Exam 18: The Tax Compliance Process

Mr.and Mrs.Latt use a fiscal year ending October 31 as the taxable year for filing their joint Form 1040. a.What is the last date on which the Latts can apply for an automatic extension of time to file their return for fiscal year ending October 31,2019? b.Assuming that the Latts make a timely application,what is the extended due date for the return?

Mr.Hepp,a self-employed consultant,failed to include a $38,200 income item on his 2018 Form 1040,which he filed on March 9,2019.The gross income reported on the return was $102,380.What is the latest date that the IRS can assess any additional 2018 tax?

The fact that a taxpayer receives a refund check indicates that the IRS is satisfied with the accuracy of the taxpayer's return.

A taxpayer who wants a jury trial must pay the tax deficiency and then sue the government for a refund in U.S.District Court.

Which of the following statements about a tax deficiency is true?

Macy filed her 2018 tax return on its extended due date of October 15,2019.The IRS has until December 31,2021,to audit this return.

Which of the following statements about the DIF score is true?

Which of the following should increase the likelihood that Mr.and Mrs.McNut's Form 1040 will be selected for audit by the IRS?

If the IRS assesses additional tax against a corporation after it has liquidated,the shareholders can't be held liable for the tax due.

Only attorneys,enrolled agents,and CPAs may prepare tax returns for compensation.

Mrs.Jordan applied for an automatic six-month extension of time (until October 15,2019)to file her 2018 income tax return.She actually filed an accurate return on July 9,2019.The IRS may audit the return and assess Mrs.Jordan for additional 2018 tax at any time through:

Taxpayers should keep all supporting documentation (credit card statements,etc.)for a tax return for at least three years after the return is filed.

A person can't be relieved of liability for a tax deficiency under the innocent spouse rule unless that person was forced to sign the tax return under duress.

The Taxpayer's Bill of Rights prevents the IRS from seizing a taxpayer's assets to satisfy a tax deficiency.

An individual taxpayer is not required to give the IRS an explanation for extending the filing date for Form 1040.

Which of the following should increase the likelihood that Mr.Clarke's Form 1040 will be selected for audit by the IRS?

Which type of audit can be handled entirely by telephone or through the mail?

Which of the following statements about the tax deficiency appeals process is false?

An individual who didn't graduate from high school has less exposure to a negligence penalty from the IRS than a college graduate.

Tony Curtis filed her 2018 income tax return on May 2,2019.Which of the following statements is false?