Exam 12: Tax Administration and Tax Planning

Indicate in the blank space the date the statute of limitations would run out on each of the following individual tax returns. a. A 2015 tax return filed on April 15, 2016 which omitted $20,000 of income.The total gross income shown on the tax return was $40,000 b.A 2015 tax return filed April 15, 2016 which contained a large bad debt deduction c.A 2001 tax return that was never filed d.A 2015 tax return filed on April 15, 2016 e.A fraudulent 2015 tax return filed April 15, 2016

(Essay)

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Question 21

A taxpayer made estimated tax payments in excess of the tax due for the year, but failed to file a tax return. Since the taxes were paid in full, would there be a penalty?

(Essay)

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Question 22

What type of audit (office, field or correspondence) is demonstrated in the following examples? a.An IRS agent views Microsoft's books and records at the Microsoft headquarters. b.Susie receives a letter from the IRS asking her to provide documentation to support her charitable contributions on her tax return filed in the prior year. c.Mr.and Mrs.John Doe are asked to bring their supporting documents to the downtown IRS office so that an IRS agent may review their tax return which was filed 2 years ago.

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Question 23

Tax penalties are not deductible by taxpayers.

(True/False)

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Question 24

Answer the following: a. Geoffrey filed his tax return 2 months and 8 days late and had not requested an extension of time for filing.Geoffrey's return indicated that he is to receive a $600 refund in taxes.Calculate the amount of Geoffrey's penalty for failure to file his tax return on time, assuming the failure to file was not fraudulent. b. John filed his individual income tax return 3 1/2 months after it was due.He had not requested an extension of time for filing.Along with his return, John remitted a check for $1,000, which was the balance of the taxes he owed with his return.Disregarding interest, calculate the total penalty that John will be required to pay, assuming the failure to file was not fraudulent (and that he is not subject to failure-to-pay penalties).

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Question 25

For the following independent situations, list who (the IRS, the taxpayer, the party who initiates the case, or both sides) has the burden of proof in most civil tax cases: a.The tax case involves a penalty. b.The tax case involves a trust with net worth of $8.3 million. c.The taxpayer has credible evidence, maintains records, and cooperates with reasonable IRS requests. d.The IRS uses statistics to reconstruct an individual's income.

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Question 26

For each of the following situations, indicate the nature and amount of the penalty that could be imposed. (The penalties include both tax practitioner penalties and taxpayer penalties).

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Question 27

Craig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be?

(Multiple Choice)

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Question 28

Tax returns are processed at the IRS national office in Washington, D.C.

(True/False)

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Question 29

Which of the following is the most common type of audit for an individual taxpayer?

(Multiple Choice)

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Question 30

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

(True/False)

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Question 31

Which of the following is not a possible result of an audit by the IRS?

(Multiple Choice)

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Question 32

What is the difference between tax avoidance and tax evasion?

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Question 33

The Wage and Investment Office of the IRS handles small business taxpayers.

(True/False)

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Question 34

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

(True/False)

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Question 35

An "office audit" is an audit in which the revenue agent visits the taxpayer's office.

(True/False)

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Question 36

The statute of limitations for a tax return generally is 3 years.

(True/False)

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Question 37

In the following independent situations, is it better to make an installment agreement with the IRS, an offer in compromise with the IRS, or ask for an extension of time to pay any taxes owed? a.A taxpayer is unlikely to pay the tax amount they owe. b.Using monthly payments, a taxpayer can afford to pay off the tax owed within 2 years. c.A taxpayer can pay off their tax owed when they sell their boat which is up for sale.

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Question 38

A tax preparer may be subject to a penalty for failing to provide a copy of the taxpayer's tax return to the client.

(True/False)

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Question 39

Tax returns selected for most audits are selected by the Discriminant Function System.

(True/False)

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Question 40

Showing 21 - 40 of 67

A taxpayer made estimated tax payments in excess of the tax due for the year, but failed to file a tax return. Since the taxes were paid in full, would there be a penalty?

Tax penalties are not deductible by taxpayers.

For each of the following situations, indicate the nature and amount of the penalty that could be imposed. (The penalties include both tax practitioner penalties and taxpayer penalties).

Craig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be?

Tax returns are processed at the IRS national office in Washington, D.C.

Which of the following is the most common type of audit for an individual taxpayer?

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

Which of the following is not a possible result of an audit by the IRS?

What is the difference between tax avoidance and tax evasion?

The Wage and Investment Office of the IRS handles small business taxpayers.

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

An "office audit" is an audit in which the revenue agent visits the taxpayer's office.

The statute of limitations for a tax return generally is 3 years.

A tax preparer may be subject to a penalty for failing to provide a copy of the taxpayer's tax return to the client.

Tax returns selected for most audits are selected by the Discriminant Function System.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Filters

Exam 12: Tax Administration and Tax Planning

A taxpayer made estimated tax payments in excess of the tax due for the year, but failed to file a tax return. Since the taxes were paid in full, would there be a penalty?

Tax penalties are not deductible by taxpayers.

For each of the following situations, indicate the nature and amount of the penalty that could be imposed. (The penalties include both tax practitioner penalties and taxpayer penalties). ​

Craig commits fraud on his tax return. It is found that he was $40,000 deficient in his tax because of the fraud. What would his penalty be?

Tax returns are processed at the IRS national office in Washington, D.C.

Which of the following is the most common type of audit for an individual taxpayer?

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

Which of the following is not a possible result of an audit by the IRS?

What is the difference between tax avoidance and tax evasion?

The Wage and Investment Office of the IRS handles small business taxpayers.

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

An "office audit" is an audit in which the revenue agent visits the taxpayer's office.

The statute of limitations for a tax return generally is 3 years.

A tax preparer may be subject to a penalty for failing to provide a copy of the taxpayer's tax return to the client.

Tax returns selected for most audits are selected by the Discriminant Function System.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Filters

For each of the following situations, indicate the nature and amount of the penalty that could be imposed. (The penalties include both tax practitioner penalties and taxpayer penalties).