The revenue agent who audited Mr. Silver's 2018 Form 1040 concluded that Mr. Silver deliberately disregarded the tax rules about charitable contributions. Consequently, the agent disallowed $19,320 of Mr. Silver's contribution deduction. Mr. Silver also miscalculated his AMT in spite of his good faith effort to make the difficult calculation. Because of these two errors, the agent assessed a tax deficiency for 2018. Which of the following statements is false?

Question

Quizplus · Accepted Answer

The agent can impose a negligence penalty on the portion of the deficiency attributable to the disallowed contribution deduction, but not on the entire deficiency. The agent does have the authority to impose a negligence penalty, and if one is imposed, Mr. Silver has the right to appeal. However, the negligence penalty can only be imposed on the portion of the deficiency that is attributable to the disallowed deduction, not on the entire deficiency.

The Revenue Agent Who Audited Mr