A person who knowingly makes a false claim to the government may be subject to:

• A. Only a warning letter from the government
• B. A reduction in future tax rates
• C. No consequences if the claim is not paid
• D. Criminal and civil penalties for fraud

Answer: (D)

Verified step by step guidance

1. Understand the context of the problem: The question pertains to the consequences of knowingly making a false claim to the government, which is a legal and ethical issue tied to fraud in financial accounting.
2. Clarify the concept of fraud: Fraud involves intentional deception to secure unfair or unlawful gain. In financial accounting, this can include falsifying records, misrepresenting financial information, or making false claims.
3. Identify the consequences of fraud: Fraudulent actions, especially those involving the government, can lead to both criminal and civil penalties. Criminal penalties may include fines or imprisonment, while civil penalties may involve monetary damages or restitution.
4. Eliminate incorrect options: Review the provided choices and rule out options that do not align with the legal and ethical consequences of fraud. For example, 'Only a warning letter' and 'A reduction in future tax rates' are not appropriate consequences for fraud.
5. Select the correct answer: Based on the understanding of fraud and its consequences, the correct answer is 'Criminal and civil penalties for fraud.' This reflects the seriousness of knowingly making a false claim to the government.