Question
Blair underpaid her taxes by $381,000. A portion of the underpayment was shown to be attributable to Blair's negligence ($152,400). A court found that the
Blair underpaid her taxes by $381,000. A portion of the underpayment was shown to be attributable to Blair's negligence ($152,400). A court found that the rest of the deficiency constituted civil fraud ($228,600).
a. Compute the total fraud and negligence penalties. $.
b. Blair pays the penalties four years after committing the improper acts. Her after-tax rate of return on available cash is 7%.The present value factor for four years at 7% is 0.7629. What is the present value of Blairs penalty obligations?
Round your answer to the nearest dollar.
The present value of Blairs penalty obligations is $.
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