Ten years ago, the US Internal Revenue service began to audit one
out of every 100 tax returns instead of the previous rate of only one
out of every 500 . Since then the amount of taxes paid on a given
amount of income has increased for all income brackets. We can
conclude that the public perception of increased watchfulness by the
IRS leads to a reduction of cheating on income tax returns.
The argument above assumes which of the following?
I. Most workers do not try to cheat on their income taxes.
II. The observed increase in tax payments is due to truthful
reporting on the part of taxpayers.
III. Public perception of the vigilance of the IRS is directly linked
to the rate of auditing.
IV. Present auditing procedures used by the IRS are effective cases
in which people have attempted to cheat on their taxes.
a. I only
b. I and II
c. I, II and III
d. II and III
e. II, III and IV