# Rivera underpaid her income tax by $45,000. The IRS can prove that $40,000 of the underpayment was

## Question:

a. Determine Rivera's civil fraud penalty.

b. Rivera pays the penalty five years after committing the fraudulent act. Her after tax rate of return on available cash is 9%. What is the present value of Rivera's penalty?

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**Related Book For**

## South Western Federal Taxation 2018 Corporations Partnerships Estates And Trusts

**ISBN:** 1389

41st Edition

**Authors:** William H. Hoffman, William A. Raabe, James C. Young, Annette Nellen, David M. Maloney