Reference no: EM133301975

The California Franchise Tax Board is auditing the books of RWC Solar Energy Company to help ensure that the company is paying the proper amount of corporate income tax due for the year. Jones, the company treasurer is working with the state auditor. When directly questioned by the auditor as to whether the company actually incurred specific expenses (about $15,000) for some "big ticket" items the company bought for use in its operations, Jones said "yes", but he wasn't 100% sure whether this was true or not. If these expenses were actually incurred and paid, then the company's income tax liability would be lowered. A year later, the auditor found out that Jones was wrong - the company never had incurred or paid these expenses at the time the auditor asked him about them. RTC's filed corporate tax return shows that this $15,000 expense was paid by the company. The Sacramento County DA is opening a criminal investigation of RWC and Jones for one count of tax fraud under Cal. *RTC section 7152. Are Jones and/or RWC guilty of a violation of this law? Explain.