You are a CPA working for a local firm and have been assigned the 2019 tax return of Bobby Crosser. In

going over the data that Bobby gave the firm, you are surprised to see that he has reported no dividend

income or gains from the sale of stock. You recently prepared the 2019 gift tax return of Bobby's aunt

Ester. In that return, Ester reported a gift of stock to Bobby on January 6, 2019. The stock had a fair

market value of $50,000, and Ester's basis in the stock (which became Bobby's basis) was $5,000.

1. Based on your findings, what are the penalties tied with this case and requests any additional information.