Reference no: EM13566942

Respond to the Ethics Case with the Statements on Standards for Tax Services For each of the following situations, state whether the taxpayer's action is tax evasion or tax avoidance A. Tom knows that farm rent received in cash or farm produce is income subject to tax. To avoid showing a cash receipt on his records, he rented 50 acres for 5 steers to be raised by the tenant. He used 2 of the steers for food for his family and gave 3 relatives. Because he did not sell the livestock, he did not report taxable income. B. Betty applied for and received a Social Security number for Kate, he pet cat. Surprised by how easy it was to get a Social Security number, she decided to claim a dependent exemption on her tax return for Kate.

Other than being a cat, Kate met all the tests for a dependent. C. Glen has put money in saving accounts in 50 banks. He knows a bank is not required to report to the IRS interest it pays him htat totals less than $10. Because the banks do not report the payments to the IRS, Glen does not show the interest he receives as taxable income. Although Glen's accountant has told him all interest he receives is taxable, Glen insists that the IRS will never know the difference. D. Bob entered a contract to sell a parcel of land at a $25,000 gain in 2011. To avoid reporting the gain in 2011, he closed the sale and delivered title to the land to the buyers on January 2, 2012?