The revenue agent who audited Mr and Mrs Wilke's 2015 Form 1040 assessed a $40,200 deficiency and concluded that $13,900 of the deficiency resulted from Mr Wilke's deliberate disregard of the tax rules concerning business entertainment expense. The remaining deficiency resulted from various errors caused by confusing instructions on the tax forms. Compute the negligence penalty that the agent can impose.

Question

Quizplus · Accepted Answer

The negligence penalty equals 20% of the $13,900 portion of the deficiency attributable to a deliberate disregard of tax rules.

The Revenue Agent Who Audited Mr and Mrs Wilke's 2015