Craig commits fraud on his tax return. it is found that he was $40,000 deficient in his tax because of the fraud. what would his penalty be?

a. $30,000

b. $0

c. $40,000

d. $500

The criminal fraud tax penalty is 75% of the money deficiency attributable to the fraud. Since the fraud deficient committed by Craig amounts to $40,000, therefore the penalty is:

75% = 0.75

Penalty = 0.75 * $40,000

Penalty = $30,000

Answer:

A. $30,000