Question 1

Which of the following is the calculation of the failure-to-file penalties?

Accepted Answer

A) Half of 1 percent 0.5 percent)of the tax due for each month late,limited to 25 percent of the taxes due 
B) 5 percent of the tax due for each quarter late,limited to 25 percent of the taxes due 
C) 5 percent of the tax due for each month or part of the month that it is late,limited to 25 percent of the taxes due 
D) 20 percent of the tax due 
E) 5 percent of the tax due 
A) Half of 1 percent 0.5 percent)of the tax due for each month late,limited to 25 percent of the taxes due 
B) 5 percent of the tax due for each quarter late,limited to 25 percent of the taxes due 
C) 5 percent of the tax due for each month or part of the month that it is late,limited to 25 percent of the taxes due 
D) 20 percent of the tax due 
E) 5 percent of the tax due

Question 2

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is false regarding the return audit process?

Accepted Answer

A) The higher DIF score a return gets,the higher the likelihood for audit. 
B) An office audit is performed at an IRS office. 
C) 50 percent of taxpayers are audited every year. 
D) None of the above is false. 
A) The higher DIF score a return gets,the higher the likelihood for audit. 
B) An office audit is performed at an IRS office. 
C) 50 percent of taxpayers are audited every year. 
D) None of the above is false.

Question 5

Tax penalties are not deductible by taxpayers.

Accepted Answer

A) True 
 B)False

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

Mike deducts a bad debt on his 2013 tax return.How many years is the statute of limitations for the bad debt deduction?

Accepted Answer

A) 7 years 
B) 3 years 
C) No limit 
D) 6 years 
E) Zero 
A) 7 years 
B) 3 years 
C) No limit 
D) 6 years 
E) Zero

Question 8

A taxpayer with an average tax rate of 20 percent who receives additional income of $20,000 will pay additional taxes of $4,000.

Accepted Answer

A) True 
 B)False

Question 9

At which of the following IRS locations are tax returns processed?

Accepted Answer

A) Regional offices 
B) IRS Campus Processing Sites 
C) Local offices 
D) National office 
E) None of the above 
A) Regional offices 
B) IRS Campus Processing Sites 
C) Local offices 
D) National office 
E) None of the above

Question 10

A commercial tax preparer must be an enrolled agent.

Accepted Answer

A) True 
 B)False

Which of the following is the calculation of the failure-to-file penalties?

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

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

Which of the following is false regarding the return audit process?

Tax penalties are not deductible by taxpayers.

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.

Mike deducts a bad debt on his 2013 tax return.How many years is the statute of limitations for the bad debt deduction?

A taxpayer with an average tax rate of 20 percent who receives additional income of $20,000 will pay additional taxes of $4,000.

At which of the following IRS locations are tax returns processed?

A commercial tax preparer must be an enrolled agent.

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

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Exam 12: Tax Administration and Tax Planning

Which of the following is the calculation of the failure-to-file penalties?

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

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

Which of the following is false regarding the return audit process?

Tax penalties are not deductible by taxpayers.

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.

Mike deducts a bad debt on his 2013 tax return.How many years is the statute of limitations for the bad debt deduction?

A taxpayer with an average tax rate of 20 percent who receives additional income of $20,000 will pay additional taxes of $4,000.

At which of the following IRS locations are tax returns processed?

A commercial tax preparer must be an enrolled agent.

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