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MZQJ5850
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Joined: 20 Mar 2009
Location: United States
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Posts: 24

Posted: 08 Jun 2009 at 10:33 \| IP Logged

A corporation's tax year can be reopened after all statutes of limitations have expired if:
I. The tax return has a 50% nonfraudulent omission from gross income.
II. The corporation prevails in a determination allowing a deduction in an open tax year that was taken erroneously in a closed tax year.

what is the answer for this question. The answer is II right. But the explanation shows that both are wrong. from Becker chapter 3

optimistCPA
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Joined: 03 Mar 2009
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Posts: 360

Posted: 08 Jun 2009 at 14:48 \| IP Logged

You are right. Answer is II.

I is wrong, because it is regarding non-fraudulent omission. For Non-fraudulent omission the statute of limitations does expire.

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