The IRS who audited Mr. Kodak's 2018 Form 1040 assessed an $87,400 deficiency. If the agent believes that the entire deficiency was caused by Mr. Kodak's willful attempt to cheat the government, compute the resulting civil fraud penalty.

Question

Quizplus · Accepted Answer

The civil fraud penalty is equal to 75% of the underpayment attributable to fraud. In this case, the entire deficiency of $87,400 is attributable to fraud, so the civil fraud penalty would be 75% of $87,400, which is $65,550. Therefore, the correct answer is C.

The IRS Who Audited Mr