Question 1

Which of the following has the highest authoritative weight?

Accepted Answer

A) Legislative regulation. 
B) Private letter ruling. 
C) Revenue ruling. 
D) Action on decision. 
E) Revenue procedure. 
A) Legislative regulation. 
B) Private letter ruling. 
C) Revenue ruling. 
D) Action on decision. 
E) Revenue procedure.

Question 2

For fraudulent tax returns,the statute of limitations for IRS assessment is 10 years.

Accepted Answer

A) True 
 B)False

Question 3

Dan received a letter from the IRS that gave him the choice of (1)requesting a conference with an appeals officer or (2)agreeing to a proposed tax adjustment.Dan received the:

Accepted Answer

A) 30-day letter. 
B) 90-day letter. 
C) Appeals letter. 
D) Tax adjustment letter. 
E) None of the choices are correct. 
A) 30-day letter. 
B) 90-day letter. 
C) Appeals letter. 
D) Tax adjustment letter. 
E) None of the choices are correct.

Question 4

Which of the following audits is the least common,broadest in scope,and typically most complex?

Accepted Answer

A) Correspondence. 
B) Targeted. 
C) Office. 
D) Field. 
E) None of the choices are correct. 
A) Correspondence. 
B) Targeted. 
C) Office. 
D) Field. 
E) None of the choices are correct.

Question 5

A tax practitioner can avoid IRS penalty relating to a tax return position:

Accepted Answer

A) only if the position has a more likely than not chance of being sustained by the IRS or courts. 
B) if the position has a realistic possibility of being sustained by the IRS or courts. 
C) if there is not substantial authority to support the position. 
D) if the position has a reasonable basis and is disclosed on the tax return. 
E) None of the choices are correct. 
A) only if the position has a more likely than not chance of being sustained by the IRS or courts. 
B) if the position has a realistic possibility of being sustained by the IRS or courts. 
C) if there is not substantial authority to support the position. 
D) if the position has a reasonable basis and is disclosed on the tax return. 
E) None of the choices are correct.

Question 6

Hong,an introductory tax student,is beginning his first research project.He has a complete understanding of the relevant facts for his project and has identified the initial research questions.He is now ready to begin using a tax service to identify relevant authorities.What are some suggestions for him on how to use tax services to identify relevant authorities?

Accepted Answer

A novice may conduct a keyword search in

Question 7

If April 15th falls on a Saturday,the due date for individual tax returns will be on Monday,April 17th (assuming it is not a holiday).

Accepted Answer

A) True 
 B)False

Question 8

Campbell was researching a tax issue and found a favorable tax court opinion and an IRC Code Section that appear to answer the question.Is she finished with the research process? If so,why? If not,what must she do?

Accepted Answer

Campbell is not finished.Once the tax re

Question 9

Josephine is considering taking a six-month rotation in Paris for her job.Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

Accepted Answer

A) Determination letter. 
B) Private letter ruling. 
C) Tax treaty. 
D) Regulation. 
E) Revenue procedure. 
A) Determination letter. 
B) Private letter ruling. 
C) Tax treaty. 
D) Regulation. 
E) Revenue procedure.

Question 10

Mary Ann is working on a pretty big research project.Her manager has alerted her to the possibility that some of her research questions are likely to be questions of fact,whereas others are likely to be questions of law.Explain the difference between the two types of questions and how this would influence her research.

Accepted Answer

Two basic types of issues that researche

Question 11

In a planning context,

Accepted Answer

A) closed facts are preferred to open facts. 
B) new facts are preferred to old facts. 
C) old facts are preferred to new facts. 
D) open facts are preferred to closed facts. 
E) None of the choices are correct. 
A) closed facts are preferred to open facts. 
B) new facts are preferred to old facts. 
C) old facts are preferred to new facts. 
D) open facts are preferred to closed facts. 
E) None of the choices are correct.

Question 12

If a taxpayer has little cash and a very technical tax case about which she feels very strongly that the tax rules are "on her side," she should prefer to have her case tried in the U.S.Tax Court.

Accepted Answer

A) True 
 B)False

Question 13

Which types of penalties are only imposed after normal due process including a trial?

Accepted Answer

A) criminal penalties. 
B) civil penalties. 
C) criminal and civil penalties. 
D) Failure-to-file penalty. 
E) None of the choices are correct. 
A) criminal penalties. 
B) civil penalties. 
C) criminal and civil penalties. 
D) Failure-to-file penalty. 
E) None of the choices are correct.

Question 14

Roddy was researching an issue and found a favorable tax court decision that addresses his issue.He also determined that there was a nonacquiescence for the case.Who issued the nonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Accepted Answer

Except for Supreme Court cases,whenever

Question 15

Proposed and temporary regulations have the same authoritative weight.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a source of a tax practitioner's professional responsibilities?

Accepted Answer

A) AICPA Code of Professional Conduct. 
B) Statements on Standards for Tax Services. 
C) Circular 230. 
D) State board of accountancy statutes. 
E) None of the choices are correct. 
A) AICPA Code of Professional Conduct. 
B) Statements on Standards for Tax Services. 
C) Circular 230. 
D) State board of accountancy statutes. 
E) None of the choices are correct.

Question 17

Which of the following audits is the most common and typically less comprehensive?

Accepted Answer

A) Correspondence. 
B) Random. 
C) Office. 
D) Field. 
E) None of the choices are correct. 
A) Correspondence. 
B) Random. 
C) Office. 
D) Field. 
E) None of the choices are correct.

Question 18

For the following tax returns,identify the method the IRS likely used to select the return for audit.
a.Dan made a mistake in adding his income on his tax return.
b.Juanita failed to report her salary from her second job on her tax return.
c.Michael and Venita deducted a relatively large amount of travel expenses on their tax return for their business.The travel expense is large relative to other taxpayers in similar businesses with similar levels of income.
d.Paul and Melissa recently went through a very nasty divorce.One of the issues was Paul's less than forthright accounting of his income in determining the appropriate level of alimony.

Accepted Answer

(a)Document perfecti

Question 19

Rowanda could not settle her tax dispute with the IRS at the appeals conference.If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency,Rowanda should litigate in the:

Accepted Answer

A) U)S.District Court. 
B) U)S.Circuit Court of Appeals. 
C) U)S.Court of Federal Claims. 
D) Tax Court. 
E) None of the choices are correct. 
A) U)S.District Court. 
B) U)S.Circuit Court of Appeals. 
C) U)S.Court of Federal Claims. 
D) Tax Court. 
E) None of the choices are correct.

Question 20

Corporations are required to file a tax return annually regardless of their taxable income.

Accepted Answer

A) True 
 B)False

Exam 2: Tax Compliance,the Irs,and Tax Authorities

Which of the following has the highest authoritative weight?

For fraudulent tax returns,the statute of limitations for IRS assessment is 10 years.

Dan received a letter from the IRS that gave him the choice of (1)requesting a conference with an appeals officer or (2)agreeing to a proposed tax adjustment.Dan received the:

Which of the following audits is the least common,broadest in scope,and typically most complex?

A tax practitioner can avoid IRS penalty relating to a tax return position:

If April 15th falls on a Saturday,the due date for individual tax returns will be on Monday,April 17th (assuming it is not a holiday).

Campbell was researching a tax issue and found a favorable tax court opinion and an IRC Code Section that appear to answer the question.Is she finished with the research process? If so,why? If not,what must she do?

Josephine is considering taking a six-month rotation in Paris for her job.Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

In a planning context,

If a taxpayer has little cash and a very technical tax case about which she feels very strongly that the tax rules are "on her side," she should prefer to have her case tried in the U.S.Tax Court.

Which types of penalties are only imposed after normal due process including a trial?

Roddy was researching an issue and found a favorable tax court decision that addresses his issue.He also determined that there was a nonacquiescence for the case.Who issued the nonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Proposed and temporary regulations have the same authoritative weight.

Which of the following is not a source of a tax practitioner's professional responsibilities?

Which of the following audits is the most common and typically less comprehensive?

Rowanda could not settle her tax dispute with the IRS at the appeals conference.If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency,Rowanda should litigate in the:

Corporations are required to file a tax return annually regardless of their taxable income.

An Introduction to Tax

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

If April 15^th falls on a Saturday,the due date for individual tax returns will be on Monday,April 17^th (assuming it is not a holiday).