Question: Troy's 2009 tax return is audited. The auditor determines that Troy inadvertently understated his ending inventory in calculating his business income. The error creates an

Troy's 2009 tax return is audited. The auditor determines that Troy inadvertently understated his ending inventory in calculating his business income. The error creates an additional tax liability of $5,000. The IRS charges interest on the additional tax liability of $600.
Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.

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