Chapter 2, Problem 3RP

Your qualitative answers should be written in full sentences with depth to your responses when needed. For questions and problems requiring computations, you need to share your supporting calculations. 1a. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties? 1b.  Why is income-shifting considered such a major tax planning concept?  1c.  Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia? 1d.  Compute the taxable income for 2020 under each of the following circumstances:     Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and…

1. Internet users can go to http://www.irs.gov/ and: a.Use a search function to find forms and publications. b.Find links to other useful IRS pages. c.Download tax forms and publications. d.All of these choices are correct.   2.  Electronically filed tax returns: a.Have error rates similar to paper returns. b.Offer faster refunds than paper returns. c.May not be transmitted from a taxpayer's home computer. d.Constitute less than 50 percent of the returns filed with the IRS.   3. John, age 25, is a full-time student at a state university. John lives with his unmarried sister, Ann, who provides over half of his support. His only income is $4,400 of wages from a part-time job at the college book store. What is Ann's filing status for 2021? a.Married, filing separately b.Head of household c.Qualifying widow(er) d.Single e.None of these choices are correct.