<">

Question Details

(Solved) (Latest ver. Aug 2020) - Methods to reconstruct income

Brief item decscription


Item details:

Question:

Please read and give your thoughts on this.

The use of indirect methods to reconstruct income by the IRS is limited by Code Sec. 7602(e), which prohibits financial status or economic reality techniques to determine the existence of unreported income unless there is another reasonable indication of unreported income. Forensic accountants can however use these procedures to help determine if a suspect is living beyond their known income and the analysis can be entered into evidence. It is often necessary to obtain a subpoena in order to get a suspect to provide a copy of their tax returns, When reviewing non-business returns, it is necessary to question the suspect about possible sources of income other than what is reported on the tax return. If there is no other information in the file indicating potential unreported income, the minimum income probe is met. However, for individuals who are self-employed and file a Schedule C or F with their Form 1040, an analysis can be made from the information provided on the tax return to determine if the income reported on the tax return is sufficient to support the individual's lifestyle. When conducting a lifestyle audit particular attention should be paid to credit card charges, mortgage interest expenses, business expenses, assets acquired throughout the year, investment accounts, and bank account balances.

 







About this question:
STATUS
Answered
QUALITY
Approved
ANSWER RATING

This question was answered on: Sep 16, 2020

PRICE: $11.5

Solution~00010988.zip (18.37 KB)

Buy this answer for only: $11.5

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.
SiteLock

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now