Work through the self-study problem in this section if you need to, but do not post your answer. Answer the following question: Why would a taxpayer want to misstate his or her income or claim ineligible persons as dependents when EITC is a factor on their return? What kinds of questions would you ask to make sure that the taxpayer is honestly reporting income and dependents?

Work through the self-study problem in this section if you need to, but do not post your answer. Answer the following question: Why would a taxpayer want to misstate his or her income or claim ineligible persons as dependents when EITC is a factor on their return? What kinds of questions would you ask to make sure that the taxpayer is honestly reporting income and dependents?

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter11: Invest Or Losses

Section: Chapter Questions

Problem 1DQ

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Similar questions

List some events that increase or decrease an investors at-risk amount. What are some strategies that a taxpayer can employ to increase the at-risk amount to claim a higher deduction for losses?
Among the highlights of train law, which do you think is disadvantageous for the taxpayer? Explain
Choose the response that accurately completes the following sentence. To meet one of the due diligence requirements of a paid tax preparer, it is not enough to ask more questions; tax preparers must also:
Do income exclusions provide taxpayers “tangible” benefits Is the IRS appearing to be socially responsible when it excludes from gross income, living expenses, property damage and funeral expenses tied to Disaster Relief, employer payments to deceased employees surviving family members, insurance proceeds for the terminally ill and other similar considerations? Is there some underlying purpose for offering exclusions to taxpayers?
Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.
Tax preparers often have a difference of opinion with their clients as to how some transactions should be treated on a tax return. If a client of yours does not wish to report information on their tax return that you feel should be reported, how would you handle the situation? Write in at least 300 words with two scholarly sources.
One of the following statements is correct. A choice of by an individual of the Optional Standard Deduction means that: His/Her income tax return need not be accompanied by financial statements. S/he need not need keep books of accounts S/he need not have records of gross income His/Her choice can still be changed by filing an amended return.
In choosing between taking the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following have? a. The age of the taxpayer(s). b. The health (i.e., physical condition) of the taxpayer. c. Whether taxpayers rent or own their residence. d. Taxpayers filing status (e.g., single, married, filing jointly). e. Whether married taxpayers decide to file separate returns. f. The taxpayers uninsured personal residence was recently destroyed by a wildfire (the region was declared a disaster area by the Federal government). g. The number of dependents the taxpayer can claim.