Explain the purpose of "intermediate sanctions."
What will be an ideal response?
Intermediate sanctions exist to allow the Internal Revenue Service (IRS) to assess penalties on a not-for-profit organization when a transaction confers a substantial benefit on a disqualified person. A disqualified person is one who has substantial influence over the organization's affairs. Examples of excess benefit transactions include unreasonable compensation, sales of assets at bargain prices, and lease arrangements. Intermediate sanctions allow the IRS to penalize the organization and the disqualified party who received the benefits rather than revoking the not-for-profit's tax-exempt status (its other option).
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A supervisor should have considerable input in making the final decision to hire a candidate, but should not be the only one to make the decision.
Equity is defined as a residual claim such that assets plus liabilities equals equity
Indicate whether the statement is true or false
RGD Corporation was a C corporation from its inception in 2014 through 2018. However, it elected S corporation status effective January 1, 2019. RGD had $50,000 of earnings and profits at the end of 2018. RGD reported the following information for its 2019 tax year.DescriptionAmountConsulting revenue$99,000 Salary to owners (40,000)Employee wages (30,000)Depreciation expense (5,000)Municipal bond interest 6,000 Interest income 42,000 Dividend income 25,000 Overall net income$97,000 What amount of excess net passive income tax is RGD liable for in 2019? Assume the corporate tax rate is 21%.
What will be an ideal response?
The ____________ starts with the premise that quality lies in the eye of the beholder
a. transcendent view b. user-based definition c. manufacturing-based approach d. product-based approach e. value-based definition