According to the Internal Revenue Service, income tax return…
According to the Internal Revenue Service, income tax returns in a recent year averaged $911 in refunds for taxpayers. One explanation for this is that taxpayers would rather have the government keep back too much money during the year than owe it money at the end of the year. Suppose the average amount of tax at the end of a year is a refund of $911, with a standard deviation of $525. Assume that amounts owed or due on tax returns are normally distributed. What proportion of the tax returns show that the taxpayer owes money to the government?
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