Question 1

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

Accepted Answer

A)  The return contains an understatement of tax attributable to the erroneous item(s) of an individual filing it. 
B)  The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C)  The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D)  Based on all the facts and circumstances, holding the other individual for the deficiency would be inequitable. 
A)  The return contains an understatement of tax attributable to the erroneous item(s) of an individual filing it. 
B)  The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C)  The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D)  Based on all the facts and circumstances, holding the other individual for the deficiency would be inequitable.

Question 2

Which one of the following statements about letter rulings is false?

Accepted Answer

A)  If a taxpayer requests and pays for a ruling, the IRS must respond to his request by issuing a ruling. 
B)  A ruling is a response to a taxpayer's specific set of facts. 
C)  Rulings become public information. 
D)  The IRS issues revenue procedures periodically, which prescribe the information that must be supplied with a ruling request. 
A)  If a taxpayer requests and pays for a ruling, the IRS must respond to his request by issuing a ruling. 
B)  A ruling is a response to a taxpayer's specific set of facts. 
C)  Rulings become public information. 
D)  The IRS issues revenue procedures periodically, which prescribe the information that must be supplied with a ruling request.

Question 3

What is the difference between the burden of proof for civil and criminal fraud?

Accepted Answer

The burden of proof is:
Clear

Question 4

The Internal Revenue Service is part of the

Accepted Answer

A)  Congress. 
B)  Treasury Department. 
C)  Federal Bureau of Investigation. 
D)  U.S. Customs Department. 
A)  Congress. 
B)  Treasury Department. 
C)  Federal Bureau of Investigation. 
D)  U.S. Customs Department.

Question 5

Identify which of the following statements is true.

Accepted Answer

A)  Form 870-AD is used if the taxpayer and IRS representative agree to a lesser tax liability than that originally proposed by the Service. 
B)  Signing of Form 870-AD by the taxpayer does not generally preclude the subsequent filing of a refund claim. 
C)  The IRS will issue a 90-day letter (a Statutory Notice of Deficiency) if the taxpayer does not file a protest letter within 10 days of the date of the 30-day letter. 
D)  All of the above are false. 
A)  Form 870-AD is used if the taxpayer and IRS representative agree to a lesser tax liability than that originally proposed by the Service. 
B)  Signing of Form 870-AD by the taxpayer does not generally preclude the subsequent filing of a refund claim. 
C)  The IRS will issue a 90-day letter (a Statutory Notice of Deficiency) if the taxpayer does not file a protest letter within 10 days of the date of the 30-day letter. 
D)  All of the above are false.

Question 6

Identify which of the following statements is true.

Accepted Answer

A)  The 90-day letter offers the taxpayer the choice of paying the tax assessed or filing a petition refuting the tax assessment with the Tax Court. 
B)  A taxpayer can choose to initiate tax litigation in a U.S. district court, the Tax Court, or a Court of Appeals. 
C)  The IRS cannot raise a new tax issue after issuance of the Statutory Notice of Deficiency (90-day letter). 
D)  All of the above are false. 
A)  The 90-day letter offers the taxpayer the choice of paying the tax assessed or filing a petition refuting the tax assessment with the Tax Court. 
B)  A taxpayer can choose to initiate tax litigation in a U.S. district court, the Tax Court, or a Court of Appeals. 
C)  The IRS cannot raise a new tax issue after issuance of the Statutory Notice of Deficiency (90-day letter). 
D)  All of the above are false.

Question 7

The "automatic" extension period for filing an individual return is seven months.

Accepted Answer

A) True 
 B)False

Question 8

If a return's due date is extended, a taxpayer

Accepted Answer

A)  also extends the period in which to pay taxes without interest. 
B)  still should pay the tax by the original return due date. 
C)  has 30 days following the original due date to pay estimated taxes without penalty. 
D)  has 30 days following the original due date to pay estimated taxes without interest. 
A)  also extends the period in which to pay taxes without interest. 
B)  still should pay the tax by the original return due date. 
C)  has 30 days following the original due date to pay estimated taxes without penalty. 
D)  has 30 days following the original due date to pay estimated taxes without interest.

Question 9

Richard recently won a popular television reality show and its one million dollar prize. However, he omitted the prize money from his tax return for the year. What penalties can the IRS assess?

Accepted Answer

• Criminal or civil fraud
• Negligence o

Question 10

Kristina and Victor filed a joint return for the current year. They are in the 31% marginal tax bracket. Victor did not know that Kristina failed to report a prize valued at $16,000 that she won. She used the money to buy Victor a motorcycle. Does Victor meet the tests for relief under the innocent spouse provisions?

Accepted Answer

Probably not. Although (1) Victor and Kr

Question 11

Which of the following communications between an accountant and client are privileged?
a) During the preparation of her 2018 tax return, Tammy informs her accountant that she contributed $25,000 to a qualified charitable organization.
b) After filing his tax return, a client mentions to his accountant that he forgot to report a $7,000 prize that he won playing bingo. He asks how he should correct the error.
c) A client tells his accountant that he will no longer pay alimony to his ex-wife.

Accepted Answer

Only communication (b) is privileged bec

Question 12

Pablo, a bachelor, owes $80,000 of additional taxes, all due to fraud. What is the amount of the civil fraud penalty? What criminal fraud penalty might be imposed under Sec. 7201?

Accepted Answer

a) The civil fraud penalty is

Question 13

Identify which of the following statements is false.

Accepted Answer

A)  Interest is imposed on any tax not paid by the due date of the return (determined without regard to extensions). 
B)  Interest is charged on underpayments, or paid on overpayments, at a rate of three percentage points higher than the federal short-term rate. 
C)  Interest on underpayments is calculated using daily compounding and covers a time period from the original due date of the return until the date of payment. 
D)  Any tax not paid by the due date for the return is subject to an interest charge. 
A)  Interest is imposed on any tax not paid by the due date of the return (determined without regard to extensions). 
B)  Interest is charged on underpayments, or paid on overpayments, at a rate of three percentage points higher than the federal short-term rate. 
C)  Interest on underpayments is calculated using daily compounding and covers a time period from the original due date of the return until the date of payment. 
D)  Any tax not paid by the due date for the return is subject to an interest charge.

Question 14

The IRS audits Kiara's current-year individual return and determines that, among other errors, she negligently did not report dividend income of $10,000. The deficiency with respect to the dividends is $2,800. The IRS argues for an additional $12,000 deficiency for various other errors that do not involve negligence. What is Kiara's negligence penalty for the $14,800 in deficiencies?

Accepted Answer

The neglig

Question 15

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

Accepted Answer

A taxpayer should initially look to prim

Question 16

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

Accepted Answer

A)  TCMP. 
B)  DIF program. 
C)  instant audit program. 
D)  1040 program. 
A)  TCMP. 
B)  DIF program. 
C)  instant audit program. 
D)  1040 program.

Question 17

Explain accountant-client privilege. What are the similarities and differences between it and attorney-client privilege?

Accepted Answer

According to judicial doctrine, certain

Question 18

On April 15, 2018, a married couple filed their joint 2017 tax return showing gross income of $120,000. Their return was prepared by a professional tax preparer who mistakenly omitted $45,000 of income, which the preparer in good faith considered to be nontaxable. No information with regard to this omitted income was disclosed on the return or attached statements. By what date must the IRS assert a notice of deficiency before the statute of limitations expires?

Accepted Answer

A)  April 15, 2024 
B)  December 31, 2018 
C)  April 15, 2021 
D)  December 31, 2024 
A)  April 15, 2024 
B)  December 31, 2018 
C)  April 15, 2021 
D)  December 31, 2024

Question 19

Steve files his return on April 1 and pays the entire amount of tax for the year at that time, $5,000. He is audited and pays the deficiency of $1,500 two years later. The maximum amount Steve may file a claim for refund for eighteen months later is

Accepted Answer

A)  $6,500. 
B)  $5,000. 
C)  $1,500. 
D)  some other amount. 
A)  $6,500. 
B)  $5,000. 
C)  $1,500. 
D)  some other amount.

Question 20

How long does a taxpayer have to file a petition with the U.S. Tax Court following the date of the Statutory Notice of Deficiency?

Accepted Answer

A)  90 days 
B)  three months 
C)  180 days 
D)  30 days 
A)  90 days 
B)  three months 
C)  180 days 
D)  30 days

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

Which one of the following statements about letter rulings is false?

What is the difference between the burden of proof for civil and criminal fraud?

The Internal Revenue Service is part of the

Identify which of the following statements is true.

Identify which of the following statements is true.

The "automatic" extension period for filing an individual return is seven months.

If a return's due date is extended, a taxpayer

Richard recently won a popular television reality show and its one million dollar prize. However, he omitted the prize money from his tax return for the year. What penalties can the IRS assess?

Pablo, a bachelor, owes $80,000 of additional taxes, all due to fraud. What is the amount of the civil fraud penalty? What criminal fraud penalty might be imposed under Sec. 7201?

Identify which of the following statements is false.

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

Explain accountant-client privilege. What are the similarities and differences between it and attorney-client privilege?

Steve files his return on April 1 and pays the entire amount of tax for the year at that time, $5,000. He is audited and pays the deficiency of $1,500 two years later. The maximum amount Steve may file a claim for refund for eighteen months later is

How long does a taxpayer have to file a petition with the U.S. Tax Court following the date of the Statutory Notice of Deficiency?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Us Taxation of Foreign-Related Transactions

Filters

Exam 15: Administrative Procedures

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

Which one of the following statements about letter rulings is false?

What is the difference between the burden of proof for civil and criminal fraud?

The Internal Revenue Service is part of the

Identify which of the following statements is true.

Identify which of the following statements is true.

The "automatic" extension period for filing an individual return is seven months.

If a return's due date is extended, a taxpayer

Richard recently won a popular television reality show and its one million dollar prize. However, he omitted the prize money from his tax return for the year. What penalties can the IRS assess?

Pablo, a bachelor, owes $80,000 of additional taxes, all due to fraud. What is the amount of the civil fraud penalty? What criminal fraud penalty might be imposed under Sec. 7201?

Identify which of the following statements is false.

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

Explain accountant-client privilege. What are the similarities and differences between it and attorney-client privilege?

Steve files his return on April 1 and pays the entire amount of tax for the year at that time, $5,000. He is audited and pays the deficiency of $1,500 two years later. The maximum amount Steve may file a claim for refund for eighteen months later is

How long does a taxpayer have to file a petition with the U.S. Tax Court following the date of the Statutory Notice of Deficiency?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Us Taxation of Foreign-Related Transactions

Filters