Which of the following is more likely to receive IRS scrutiny under the assignment of income doctrine?
A) A corporation paying its shareholders a $20,000 dividend
B) A parent employing her child in the family business
C) A taxpayer gifting stock to his children
D) A cash-basis business delaying billing its customers until after year end
E) None of these

Question

Quizplus · Accepted Answer

The assignment of income doctrine states that income cannot be assigned to someone in a lower tax bracket to avoid paying income tax. A parent employing their child in the family business may receive IRS scrutiny as the parent may be attempting to shift income to the child who may be in a lower tax bracket.

Which of the Following Is More Likely to Receive IRS