A portion of Ron's underpayment of tax (1/2 of the underpayment of $10,000) was determined

by the IRS to be due to fraud. As it relates to Ron's situation, which of the following statements

concerning the applicability of the accuracy-related penalty is correct?

a) The calculation for the accuracy-related penalty does not include the amount of the

underpayment on which the fraud penalty is charged.

b) The calculation for the accuracy-related penalty includes the amount of the underpayment

on which the fraud penalty is charged.

c) If any part of an underpayment is due to fraud, the entire underpayment will be subject to

a penalty of up to 75% of the underpayment.

d) Ron must pay an accuracy-related penalty and a fraud penalty on the portion of the

underpayment which is due to fraud.

Troy's tax preparer, Walt, filed Form 8275, Disclosure Statement, to provide information about

Troy's tax treatment of an item that resulted in his understatement of tax by $1,050. Which of

the statements below best describes a reason for filing Form 8275?

a) The taxpayer wants to disclose items or positions which are contrary to regulations.

b) The taxpayer wants to disclose relevant facts which will show that his tax treatment of an

item had a reasonable basis.

c) The taxpayer wants to disclose relevant facts, in accordance with Rev. Proc. 2012-51,

which justify tax treatment of an item which resulted in substantial understatement.

d) The taxpayer wishes to appeal a penalty to the IRS which resulted from an inadvertent

omission

Fritz had his taxes filed electronically on April 15th and owed $2,000. Although he filed his

taxes on time, he did not pay the $2,000 until June 30th. His penalty for paying tax late will be:

a) The smaller of $210 or 100% of the unpaid tax

b) 25% of the unpaid tax

c) of 1% of the unpaid tax for each month or part of a month

d) 20% of the underpayment