Brown,a CPA,helped Cook organize a partnership that was actually an abusive tax shelter.Brown induced clients to participate by making false statements concerning the eligibility of deductions and tax credits.As a result of these activities,Cook derived $100,000 in gross income and Brown derived $50,000 in gross income.According to federal tax law,what is Brown's penalty for promoting this abusive tax shelter?

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Quizplus · Accepted Answer

According to the federal tax law,the penalty for promoting abusive tax shelters is $1,000,or 100 percent of the defendant's income from his/her participation in the tax shelter,whichever is lesser.As such,Brown's penalty for promoting an abusive tax shelter would be $1,000.

Brown,a CPA,helped Cook Organize a Partnership That Was Actually an Abusive