Final answer:
The IRS treats an adjustment in tax resulting from an unallowable item as a correction of a mathematical or clerical error.
Step-by-step explanation:
The subject of this question is Business as it relates to tax adjustments made by the IRS.
In the context of taxes, an adjustment refers to a change made to a taxpayer's return. An unallowable item refers to an expense that is not eligible for deduction or credit according to the tax laws. The IRS treats an adjustment resulting from an unallowable item as a correction of a mathematical or clerical error.
For example, if a taxpayer claimed a deduction for a personal expense that is not allowed, such as a vacation, the IRS may make an adjustment to disallow that deduction and correct it as a mathematical or clerical error. This correction will result in an increase in the taxpayer's tax liability.