Give an example of tax planning between a shareholder/ employee and a related corporation.
Answer to relevant QuestionsGive one or more examples to show how a taxpayer might take advantage of preferential tax rates on long-term capital gains by structuring transactions to produce capital gains rather than ordinary income. Distinguish among the various means by which the IRS selects a tax return for examination. For this purpose, examine the criteria of: a. Scope of review b. Probability of selection c. Preservation of taxpayer ...A statutory notice of deficiency gives the taxpayer 90 days to do which of the following? a. Pay the tax b. Request an administrative appeal c. File a suit in the U. S. Tax Court d. File a protest Your supervisor says that the U. S. Constitution forces the IRS to reveal the make-up of the DIF formula that it uses to select tax returns for audit. Prepare a file memo assessing the supervisor’s assertion. Indicate whether the following statements are true or false: a. The government never pays a taxpayer interest on an overpayment of tax. b. Penalties may be included as an itemized deduction on an individual’s tax return. ...
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