Questions from General Taxation

Q: Egolf Corporation failed to include $300,000 of taxable interest

Egolf Corporation failed to include $300,000 of taxable interest income on its 2018 calendar year Form 1120. The gross income reported on the return was $4.7 million, and the return was filed on Febru...

Q: Upon audit of Ms. Evlyn Carlyle’s 2017 Form 1040, the

Upon audit of Ms. Evlyn Carlyle’s 2017 Form 1040, the revenue agent determined that she understated her tax liability by $17,000. Compute Ms. Carlyle’s penalty for substantial understatement if her co...

Q: Upon audit of Mr. Tom Staton’s 2017 Form 1040, the

Upon audit of Mr. Tom Staton’s 2017 Form 1040, the revenue agent determined that he understated his tax liability by $4,300. Compute Mr. Staton’s penalty for substantial understatement if his correct...

Q: During the audit of Mr. and Mrs. Jessel’s 2016 and

During the audit of Mr. and Mrs. Jessel’s 2016 and 2017 tax returns, the revenue agent learned that they kept two sets of books for their sole proprietorship. A comparison of the two revealed that Mr....

Q: Mr. and Mrs. Boyd Knevel use a fiscal year ending

Mr. and Mrs. Boyd Knevel use a fiscal year ending July 31 as the taxable year for filing their joint Form 1040. a. What is the last date on which the Knevels can apply for an automatic extension of ti...

Q: Mr. and Mrs. Lear filed their 2017 Form 1040 on

Mr. and Mrs. Lear filed their 2017 Form 1040 on April 1, 2018. In November 2019, they received a notice of deficiency in which the IRS assessed $19,044 of additional 2017 income tax. Compute the total...

Q: Mr. Leon filed his 2017 Form 1040 on March 29,

Mr. Leon filed his 2017 Form 1040 on March 29, 2018. In 2020, the IRS issued a notice of deficiency to Mr. Leon, in which it assessed $7,700 of additional 2017 income tax. Compute the total amount tha...

Q: Zucker Inc. uses a fiscal year as the taxable year for

Zucker Inc. uses a fiscal year as the taxable year for filing its Form 1120. a. If Zucker’s fiscal year ends on March 31, what is the filing date and the extended filing date for Zucker’s Form 1120 fo...

Q: Mr. and Mrs. Pratt failed to apply for an extension

Mr. and Mrs. Pratt failed to apply for an extension of time to file their 2018 Form 1040 and didn’t mail the return to the IRS until May 29, 2019. Assuming the Pratts had no excuse for filing a delinq...

Q: Mr. and Mrs. Wickham did not apply for an extension

Mr. and Mrs. Wickham did not apply for an extension of time to file their 2018 Form 1040. Because they were vacationing outside the United States, they neglected to file their Form 1040 until July 14,...