What is the applicable statue of limitations in each of the following independent situations? a. Not...

What is the applicable statue of limitations in each of the following independent situations?

a. Not return was filed by the taxpayer.

b. A corporation is determined to have been a personal holding company for the year in question.

c. for 2011, the XYZ associates filed Form 1065 (a partnership return). In 2016, the IRS determined that the organization was not a partnership in 2016 but a corporation.

d. in 2011, T incurred a bad-debt loss that she failed to claim.

e. on his 1996 return a taxpayer inadvertently committed a lard amount of gross income.

F. Assume the same situation as that in situation e, except that the omission was deliberate.

g. For 1996, a taxpayer innocently overstated her deductions by a large amount.

Solutions

Expert Solution

A. If taxpayer did not filled tax return then the IRS may assess penalties to taxpayers for both failing to file a tax return and for failing to pay taxes they owe by the deadline. The penalty is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is unfilled.

B. If a corporation is determined to have been a personal holding company for the year in question then provisions of personal holding company will be applied on it after taking care of all necessary legal formalities and actions.

C. If for 2011, the XYZ associates filed Form 1065 (a partnership return). In 2016, the IRS determined that the organization was not a partnership in 2016 but a corporation. Then in that situation IRS will penalize the corporation with retrospective effect and a correct return should be filled again.

D. T can claim the bad debts loss that she failed to claim in 2011 by presenting valid/proving documents to IRS.

E. Taxpayer can rectify his mistake in current year and should pay a penalty for the mistake.

F. If it is proven that the omission by taxpayer was deliberate then the tax payer is liable to penalty and will face legal prosecution.

G. Taxpayer can rectify her mistake in current year by adjusting that overstated deduction in current years return. Penalty may be charged here.A

ekkarill92 answered 1 year ago

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