Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to all of the $40,000.

Name: Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to all of the $40,000.
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Question

Quizplus · Accepted Answer

The 20% negligence penalty applies only to the portion of the deficiency attributable to negligence, which is $25,000 in this case, not the entire $40,000.

Upon Audit by the IRS,Faith Is Assessed a Deficiency of $40,000