Exam 15: Administrative Procedures

Identify which of the following statements is false.

Billy, a calendar- year taxpayer, files his current year individual tax return on August 17 of the following year without having requested an extension. His return reports an amount due of $5,000. Billy pays this amount on November 23 of the following year. What are Billy's penalties for his failure to file and his failure to pay his tax on time? Assume Billy did not commit fraud.

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

Identify which of the following statements is true.

The 90- day letter (Statutory Notice of Deficiency) gives the taxpayer 90 days to file a petition with the Tax Court or to pay the disputed tax.

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.

Christie and Billy jointly file this year. Billy intentionally omits $5,000 in gambling winnings. Christie fraudulently deducts $1,000 in business expenses. The IRS audits the return, assesses a $2,500 deficiency and begins collection efforts two years after the timely filing of the return. Christie and Billy divorced one year before the deficiency was assessed. Can Christie receive any tax relief from the full $2,500 deficiency?

The majority of the individual tax returns that are audited are selected under the DIF program.

A letter ruling is a written determination that interprets and applies the tax laws to the taxpayer's specific set of facts.

Identify which of the following statements is false.

If the taxpayer has credible evidence, the IRS bears the burden of proof in a tax dispute.

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

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

Which of the following items can be omitted from a taxpayer's request for a ruling?

Identify which of the following statements is false.

The IRS provides advice concerning an issue that arises during an audit by issuing

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

What is the IRS guideline for determining whether a tax return position has substantial authority?

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?