Question

Tre/ False

8- Tax avoidance is discouraged as being anti-American.

9- The Sixteenth Amendment to the U.S. Constitution gives Congress the power to lay and collect taxes on income from whatever sources derived, without apportionment among the several states, and without regard to any census or enumeration.

10- Tax avoidance should be at a top of every taxpayer's list for tax planning.

11- Upon examination of the tax return, the IRS has the authority to impose additional taxes and penalties.

12- Dr. Yomo, a cash basis taxpayer, received a check for $250 after banking hours on December 30, 2018, from a patient. Since Dr.Yamo could not deposit the check in his business checking account until January 2, 2019, the fee of $250 is not included in his income for 2018.

13- Paul Penn, a cash basis taxpayer, received a desk in exchange for bookkeeping services. He should report the fair market value of the desk as income.

14- Ms- Clara Caryola, a teacher, received a cash award of $5,000 from the Chamber of Commerce in recognition of her past accomplishments in the field of education. She was chosen without action on her part and is not expected to perform any future service. The $5000 award is the same as any other prize and must be reported by Clara as income in 2018.

15- In 2018, Greta Grady received $ 50,000 in advance payment under a 50-month lease agreement. The $50,000 represent the entire amount due under the lease. There was no restriction on the use or enjoyment of the payments. Greta must include the $50,000 as income in 2018.

Answer 1

8- Solution: False

Explanation: The avoidance of tax is discouraged as being an American

9- Solution: True

Explanation: The U.S. Constitution Sixteenth Amendment provides the power to the Congress to lay and collect taxes on income from any derived sources, without apportionment among various states, and without the census.

10- Solution: True

Explanation: The tax planning must include the avoidance of tax

11- Solution: True

Explanation: IRS holds the authority to impose additional penalties and taxes.

12- Solution: False

Explanation: Dr. Yomo is earning income when he receives the check thus it s not a concern whether or not he can cash it.

13- Solution: True

Explanation: The cash basis taxpayers must report the fair market value in their income