Freddie purposely omitted 100000 of cash receipts that, Ask an Expert

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Freddie has been assessed a preparer penalty for willful and reckless conduct. When he completed Peggy's Federal income tax return ( who is in the 35% tax bracket), Freddie purposely omitted $100,000 of cash receipts that should have been reported as gross income. Freddie charged Peggy $6,000 to prepare the return. What is Freddie's preparer penalty?

a. $0, because Peggy incurred her own understatement penalty for the return.

b. $3,000

c. $5,000

d. $17,500

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9412571

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