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Ten years ago, the US Internal Revenue service began to [#permalink]
01 Apr 2004, 06:04
50% (02:41) correct
50% (01:18) wrong based on 2 sessions
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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
I chose D for the following reason. Clearly E and D are the contenders. E is misleading because it makes you believe that -> if auditing is effective in the cases of cheating means people know that auditing is indeed effective in catching people who cheat.
However E does not say that. Audit being successfull or not is federal government's problem and the people's
How many of you drive carefully(for those in US) when you see the sign that says speed checked by Radar. Many might beliving that Radar indeed works. The police might not have kept a Radar device at all. The argument is talking about perception rather than the truthfullness.