Question

In: Math

Suppose the probability of an IRS audit is 2.9 percent for U.S. taxpayers who file form...

Suppose the probability of an IRS audit is 2.9 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more.

(a) What are the odds that such a taxpayer will be audited? (Round your answers to the nearest whole number.)
  
Odds that a taxpayer will be audited            to

(b) What are the odds against such a taxpayer being audited? (Round your answers to the nearest whole number.)
  
Odds against a taxpayer being audited      

Solutions

Expert Solution

Given:

Probability of an IRS audit is 2.9 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more

i.e

for every 100 taxpayers who file form 1040 and who earned $100,000 or more ; 2.9 of them are being audited.

i.e, 100-2.9 = 97.1 tax payers are not being audited.

Number of taxpayers that are being audited = 2.9

Number of taxpayers that are not being audited = 97.1

(a) the odds that such a taxpayer will be audited = Number of taxpayers that are being audited / Number of taxpayers that are not being audited = 2.9 / 97.1 = 0.029866 0

odds that such a taxpayer will be audited = 0

(b) the odds against such a taxpayer being audited = Number of taxpayers that are not being audited / Number of taxpayers that are being audited = 97.1/2.9 = 33.48276 33

Odds against a taxpayer being audited = 33
  

milcah answered 1 year ago
Next > < Previous

Related Solutions

Suppose taxpayers calling the IRS in 2017 waited 13 minutes on average for an IRS telephone assister to answer.
You may need to use the appropriate appendix table or technology to answer this question. Suppose taxpayers calling the IRS in 2017 waited 13 minutes on average for an IRS telephone assister to answer. Do callers who use the IRS help line early in the day have a shorter wait? Suppose a sample of 65 callers who placed their calls to the IRS in the first 30 minutes that the line is open during the day have a mean waiting...
Partnerships must file a tax return known as Form 1065. This notifies the IRS as to...
Partnerships must file a tax return known as Form 1065. This notifies the IRS as to the company's financial activity throughout the year. Part of Form 1065 also includes K-1s. What are K-1s? Why are they important to the partners of a partnership?
According to projections for 2016 by the Tax Policy Center, the 20 percent of U.S. taxpayers...
According to projections for 2016 by the Tax Policy Center, the 20 percent of U.S. taxpayers who make the highest incomes
Taxpayers subject to the passive loss limitation must file Form 8582-CR for what purpose? To determine...
Taxpayers subject to the passive loss limitation must file Form 8582-CR for what purpose? To determine the amount of passive activity credit (PAC) for the current year. To determine the amount of passive activity credit (PAC) for the current year, including any prior-year unallowed PAC they may claim in the current year. To correct the amount of passive loss claimed in a prior year. To correct the amount at risk determined in a prior year.
Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint...
Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2019. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at Carmel Motor Inn, and Donna is a teacher at Carmel Elementary School. They present you with W–2 forms that reflect the following information: Paul Donna Salary $68,000 $56,000 Federal tax withheld 6,770 6,630 State income tax withheld 1,400 1,100 FICA (Social Security and Medicare) withheld...
1. Marv and Delores, married taxpayers who file a joint return, sell their personal residence on...
1. Marv and Delores, married taxpayers who file a joint return, sell their personal residence on December 1st for $180,000. They lived in the house for the past 52 years. Their adjusted basis in their home was $35,000. Calculate their recognized (taxable) gain on the sale of their personal residence. 2. The following transactions were reported on a 1099-B. The taxpayer, who files as single, had taxable income of $100,000. Calculate the tax owed on the transactions. Description No. of...
1. Marv and Delores, married taxpayers who file a joint return, sell their personal residence on...
1. Marv and Delores, married taxpayers who file a joint return, sell their personal residence on December 1st for $180,000. They lived in the house for the past 52 years. Their adjusted basis in their home was $35,000. Calculate their recognized (taxable) gain on the sale of their personal residence. 2. The following transactions were reported on a 1099-B. The taxpayer, who files as single, had taxable income of $100,000. Calculate the tax owed on the transactions. Description No. of...
Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint...
Paul and Donna Decker are married taxpayers, ages 44 and 42, respectively, who file a joint return for 2018. The Deckers live at 1121 College Avenue, Carmel, IN 46032. Paul is an assistant manager at Carmel Motor Inn, and Donna is a teacher at Carmel Elementary School. They present you with W–2 forms that reflect the following information: Paul Donna Salary $68,000 $56,000 Federal tax withheld 6,770 6,630 State income tax withheld 1,400 1,100 FICA (Social Security and Medicare withheld...
Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social...
Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice's birthday is September 21, 1969, and Bruce's is June 27, 1968. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247...
Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social...
Alice J. and Bruce M. Byrd are married taxpayers who file a joint return. Their Social Security numbers are 123-45-6789 and 111-11-1112, respectively. Alice’s birthday is September 21, 1971, and Bruce’s is June 27, 1970. They live at 473 Revere Avenue, Lowell, MA 01850. Alice is the office manager for Lowell Dental Clinic, 433 Broad Street, Lowell, MA 01850 (employer identification number 98-7654321). Bruce is the manager of a Super Burgers fast-food outlet owned and operated by Plymouth Corporation, 1247...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT