Because red flags are likely to be raised at the IRS by the reporting

OFFICIAL EXPLANATION



THE PROMPT

• Meaning?
→ Business owners who earn gambling money should report that gambling income to the IRS as "business revenue" in order to avoid raising red flags at the IRS and to avoid undergoing an audit.

→ So gambling income is a problem.

• The Big Issue: The, that, those, these, such, etc. as words that mean "something previously mentioned."**

My emphasis is on previously mentioned.

Sometimes we use words such as the, that, and even such as signals: we are talking about a noun that we have already mentioned or that is common knowledge (not applicable in this question).

→ The bank teller checked the cash deposit carefully, placing the bills in a mechanical counter to confirm she had added correctly.
"The" bills refers to the previously mentioned cash in the cash deposit.

→ Although bullying and pushiness may not seem all that harmful, such qualities create toxic atmospheres and enable the glorification of raw power.
(The phrase "such qualities" refers to "bullying and pushiness."

→ I like the cuisine of Italy better than that of England. "That" refers to cuisine. [Now, if only Italy had a Cadbury factory. . . .]

• The rule: when a word such as the, that, or such signals a "previously referenced" word, you must actually have mentioned that previous word before you use the shorter words to allude or refer to the earlier-mentioned thing.

When you read options C, D, and E, pretend as if you are reading each for the first time and without knowledge gleaned from options A and B.

THE OPTIONS

• Subject/verb disagreement
→ The plural subject owners does not agree with the singular verb is
Eliminate A


• I see no errors
• Because X, Y is logical. The prose is crisp. The language is active.
• This part is easy to see: "that income" means "gambling income."
KEEP


• No previous reference for "the income," and this "the" requires such a reference

→ What the heck is "the income" in this sentence referencing?
Reporting what "income"?
Why am I forced to wait until the end of the sentence to hazard a guess about what "the income" means, never mind knowing for sure?
Why? Because this is a poorly written sentence.

• "the reporting of" is clunky and not as concise or strong as similar language in option B.
Option B states: by reporting that income as
Option C states by the reporting of. We don't need the extra words.
Eliminate C


• No previous reference for "that" income, and this "that" requires such a reference
→ In English, it is jarring to hear a reference to something definite, such as that income, without having first heard about whatever "that" refers to.

It is illogical (and bad form) to refer to a noun that the writer has not yet mentioned.
ELIMINATE D

• No previous reference for "that" income. Same problem as that in options C and D

• A stylistic disaster for very specific reasons: long phrases where short ones would do and passive voice galore.
→ Compare options B and E
B: Because the reporting of gambling income is likely to raise red flags at the IRS, . . .
E: ... because of the red flags not having been raised at the IRS by the reporting of gambling income.
ELIMINATE E

The correct answer is B.

COMMENTS

the27s ,welcome to SC Butler.

I will repeat my standing invitation: all aspirants are invited to post on SC Butler.
Be brave. Post. I know. Doing so is hard. Do so anyway.
To teach is to understand.
Besides, you might just enjoy the confidence boost.

And who cares whether you get a few wrong? I do not. People make mistakes as they learn; in fact, mistakes are often how we learn.
Plus, I have been known to award kudos for bravery, irrespective of accuracy, as long as you give reasoning a shot on a medium to hard question.

These answers are all very good.
Nicely done.


**
From Lexico, the online dictionary from Oxford:
→ THE: Denoting one or more people or things already mentioned or assumed to be common knowledge. Here.

From Collins online dictionary:
→ THE: You use the at the beginning of noun groups to refer to someone or something that you have already mentioned or identified. Here.

My answer would be B

A is out because of 2 errors, 1) the way because is used here implies flags will be raised by reporting. It would be better to use because followed by a verb and then a consequence. 2) Business owners 'is' should be replaced by 'are' in the 2nd half of the sentence

B seems to be right option, with the because clause used correctly and the corrected SV error in A

C is well constructed, however, there are 2 different terms - 'income' and 'gambling income'. In the sentence they don't seem to be connected - most likely using a relative pronoun

D is incorrect. Their clause followed by , should have been followed by a Noun and not because

E is incorrect as there is no connection of 'that income' with the entire sentence. If this construction were to be right, the 2nd part of the sentence after , should have started with gambling income

Posted from my mobile device

My answer is (B). It took me 01:31.

(A) Gambling gain is indeed an unusual income. For one, only a minority of people engage in gambling. For another, many gamblers lose money while enriching the house.

So, when I first read this version, my reason of eliminating it was that the subordinate clause (introduced by because) does not explain the main clause. We can argue that, rightfully, if we understand "their income" means "gambling income", the relationship between two clauses is super clear. Without such epiphany, though, the use of "their income" flummoxes me.

Besides, the use of passive voice ("be raised") does not sport direct writing style.

(B) "that income" makes this version's meaning so much clearer! Only after reading (B) did I start to appreciate the meaning of (A). One word change (from "their" to "that") makes such a huge difference!

Besides, no passive voice is used.

(C) Again, a reasonable reader could not immediately understand the intended meaning of "reporting the income as business revenue.“ Making reader guess is not a writing style GMAT espouses.

(D) See above.
Also, passive voice is used.

(E) This part "because of the red flags not having been raised at the IRS by the reporting of gambling income" is just too convoluted to bear. Also, passive voice is used.

Because red flags are likely to be raised at the IRS by the reporting of gambling income, business owners who report their income as business revenue is less likely to undergo an audit.

Meaning inconsistent. S-V verb tense error.
"That" here looks ambiguous in initial go and I too crossed it out in the first go, but after going through all the answer choices, "meaning" of this sentence makes much more sense and also the referent of "that" comes out of the shadow as "gambling income". Author wants Business dealers to not disclose their incomes as gambling incomes rather disclose "that" income as business income or their will be "Audit". So, this is the correct answer choice in that view. Correct.
Though grammatically correct, the meaning of this sentence is slightly off. This sentence makes it seem that business and gambling incomes as two separate entities whereas both are actually the same. Incorrect.
What does "their" refer to here exactly? This sentence is absolute bs. Incorrect.
"that" income? What that income? Non-sensible.
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You can find the official explanation by clicking here.
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Hi

if any Expert can help me on this

The question stem talks about business owners who generally report their gambling Income as Business revenue is( correct is are) less likely to undergo Audit but the correct choice says business owners can reduce their chances of undergoing an audit by reporting that income as business revenue. Is this shift from Original Question/intended meaning acceptable. ( Mu doubt is if original stem talks about something that has already happened or on going thing i.e. "Business owners who report" then can correct choice be in "Can reduce" form.

A. Because red flags are likely to be raised at the IRS by the reporting of gambling income, business owners who report their income as business revenue is less likely to undergo an audit.

B. Because the reporting of gambling income is likely to raise red flags at the IRS, business owners can reduce their chances of undergoing an audit by reporting that income as business revenue.

Do not treat option (A) any differently from other four options. (A) is just one of five versions, and our aim is to find one best version (with no grammar error, no ridiculous meaning or convoluted style, etc.) Evaluate each option without taking the explicit or implied meaning of choice (A) into consideration. That is the right mindset we shall adopt.

(A) is not the arbiter of the "intended meaning". We are not the author, so we really do not know what "intended meaning" is.

Put it another way, any version can be option (A), and the best answer remains the same. Indeed, some third-party questions may actually rely on the "intended meaning" to eliminate choices. (You can also find those questions here.) Those questions are not well crafted.