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# State tax officials, having had considerable success in

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state tax plan - kaplan Diagnostic [#permalink]

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29 Jun 2012, 03:11
State tax officials, having had considerable success in persuading delinquent individuals to pay their back taxes through the incentive of reduced penalties, plan to adopt a similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

a. federal tax officials will not attempt to collect back taxes in the same manner
b. stiff fines are not the only way to collect past due corporate taxes
c. corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are
d. past due taxes cannot be collected without a reduction in penalties
e. penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

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Re: state tax plan - kaplan Diagnostic [#permalink]

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29 Jun 2012, 03:39
Good Causal question.

Concession in fines ---->successful payback from defaulters

Though (D) is tempting, but (B) is correct since, A to B doesn't mean B to A too.

There could be other ways (legislative,punitive etc..) to make the defaulters payback the money.
But it would not be sufficient to say that the taxes CAN NOT be collected without the concession.

IMO-(B)
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30 Jun 2012, 03:37
Can some expert Pl ans this Q in detail ??

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09 Nov 2015, 16:41
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29 May 2017, 16:37

With answer choice D, the argument doesn't assume that this is the only way to collect back taxes, it just this method worked with individuals.

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29 May 2017, 21:44
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Expert's post
gmataquaguy wrote:
State tax officials, having had considerable success in persuading delinquent individuals to pay their back taxes through the incentive of reduced penalties, plan to adopt a similiar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

A) federal tax officials will not attempt to collect back taxes in the same manner
B) stiff fines are not the only way to collect past due corporate taxes
C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
D) past due taxes cannot be collected without a reduction in penalties
E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.

Responding to a pm:

Plan:
State has had considerable success in collecting individuals' back taxes through reduced penalties incentive.
It intends to do the same with corporations.

We need to find an assumption - something that is required to make this plan work.

A) federal tax officials will not attempt to collect back taxes in the same manner
We don't need to worry about what federal tax officials may do. It is irrelevant to our argument.

B) stiff fines are not the only way to collect past due corporate taxes
This NEEDS to be correct for our plan to work. We plan to give reduced penalties incentive i.e. we plan to reduce stiff fines. If stiff fines were the only way to collect past due corporate taxes, then our plan will fail. We have to assume that past due taxes can be collected without stiff fines too. And hence this is the answer.

C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
The length of time for which the back taxes are due has not been discussed anywhere and has no relevance to our argument. We are concerned about reducing penalties.

D) past due taxes cannot be collected without a reduction in penalties
We do not NEED this for our plan to be successful. It is not a necessary condition. Think of it this way. I have a problem A - (back taxes). I decide to solve it by using solution B (reduce stiff penalties). For my plan to succeed, is it necessary that B is the ONLY solution to A? No. There could be ten other solutions - C, D etc. I chose to use B as a solution but it needn't be the only solution for B to be successful. Hope you see why (D) is not correct.

E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.
We don't need to assume this. We might be able to make the plan work with a smaller cut in the fines or might need to bigger cut for the corporations.

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30 May 2017, 04:42
VeritasPrepKarishma wrote:
gmataquaguy wrote:
State tax officials, having had considerable success in persuading delinquent individuals to pay their back taxes through the incentive of reduced penalties, plan to adopt a similiar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

A) federal tax officials will not attempt to collect back taxes in the same manner
B) stiff fines are not the only way to collect past due corporate taxes
C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
D) past due taxes cannot be collected without a reduction in penalties
E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.

Responding to a pm:

Plan:
State has had considerable success in collecting individuals' back taxes through reduced penalties incentive.
It intends to do the same with corporations.

We need to find an assumption - something that is required to make this plan work.

A) federal tax officials will not attempt to collect back taxes in the same manner
We don't need to worry about what federal tax officials may do. It is irrelevant to our argument.

B) stiff fines are not the only way to collect past due corporate taxes
This NEEDS to be correct for our plan to work. We plan to give reduced penalties incentive i.e. we plan to reduce stiff fines. If stiff fines were the only way to collect past due corporate taxes, then our plan will fail. We have to assume that past due taxes can be collected without stiff fines too. And hence this is the answer.

C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
The length of time for which the back taxes are due has not been discussed anywhere and has no relevance to our argument. We are concerned about reducing penalties.

D) past due taxes cannot be collected without a reduction in penalties
We do not NEED this for our plan to be successful. It is not a necessary condition. Think of it this way. I have a problem A - (back taxes). I decide to solve it by using solution B (reduce stiff penalties). For my plan to succeed, is it necessary that B is the ONLY solution to A? No. There could be ten other solutions - C, D etc. I chose to use B as a solution but it needn't be the only solution for B to be successful. Hope you see why (D) is not correct.

E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.
We don't need to assume this. We might be able to make the plan work with a smaller cut in the fines or might need to bigger cut for the corporations.

Thanks Karishma, I have a small query though. Doesn't assumption have to bring in new information?
+1 Kudos for your explanation for incorrect option D. Cheers.
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30 May 2017, 10:26
VeritasPrepKarishma wrote:
gmataquaguy wrote:
State tax officials, having had considerable success in persuading delinquent individuals to pay their back taxes through the incentive of reduced penalties, plan to adopt a similiar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

A) federal tax officials will not attempt to collect back taxes in the same manner
B) stiff fines are not the only way to collect past due corporate taxes
C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
D) past due taxes cannot be collected without a reduction in penalties
E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.

Responding to a pm:

Plan:
State has had considerable success in collecting individuals' back taxes through reduced penalties incentive.
It intends to do the same with corporations.

We need to find an assumption - something that is required to make this plan work.

A) federal tax officials will not attempt to collect back taxes in the same manner
We don't need to worry about what federal tax officials may do. It is irrelevant to our argument.

B) stiff fines are not the only way to collect past due corporate taxes
This NEEDS to be correct for our plan to work. We plan to give reduced penalties incentive i.e. we plan to reduce stiff fines. If stiff fines were the only way to collect past due corporate taxes, then our plan will fail. We have to assume that past due taxes can be collected without stiff fines too. And hence this is the answer.

C) corporations tend to be delinquent in their taxes for teh same length of time that individual taxpayers are
The length of time for which the back taxes are due has not been discussed anywhere and has no relevance to our argument. We are concerned about reducing penalties.

D) past due taxes cannot be collected without a reduction in penalties
We do not NEED this for our plan to be successful. It is not a necessary condition. Think of it this way. I have a problem A - (back taxes). I decide to solve it by using solution B (reduce stiff penalties). For my plan to succeed, is it necessary that B is the ONLY solution to A? No. There could be ten other solutions - C, D etc. I chose to use B as a solution but it needn't be the only solution for B to be successful. Hope you see why (D) is not correct.

E) penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals.
We don't need to assume this. We might be able to make the plan work with a smaller cut in the fines or might need to bigger cut for the corporations.

Thanks Karishma, I have a small query though. Doesn't assumption have to bring in new information?
+1 Kudos for your explanation for incorrect option D. Cheers.

Yes, an assumption has to bring in new information. The argument does not give you "stiff fines are not the only way to collect past due CORPORATE taxes". It is new information. We assume this, plan accordingly and hope that our plan works.
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Re: State tax officials, having had considerable success in   [#permalink] 30 May 2017, 10:26

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