This year, the IRS audited Mr. and Mr. Simon's 2009 income tax return and determined that they underpaid their tax by $13,780. Which of the following statements is true?

Question

Quizplus · Accepted Answer

If the revenue agent concludes that the Simons made a reasonable attempt to compute their tax, they will still have to pay the $13,780 that they underpaid plus interest on the underpayment as a result of the audit. The amount of interest will depend on how long it took the IRS to audit their return and any subsequent appeals. If the revenue agent concludes that the Simons were negligent in preparing their return, they may be subject to a penalty of up to 20% of the underpayment, which in this case could be $10,335. Therefore, option C is the most accurate statement.

This Year, the IRS Audited Mr