 What type of decisions do taxes influence?

This preview shows page 1 - 5 out of 16 pages.

Ch 1 What type of decisions do taxes influence?
Property Taxes Income Taxes Excise Taxes Implicit Taxes Ch 2 Filing Deadlines / Extended Deadlines / Payment Requirements Individuals: 15 th day of 4 th month following end of tax year C Corporations: Generally, 15 th day of the 4 th month following end of tax year Partnerships and S Corporations: 15 th day of 3 rd month following end of tax year Due dates on a Saturday, Sunday, or holiday are extended to next business day Individuals, Corporations, and Partnerships are allowed to apply for automatic extensions (6 Months) Payment Requirements? Who is required to file? Corporations: All must file regardless of taxable income Estates and Trusts: Required to file if gross income exceeds $600 Individuals: Filing is determined by taxpayer’s filing status, age, and gross income Audit Selection Process In general, a taxpayer’s return is selected for audit because the IRS believes the tax return has a high probability of being incorrect IRS uses computer programs to identify tax returns which might have an understated liability Discriminant Function (DIF) System (Scoring System) Document Perfection (Checks for math errors, etc.) Information Matching Programs (Compares tax return data with other IRS information) Types of IRS Audits Correspondence Examinations Most common audit Conducted by mail and are generally limited to 1 or 2 items on the return Office Examinations Second most common audit
Conducted in the local IRS office and tends to be broader in scope Field Examinations Least common audit Held at the taxpayer’s place of business and can last months to years Legislative Process
Requirements to Avoid Penalties

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture