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Taxes

Expert replies
by imskpwr » Thu Sep 13, 2012 3:45 am
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

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
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Source: — Critical Reasoning |

by GMATGuruNY » Thu Sep 13, 2012 3:56 am
imskpwr 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 similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
Apply the NEGATION test.
Answer choice B, negated:
Stiff fines are THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of B trashes the plan, B is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is B.
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by anuprajan5 » Thu Sep 13, 2012 4:41 am
GMATGuruNY wrote:
imskpwr 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 similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
Apply the NEGATION test.
Answer choice B, negated:
Stiff fines are THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of B trashes the plan, B is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is B.

Mitch,

I still do not understand. Why won't reduction of stiff fines not work?

Also why is D not the right option - past due taxes cannot be collected without a reduction in penalties


Regards
Anup
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by anuprajan5 » Thu Sep 13, 2012 4:56 am
Ok, I think I get it - If stiff fines are the only way, then reduction of those fines will not help in getting the corporations to pay up.

And D - The premises state that the tax officials have had considerable success through this initiative. It does not mean that there were no other initiatives.

Regards
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by ranjeet75 » Thu Sep 13, 2012 8:57 am
[quote="GMATGuruNY"][quote="imskpwr"]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

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.[/quote]

Apply the NEGATION test.
Answer choice [spoiler]B[/spoiler], negated:
[i]Stiff fines are THE ONLY WAY to collect past due corporate taxes.[/i]
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of [spoiler]B[/spoiler] trashes the plan, [spoiler]B[/spoiler] is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is [spoiler]B[/spoiler].[/quote]

[b]If we negate D, we get:

"past due taxes can be collected without a reduction in penalties" and again the plan fails. So, why D should not be the answer.[/b]
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by GMATGuruNY » Thu Sep 13, 2012 9:30 am
ranjeet75 wrote: If we negate D, we get:

"past due taxes can be collected without a reduction in penalties" and again the plan fails. So, why D should not be the answer.
That taxes CAN be collected without a reduction in penalties doesn't mean that they CAN'T be collected IN OTHER WAYS.
Thus, when D is negated, it is still entirely possible that THE OTHER WAY proposed by the state officials -- the incentive of reduced penalties -- will persuade delinquent corporations to pay their back taxes.
Since the negation of D does not invalidate the conclusion, D is NOT the necessary assumption.
Last edited by GMATGuruNY on Mon Oct 01, 2012 5:12 am, edited 1 time in total.
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by avik.ch » Thu Sep 13, 2012 11:53 am
GMATGuruNY wrote:
That taxes CAN be collected without a reduction in penalties does mean that they CAN'T be collected IN OTHER WAYS.
Thus, when D is negated, it still entirely possible that THE OTHER WAY proposed by the state officials -- the incentive of reduced penalties -- will persuade delinquent corporations to pay their back taxes.
Since the negation of D does not invalidate the conclusion, D is NOT the necessary assumption.
I think D is a sufficient assumption.

but from the question stem we are not sure what we are looking for : i think its better if it was written as - the argument depends on which of the following assumption
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by imskpwr » Fri Sep 14, 2012 9:20 am
avik.ch wrote:
GMATGuruNY wrote:
That taxes CAN be collected without a reduction in penalties does mean that they CAN'T be collected IN OTHER WAYS.
Thus, when D is negated, it still entirely possible that THE OTHER WAY proposed by the state officials -- the incentive of reduced penalties -- will persuade delinquent corporations to pay their back taxes.
Since the negation of D does not invalidate the conclusion, D is NOT the necessary assumption.
good one.........what you said is correct to distinguish between a Necessary and Sufficient Assumption.......

Thanks!


I think D is a sufficient assumption.

but from the question stem we are not sure what we are looking for : i think its better if it was written as - the argument depends on which of the following assumption
Join the discussion

by tanviet » Sun Sep 30, 2012 11:37 pm
GMATGuruNY wrote:
imskpwr 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 similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
Apply the NEGATION test.
Answer choice B, negated:
Stiff fines are THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of B trashes the plan, B is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is B.
Thank you for the posting.
Normally, I see you prethink an assumption before going to answer choices. Why in this question you do not show the prethinking step.
I do prethinking and find an assumption which is that corporation and individual are similar. Then I go to answer choices but I see no match with the prethinking. in this situation, I apply negation test and realize B.

do you thing that the above steps in my thinking is standard and can applied to many CR questions ? pls advise.
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by umeshpatil » Mon Oct 01, 2012 8:32 am
After the negation of correct assumption, the conclusion drawn must fail.

Negation of "stiff fines are not the only way to collect past due corporate taxes " is
"stiff fines are the only way to collect past due corporate taxes"
=> There are no other way than stiff fines. (but, reducing the penalty is one way exist) That's why this plan fails. So, It is the correct answer.

Is my reasoning correct ?
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by tanviet » Mon Oct 01, 2012 8:10 pm
GMATGuruNY wrote:
imskpwr 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 similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
Apply the NEGATION test.
Answer choice B, negated:
Stiff fines are THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of B trashes the plan, B is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is B.
Mitch Hunt.
thank you very much for posting.
what I want to learn from you is the process you do an assumption question. YOu can do some step unconciously. That is why we can not imitate your doing process and fail.

pls, answer my question is the above posting.
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by GMATGuruNY » Fri Oct 05, 2012 12:39 pm
duongthang wrote:
GMATGuruNY wrote:
imskpwr 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 similar approach in order to collect past due taxes from corporations.

The state tax plan outlined above assumes that

federal tax officials will not attempt to collect back taxes in the same manner

stiff fines are not the only way to collect past due corporate taxes

corporations tend to be delinquent in their taxes for the same length of time that individual taxpayers are

past due taxes cannot be collected without a reduction in penalties

penalties for delinquent corporations will have to be reduced by the same percentage as were penalties for delinquent individuals

Please post with explanation.
Apply the NEGATION test.
Answer choice B, negated:
Stiff fines are THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE the fines WILL NOT WORK.
Since the negation of B trashes the plan, B is the necessary assumption: WHAT MUST BE TRUE for the plan to work.

The correct answer is B.
Thank you for the posting.
Normally, I see you prethink an assumption before going to answer choices. Why in this question you do not show the prethinking step.
I do prethinking and find an assumption which is that corporation and individual are similar. Then I go to answer choices but I see no match with the prethinking. in this situation, I apply negation test and realize B.

do you thing that the above steps in my thinking is standard and can applied to many CR questions ? pls advise.
When a CR proposes a PLAN, it assumes that there is NO PROBLEM WITH THE PLAN.

It is unlikely that we will be able to predict EVERY problem that could prevent a plan from working.
An easier and more efficient approach:

Eliminate answer choices that are clearly outside the scope.
Negate the remaining answer choices.
The negation of the correct answer = a PROBLEM that will prevent the plan from working.

The negation of B gives us just what we need:
STIFF FINES ARE THE ONLY WAY to collect past due corporate taxes.
If stiff fines are THE ONLY WAY to collect past due corporate taxes, then the plan to REDUCE these fines clearly WILL NOT WORK.

The correct answer is B.
Private tutor exclusively for the GMAT and GRE, with over 20 years of experience.
Followed here and elsewhere by over 1900 test-takers.
I have worked with students based in the US, Australia, Taiwan, China, Tajikistan, Kuwait, Saudi Arabia -- a long list of countries.
My students have been admitted to HBS, CBS, Tuck, Yale, Stern, Fuqua -- a long list of top programs.

As a tutor, I don't simply teach you how I would approach problems.
I unlock the best way for YOU to solve problems.

For more information, please email me (Mitch Hunt) at [email protected].
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Student Review #2
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