Final answer:
Both the individual taxpayer and the tax preparer may be subject to IRS penalties. The correct answer is c) both the individual taxpayer and the tax preparer. Both the individual taxpayer and the tax preparer may be subject to IRS penalties for different reasons.
Step-by-step explanation:
The correct answer is c) both the individual taxpayer and the tax preparer. Both the individual taxpayer and the tax preparer may be subject to IRS penalties for different reasons. The individual taxpayer can be penalized for incorrect or false information reported on their tax return, while the tax preparer can be penalized for negligence or intentional misconduct in preparing the tax return.
For example, if the individual taxpayer knowingly provides false information to the tax preparer, both parties could be subject to penalties. Similarly, if the tax preparer fails to accurately report the information provided by the individual taxpayer, both parties may face penalties.
In some cases, the individual taxpayer may be held responsible even if the tax preparer has closed their business. It is important for both parties to ensure the accuracy and truthfulness of the information reported on the tax return to avoid IRS penalties.
The question asks which parties may be subject to IRS penalties. The correct answer is c) both the individual taxpayer and the tax preparer. The Internal Revenue Service (IRS) can impose penalties on both parties depending on the situation. If an individual taxpayer submits incorrect or fraudulent information, they can face penalties for their actions.
Similarly, tax preparers can also be penalized if they are found to be responsible for errors or fraud in the preparation of the tax returns. The closure of a tax preparer's business does not absolve the individual taxpayer from penalties, as taxpayers are ultimately responsible for the information on their tax returns.