, and collecting taxes in the form of revenue to the government, it also performs tax return audits and imposes penal provisions. It is the office within the revenue department. The task of the department is to provide the taxpayers with quality service by assisting them in proving knowledge content so the taxpayers understand their tax responsibility and pay taxes timely. It is important in maintaining and establishing tax laws.

To choose: For paying taxes in joint return both are responsible except which option.

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Solution Summary: The author explains that the Internal Revenue Service (IRS) has a wide range of functions and responsibilities, such as estimating, determining, and collecting taxes in the form of revenue to the government.

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