Explain the four conditions that must be met in civil cases for the burden of proving any factual issue relevant to the determination of taxpayer liability to rest with the IRS.
What will be an ideal response?
The taxpayer must introduce "credible evidence," evidence of a quality sufficient to serve as the basis of a court decision. The taxpayer must comply with the recordkeeping and substantiation requirements of the IRC, including the proper documentation of meal and entertainment expenses, charitable contributions, and foreign controlled businesses. Also, the taxpayer must cooperate with the reasonable requests of the IRS for witnesses, information, documents, meetings, and interviews. Finally, the taxpayer must be either a legal person with a net worth not exceeding $7 million or a natural person.
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In preparing a company's statement of cash flows using the indirect method, the following information is available: Net income$58,000? Accounts payable decreased by 24,000? Accounts receivable increased by 31,000? Inventories increased by 11,000? Cash dividends paid 15,200? Depreciation expense 26,000? Net cash provided by operating activities was:
A. $50,000. B. $138,000. C. $74,800. D. $36,000. E. $18,000.
Which of the following statements is false?
a. Selling and administrative expenses can be predicted in the same manner as overhead costs. b. In estimating overhead costs, fixed, variable, and mixed costs must be identified. c. Capital budgeting focuses on the short-term needs of the company. d. The capital budget affects the master budget through depreciation expense and cash payments.
V&P Company exchanged unencumbered investment land for farmland subject to a $200,000 mortgage. If V&P realized a $168,000 gain on the exchange, it must recognize the entire gain.
Answer the following statement true (T) or false (F)
________ is a situation in which a creditor agrees to extend credit only if the purchaser pledges some personal property as collateral for the loan
A) Floating lien B) Attachment C) Mortgage D) Secured credit