Compute the penalty that the irs agent can impose

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Reference no: EM131819633

Problem

1. During the audit of Mr. and Mrs. Greenwood's income tax return, the revenue agent concluded that the couple had claimed a $26,300 deduction that was not allowed by law. The improper deduction reduced the couple's tax by $19,205. The Greenwood's total tax deficiency was $13,890.

a. Compute the penalty that the IRS agent can impose if the agent concludes that the improper deduction was attributable to negligence.

b. Compute the penalty that the IRS agent can impose if the agent concludes that the improper deduction was attributable to fraud.

Reference no: EM131819633

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