Company WB is evaluating a business opportunity with uncertain tax consequences. If the company takes a conservative approach by assuming the least beneficial tax consequences, the tax cost is $95,000. If the company takes an aggressive approach by assuming the most beneficial tax consequences, the tax cost is only $86,000. If the company takes the aggressive approach, the IRS will certainly challenge the approach on audit.
Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question