{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 9 - Chapter 9 Penalties and Interest 1Answer(A The...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 9 Penalties and Interest 1Answer: (A) The delinquency penalty is generally assessed by the Service Center at the time the return is processed. (B) If the correct tax is shown on the original return, even if the return is delinquent, the substantial understatement penalty is not applicable. See Code Sec. 6664(a). 2. Answer: Because Paula did not specifically inquire as to the adequacy of the client’s records to satisfy the Code Sec. 274 substantiation requirement, the penalty under Code Sec. 6694(a) could be imposed. Even though Paula had told the client about keeping adequate records at the inception of the corporation, she failed to ask about them at the time the return was actually prepared. See Notice 90-20, 1990-1 CB 328, 331; Reg. § 6694-1(e). Negligent behavior that would have been subject to the penalty under former Code Sec. 6694(e) will continue to be subject to the penalty as amended under current Code Sec. 6694(a). 3. Answer: In the first situation, where the IRA deduction eliminates the understatement, the penalty will be abated. See Code Sec. 6694(d). In the second situation, the penalty will not be abated even
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern