A. Under what circumstances would an offer in compromise be appropriate for a taxpayer?

B. Rita, a calendar year individual taxpayer, files her 2018 income tax return on October 5, 2020. An extension for filing her income tax return was not obtained. The tax return reflects additional income tax due of $20,000. What is the amount of Rita's penalties for failure to pay and for failure to file?

C. The Amy Trust is a simple trust that uses the calendar year for tax purposes. Its income beneficiaries, Judy and Janice, are entitled to the trust's annual accounting income in shares of one-half each. The Amy Trust reports the following for the current year:

Ordinary income $200,000

Long-term capital gains, allocable to corpus $40,000

Trustee commission expense, allocable to corpus $3,800

a. What is the trust's distributable net income?

b. How much gross income should each beneficiary report?

c. What is the trust's taxable income?