Asked by Jessica Castro on Jun 01, 2024
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Lloyd is a partner of an ordinary partnership firm in the business of providing tax services.While serving a client on behalf of the partnership,Lloyd's partner Janet intentionally understates the client's taxable income on a federal tax return.When the true income is reported a few years later,the client is required to pay a penalty.The client sues the partnership and its partners.Which of the following is correct?
A) Janet is not liable to the client because she was acting on behalf of the partnership.
B) Lloyd is not liable to the client,unless he authorized Janet to understate the client's income.
C) The partnership is not liable to the client because the intentional tort is outside the scope of business.
D) Janet is not liable to the client because she was acting in the ordinary course of business.
Taxable Income
The portion of an individual's or entity's income used to determine how much tax is owed to the government in a given tax year.
Federal Tax Return
The annual submission required by the federal government detailing an individual or entity's income, deductions, and tax liability.
Intentional Tort
A wrongful act done deliberately to harm another person, which can lead to civil legal liability.
- Recognize the entities' liability for torts committed by partners within the scope of partnership business.
Verified Answer
Learning Objectives
- Recognize the entities' liability for torts committed by partners within the scope of partnership business.
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