Problem
Textbook: Pearson's Federal Taxation 2019 Comprehensive, Corporations, Chapter 15
Chapter 15 covers a wide range of administrative procedures for taxation including the audit process, rules governing tax collection, types of penalties imposed by the IRS, the methods for calculating them, and standards for the tax profession. This week's quiz covers the chapter in its entirety. As you read, consider the following questions:
1) What is the procedure for estimating income taxes owed on income other than wages?
2) What is the penalty for underpayment of estimated taxes? Who is exempt from this penalty?
3) How does the IRS define negligence, and what is the penalty for negligence?
4) What is the penalty for understatement of taxes? How might taxpayers attempt to reduce or eliminate this penalty despite potential underpayment?
5) What constitutes a substantial omission for a corporate tax return? What is the statute of limitations for a substantial omission?