Freddie preparer penalty

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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

Reference no: EM13132379

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