Compute ms barths preparer penalty

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Reference no: EM13887449

Ms. Barth is a professional tax return preparer. Three years ago, she prepared the Form 1120 for Denver Inc. Her fee for the preparation was $14,850. Upon audit of the re-turn, the IRS disallowed a $112,000 deduction, which increased the corporation's tax liability by $39,200. Compute Ms. Barth's preparer penalty if the IRS concludes that:

a. Ms. Barth had no reasonable legal basis for claiming the deduction and was not acting in good faith by doing so.

b. Ms. Barth intentionally disregarded the tax law by claiming the deduction in a willful attempt to understate Denver's tax.

c. How would your answers to a. and b. change if Ms. Barth's preparation fee was only $8,200?

Reference no: EM13887449

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