Question 1

The innocent spouse relief provision from tax liability covers all of the following except

Accepted Answer

A)  improper basis. 
B)  improper deductions. 
C)  improper credits. 
D)  All are understatements subject to minimum thresholds. 
A)  improper basis. 
B)  improper deductions. 
C)  improper credits. 
D)  All are understatements subject to minimum thresholds.

Question 2

Identify which of the following statements is false.

Accepted Answer

A)  A different interest rate is charged to corporate and noncorporate taxpayers. 
B)  In addition to interest, taxpayers may be subject to penalties for failure to file on time and failure to pay taxes by the due date for the return. 
C)  The failure- to- file penalty is levied against taxpayers who do not file a return by its due date at a rate of 5% per month (or fraction of a month) with a maximum additional penalty of 25%. 
D)  The failure- to- pay penalty is imposed at a rate of 5% per month (or fraction of a month) with a maximum penalty of 25%. 
A)  A different interest rate is charged to corporate and noncorporate taxpayers. 
B)  In addition to interest, taxpayers may be subject to penalties for failure to file on time and failure to pay taxes by the due date for the return. 
C)  The failure- to- file penalty is levied against taxpayers who do not file a return by its due date at a rate of 5% per month (or fraction of a month) with a maximum additional penalty of 25%. 
D)  The failure- to- pay penalty is imposed at a rate of 5% per month (or fraction of a month) with a maximum penalty of 25%.

Question 3

Identify which of the following statements is false.

Accepted Answer

A)  The Tax Court can be used to litigate a tax issue without first paying the tax assessment. 
B)  In general, the taxpayer has the burden of proof in Tax Court cases. However, the IRS has the burden of proof for issues raised after the issuance of the 90- day letter. 
C)  A taxpayer may want to avoid using the Tax Court to litigate an issue because decisions from this court cannot be appealed. 
D)  In order to litigate in the Tax Court, a petition must be filed within 90 days of the issuance of a notice of deficiency. 
A)  The Tax Court can be used to litigate a tax issue without first paying the tax assessment. 
B)  In general, the taxpayer has the burden of proof in Tax Court cases. However, the IRS has the burden of proof for issues raised after the issuance of the 90- day letter. 
C)  A taxpayer may want to avoid using the Tax Court to litigate an issue because decisions from this court cannot be appealed. 
D)  In order to litigate in the Tax Court, a petition must be filed within 90 days of the issuance of a notice of deficiency.

Question 4

Identify which of the following statements is false.

Accepted Answer

A)  The fraud penalty can be imposed with respect to income, gift, and estate tax returns. 
B)  If fraud is asserted in a tax transaction, the burden of proof falls on the IRS. 
C)  The government must prove its case "beyond a reasonable doubt" in order for the court or jury to convict a taxpayer of criminal fraud. 
D)  The civil fraud penalty consists of 75% of the tax underpayment attributable to fraud plus 25% of the interest payable on the portion of the underpayment resulting from the fraud. 
A)  The fraud penalty can be imposed with respect to income, gift, and estate tax returns. 
B)  If fraud is asserted in a tax transaction, the burden of proof falls on the IRS. 
C)  The government must prove its case "beyond a reasonable doubt" in order for the court or jury to convict a taxpayer of criminal fraud. 
D)  The civil fraud penalty consists of 75% of the tax underpayment attributable to fraud plus 25% of the interest payable on the portion of the underpayment resulting from the fraud.

Question 5

On July 25 of the following year, Joy files her current calendar- year tax return. She had requested extensions as required. On October 8, she pays the amount due. The tax shown on her return is $22,000. Her current- year withholding tax is $21,000. Joy pays no estimated taxes and does not claim any tax credits on her current- year return. Calculate the penalties that the IRS is likely to assess. Ignore the penalty for underpayment of estimated taxes. Assume she did not commit fraud.

Accepted Answer

If Joy requests an extension, the failur

Question 6

Paul's tax liability for last year was $30,000. Paul projects that his tax for this year will be $40,000. Paul is
self- employed and, thus, will have no withholding. His AGI for last year did not exceed $150,000. How much estimated tax should Paul pay for this year to avoid the penalty for underpayment of estimated taxes?

Accepted Answer

Because Paul's AGI for last ye

Question 7

Latka Novatny gave you the following information to use in the preparation of his current year's tax return: $$\begin{array} { l r } 
\text { Salary } & \$ 120,000 \
\text { Dividends } & 20,000 \
\text { Itemized deductions } & 35,000
\end{array}$$ In addition, he received $40,000 from a relative for whom he had worked previously. You have researched whet
$40,000 should be classified as a gift or compensation and are confident that substantial authority exists for classi as a gift. What tax compliance issues should you consider in deciding whether to report or exclude the $40,000?

Accepted Answer

• Will Latka be liable for a penalty if

Question 8

For innocent spouse relief to apply, five conditions must be met. Explain them.

Accepted Answer

Five conditions must be met:
1) A joint

Question 9

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

Accepted Answer

If the IRS fails to send an individual t

Question 10

Identify which of the following statements is true.

Accepted Answer

A)  Individuals and calendar year- end corporations may obtain six- month extensions for paying taxes and filing their returns for the taxable year by filing the appropriate extension requests. 
B)  A partnership is not required to file a return if the partnership has no income for the year. 
C)  The "automatic" extension period for filing an individual return is five months. 
D)  All of the above are false. 
A)  Individuals and calendar year- end corporations may obtain six- month extensions for paying taxes and filing their returns for the taxable year by filing the appropriate extension requests. 
B)  A partnership is not required to file a return if the partnership has no income for the year. 
C)  The "automatic" extension period for filing an individual return is five months. 
D)  All of the above are false.

Question 11

Which of the following statements regarding Circular 230 is false?

Accepted Answer

A)  Circular 230 applies to all tax return preparers. 
B)  Circular 230 defines practice before the IRS. 
C)  Circular 230 applies to CPAs, enrolled agents, enrolled actuaries, and attorneys. 
D)  Circular 230 provides guidance as to the level of authority necessary for a CPA to take a tax return position. 
A)  Circular 230 applies to all tax return preparers. 
B)  Circular 230 defines practice before the IRS. 
C)  Circular 230 applies to CPAs, enrolled agents, enrolled actuaries, and attorneys. 
D)  Circular 230 provides guidance as to the level of authority necessary for a CPA to take a tax return position.

Question 12

In order to appeal to the Appeals Division, a taxpayer must submit a protest letter to the IRS

Accepted Answer

A)  as a response to receiving a 30- day letter. 
B)  if a TCMP audit is involved. 
C)  if an office audit is involved. 
D)  in a field audit involving an assessment of taxes, interest, and penalties in excess of $25,000. 
A)  as a response to receiving a 30- day letter. 
B)  if a TCMP audit is involved. 
C)  if an office audit is involved. 
D)  in a field audit involving an assessment of taxes, interest, and penalties in excess of $25,000.

Question 13

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

Accepted Answer

The burden of proof is:
Clear

Question 14

The IRS will issue a 90- day letter (a Statutory Notice of Deficiency) if the taxpayer does not file a protest letter within 30 days of the date of the 30- day letter.

Accepted Answer

A) True 
 B)False

Question 15

The maximum failure to file penalty is a total of 25% of the underpayment.

Accepted Answer

A) True 
 B)False

Question 16

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

Accepted Answer

A)  Head of Household 
B)  Child Tax Credit and Earned Income Tax Credit 
C)  Hope and Lifetime Learning Credit 
D)  All of the above 
A)  Head of Household 
B)  Child Tax Credit and Earned Income Tax Credit 
C)  Hope and Lifetime Learning Credit 
D)  All of the above

Question 17

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

Accepted Answer

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

Question 18

Which of the following is not a reason for relief from the substantial understatement penalty?

Accepted Answer

A)  reliance on a tax return preparer 
B)  disclosure of the relevant facts pertaining to the questionable tax return position 
C)  reasonable cause and a good faith effort to comply with the tax law 
D)  substantial authority for the tax return position 
A)  reliance on a tax return preparer 
B)  disclosure of the relevant facts pertaining to the questionable tax return position 
C)  reasonable cause and a good faith effort to comply with the tax law 
D)  substantial authority for the tax return position

Question 19

Explain how the Internal Revenue Service is organized to be efficient and client- oriented.

Accepted Answer

The IRS is organized functionally into f

Question 20

A calendar- year individual taxpayer files last year's income tax return on July 1 of the current year. No extension was requested, and there is not a reasonable cause for the late filing. The return shows a balance due of $800 of tax. The late filing penalty is

Accepted Answer

A)  $120. 
B)  $40. 
C)  $80. 
D)  $0. 
A)  $120. 
B)  $40. 
C)  $80. 
D)  $0.

The innocent spouse relief provision from tax liability covers all of the following except

Identify which of the following statements is false.

Identify which of the following statements is false.

Identify which of the following statements is false.

For innocent spouse relief to apply, five conditions must be met. Explain them.

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

Identify which of the following statements is true.

Which of the following statements regarding Circular 230 is false?

In order to appeal to the Appeals Division, a taxpayer must submit a protest letter to the IRS

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

The IRS will issue a 90- day letter (a Statutory Notice of Deficiency) if the taxpayer does not file a protest letter within 30 days of the date of the 30- day letter.

The maximum failure to file penalty is a total of 25% of the underpayment.

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

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

Which of the following is not a reason for relief from the substantial understatement penalty?

Explain how the Internal Revenue Service is organized to be efficient and client- oriented.

A calendar- year individual taxpayer files last year's income tax return on July 1 of the current year. No extension was requested, and there is not a reasonable cause for the late filing. The return shows a balance due of $800 of tax. The late filing penalty is

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

U.S. Taxation of Foreign-Related Transactions

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Exam 15: Administrative Procedures

The innocent spouse relief provision from tax liability covers all of the following except

Identify which of the following statements is false.

Identify which of the following statements is false.

Identify which of the following statements is false.

For innocent spouse relief to apply, five conditions must be met. Explain them.

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

Identify which of the following statements is true.

Which of the following statements regarding Circular 230 is false?

In order to appeal to the Appeals Division, a taxpayer must submit a protest letter to the IRS

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

The IRS will issue a 90- day letter (a Statutory Notice of Deficiency) if the taxpayer does not file a protest letter within 30 days of the date of the 30- day letter.

The maximum failure to file penalty is a total of 25% of the underpayment.

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

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

Which of the following is not a reason for relief from the substantial understatement penalty?

Explain how the Internal Revenue Service is organized to be efficient and client- oriented.

A calendar- year individual taxpayer files last year's income tax return on July 1 of the current year. No extension was requested, and there is not a reasonable cause for the late filing. The return shows a balance due of $800 of tax. The late filing penalty is

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

U.S. Taxation of Foreign-Related Transactions

Filters