Business, 24.03.2020 00:04 sonnie28

Lance prepares tax returns for his clients. He prepared his brother’s income tax return for $1,000 and he willfully neglects to include $30,000 of income since his brother did not receive a Form 1099 for his consulting work. Lance is aware that his brother earned the $30,000 but fails to report it since he does not believe the IRS will catch the understatement of income. The additional tax on this $30,000 of income would have been $7,500. What is the amount of the penalty that may be imposed on Lance for the understatement of income? Lance charged his brother $3,750 to prepare the return.

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Lance prepares tax returns for his clients. He prepared his brother’s income tax return for $1,000 a...