During year 1, Amy received from her employer, in addition to her annual salary of $100,000 an

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Question:

During year 1, Amy received from her employer, in addition to her annual salary of $100,000 an antique work of art as additional compensation.

A. Assume that Amy properly reported the artwork as gross income on her year 1 return, which she filed on April 15, year 2. Her return reflected her valuation of $10,000. The IRS audited Amy's return on February 1, year 5, which is not a leap year, the IRS mailed to her a notice of deficiency reflecting its determination that the correct value of the artwork, includible in her gross income, was $30,000. Amy had not responded to the notice of deficiency.

i. When is the last day that the IRS can assess additional tax with respect to Amy's year 1 tax?.

ii. when would the last day for the IRS to assess additional tax with respect to Amy's year 1 return be if Amy had filed her return on March 1, year 2 instead of April 15.?

111. when would the last day for the IRS to assess additional tax with respect to Amy's Year 1 return be if Amy had filed her return on June 2, Year 2 instead?. Does it matter whether Amy had obtained an extension of time to file?.

iv. when would the last day for the IRS to assess additional tax with respect to Amy's Year 1 return be if Amy's annual salary were $40,000 instead of $100,000.?

B. Assume instead that Amy did not report the receipt of the artwork on her Year 1 return, which she filed on April 15th, Year 2. On february 1, Year 5, which is not a leap year, the IRS mailed to her a notice of deficiency reflecting its determination that Amy has $30,000 of additional gross income, attributable to the artwork.

i. Assume that Amy was unaware that the artwork constitutes gross income to her, and that is why she did not report it on her return.

a. If Amy does not respond to the notice of deficiency, when is the last day IRS may assess additional tax with respect to Amy's Year 1 return?.

b.If Amy responds to the notice of deficiency on March 10, year 5 by signing a form 870 waiving restriction on assessment of tax, when is the last day the IRS may assess additional tax with respect to Amy's Year 1 return?.

c. Assume that Amy responds to the notice of deficiency by filing a tax court petition on April 3, Year 5. The tax court hear the case on May 4, Year 6, and its decision, which is adverse to Amy, become final on February 1, Year 7. Assuming Years 5,6 and 7 are not leap years, when is the last day the IRS may assess additional tax with respect to Amy's Year 1 return?.

ii. If Amy had instead intentionally failed to report the value of the artwork as gross income, and she does not respond to the notice of deficiency, when is the last day the IRS may assess additional tax with respect to Amy's Year 1 return?. How would your answer change if Amy had filed an amended return on June 16, Year 2, reporting $30,000 of gross income from the receipt of the artwork?

iii. Assume that Amy had her return prepared by an accountant who intentionally failed to report the value of the artwork as gross income and Amy was aware that the artwork had to be reported. when is the last day the IRS may assess additional tax with respect to Amy's Year 1 return?.

C. Assume that Amy Fraudulently failed to file a return for year 1. She subsequently filed the return on June 1, YeR 5. When is the last day the IRS may assess tax with respect to Amys Year 1 tax year?.