Failing to report income erroneously considered not

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Unformatted text preview: g false records and reporting fictitious transactions to minimize corporate tax liability. CPA-02064 Explanation Choice "d" is correct. Imposition of the civil fraud penalty requires conduct that transcends negligence or stupidity. Maintaining false records and reporting fictitious transactions is adequate to demonstrate civil fraud, a willful and deliberate attempt to evade taxes. Choice "a" is incorrect. Negligence such as omitting income as a result of inadequate recordkeeping will support a penalty, but not the civil fraud penalty. Choice "b" is incorrect. Failing to report income erroneously considered not to be part of corporate profits will support a penalty, but not the civil fraud penalty. Choice "c" is incorrect. Filing an incomplete tax return will support a penalty, but not the civil fraud penalty. 11 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions L...
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