Question 1

For which of the following tax violations is a civil penalty not imposed on taxpayers?

Accepted Answer

A) failure to file a tax return. 
B) failure to pay tax owed. 
C) fraud. 
D) failure to make estimated tax payments. 
E) None of the choices are correct. 
A) failure to file a tax return. 
B) failure to pay tax owed. 
C) fraud. 
D) failure to make estimated tax payments. 
E) None of the choices are correct.

Question 2

Lavonda discovered that the 5th Circuit (where Lavonda resides)has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS.Lavonda should choose which of the following trial courts to hear her case:

Accepted Answer

A) Tax Court only. 
B) U)S.Court of Federal Claims only. 
C) U)S.District Court only. 
D) Tax Court or the U.S.District Court. 
E) Tax Court or the U.S.Court of Federal Claims. 
A) Tax Court only. 
B) U)S.Court of Federal Claims only. 
C) U)S.District Court only. 
D) Tax Court or the U.S.District Court. 
E) Tax Court or the U.S.Court of Federal Claims.

Question 3

A taxpayer can avoid a substantial understatement of tax penalty:

Accepted Answer

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

Question 4

Closed facts are especially conducive to tax planning.

Accepted Answer

A) True 
 B)False

Question 5

Kim has decided to litigate a tax issue with the IRS.Describe the trial - level courts that Kim may use to litigate the case.

Accepted Answer

There are three trial - level courts tha

Question 6

In general,a CPA will satisfy his professional responsibilities under the Statements on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority.

Accepted Answer

A) True 
 B)False

Question 7

The Internal Revenue Code of 1986 is the name of the current income tax code of the United States of America.

Accepted Answer

A) True 
 B)False

Question 8

Greg earned $25,500 this year and had $1,500 of federal income taxes withheld from his salary.Assuming that Greg is single,25 years old,and will have a total tax liability of $1,402 (and thus will receive a $98 refund),he:

Accepted Answer

A) is required to file a tax return. 
B) is not required to file a tax return but should file a return anyway. 
C) is required to file a tax return but should not file because he owes no tax. 
D) is not required to file a tax return and should not file a return. 
E) None of the choices are correct. 
A) is required to file a tax return. 
B) is not required to file a tax return but should file a return anyway. 
C) is required to file a tax return but should not file because he owes no tax. 
D) is not required to file a tax return and should not file a return. 
E) None of the choices are correct.

Question 9

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

Accepted Answer

A) is potentially subject to criminal penalties. 
B) is potentially subject to civil penalties. 
C) is potentially subject to fines and a prison sentence. 
D) will have an unlimited statute of limitations for the fraudulent tax return. 
E) None of the choices are correct. 
A) is potentially subject to criminal penalties. 
B) is potentially subject to civil penalties. 
C) is potentially subject to fines and a prison sentence. 
D) will have an unlimited statute of limitations for the fraudulent tax return. 
E) None of the choices are correct.

Question 10

If Lindley requests an extension to file her individual tax return in a timely manner,the latest she could pay her tax due without penalty is:

Accepted Answer

A) April 15th. 
B) October 15th. 
C) August 15th. 
D) November 15th. 
E) None of the choices are correct. 
A) April 15th. 
B) October 15th. 
C) August 15th. 
D) November 15th. 
E) None of the choices are correct.

Question 11

Corporations are required to file a tax return only if their taxable income is greater than:

Accepted Answer

A) $0. 
B) $1,000. 
C) $600. 
D) $750. 
E) None of the choices are correct.Corporations are always required to file a tax return. 
A) $0. 
B) $1,000. 
C) $600. 
D) $750. 
E) None of the choices are correct.Corporations are always required to file a tax return.

Question 12

Mel recently received a 30-day letter from the IRS.Although his tax return being audited has several potential large issues (potential tax consequences of $70,000 − $80,000),the IRS agent auditing his return only identified one item that will require a modest adjustment of $10,000.Mel feels strongly that the $10,000 adjustment would not hold up in court and was surprised that the IRS agent did not identify some of the other potential larger issues.What are Mel's choices with respect to the 30-day letter and what factors should influence his decisions?

Accepted Answer

The "30-day letter" instructs the taxpay

Question 13

For the following taxpayers indicate whether the taxpayer should file a tax return and why.
a.Robert earned $50,000 this year as a staff accountant.His estimated tax liability is $4,500,and he expects to receive a $500 tax refund.
b.Amy earned $4,000 this year working part-time.She will have no federal tax liability and has not made any federal tax payments.
c.Ty earned $2,500 this summer and had $200 of federal taxes withheld from his paycheck.He will have no federal tax liability this year.
d.Startup Corporation had a $50,000 loss this year.
e.The Walker Family Trust earned $500 of gross income this year.

Accepted Answer

(a)Because his gross income exceeds the

Question 14

Which of the following committees typically initiates tax legislation?

Accepted Answer

A) House Ways and Means Committee. 
B) Joint Conference Committee. 
C) Senate Finance Committee. 
D) Senate Tax Committee. 
E) None of the choices are correct. 
A) House Ways and Means Committee. 
B) Joint Conference Committee. 
C) Senate Finance Committee. 
D) Senate Tax Committee. 
E) None of the choices are correct.

Question 15

Generally,code sections are arranged (grouped together):

Accepted Answer

A) chronologically. 
B) by topic. 
C) randomly. 
D) by length. 
E) None of the choices are correct. 
A) chronologically. 
B) by topic. 
C) randomly. 
D) by length. 
E) None of the choices are correct.

Question 16

Which of the following is not considered a primary authority?

Accepted Answer

A) Tax Court case. 
B) Treasury Regulation. 
C) Revenue ruling. 
D) Tax service. 
E) None of the choices are correct. 
A) Tax Court case. 
B) Treasury Regulation. 
C) Revenue ruling. 
D) Tax service. 
E) None of the choices are correct.

Question 17

Joel reported a high amount of charitable contributions as a deduction on his individual tax return relative to taxpayers with similar income levels.The information matching program is the IRS program most likely to identify Joel's tax return for audit.

Accepted Answer

A) True 
 B)False

Question 18

The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S.Senate.

Accepted Answer

A) True 
 B)False

Question 19

Under the tax law,taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability (e.g.,due to fraud).

Accepted Answer

A) True 
 B)False

Question 20

Bill filed his 2019 tax return on March 15th,2020.The statute of limitations for IRS assessment on Bill's 2019 tax return should end:

Accepted Answer

A) March 15th,2022. 
B) April 15th,2022. 
C) March 15th,2023. 
D) April 15th,2023. 
E) None of the choices are correct. 
A) March 15th,2022. 
B) April 15th,2022. 
C) March 15th,2023. 
D) April 15th,2023. 
E) None of the choices are correct.

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

For which of the following tax violations is a civil penalty not imposed on taxpayers?

Lavonda discovered that the 5th Circuit (where Lavonda resides)has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS.Lavonda should choose which of the following trial courts to hear her case:

A taxpayer can avoid a substantial understatement of tax penalty:

Closed facts are especially conducive to tax planning.

Kim has decided to litigate a tax issue with the IRS.Describe the trial - level courts that Kim may use to litigate the case.

In general,a CPA will satisfy his professional responsibilities under the Statements on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority.

The Internal Revenue Code of 1986 is the name of the current income tax code of the United States of America.

Greg earned $25,500 this year and had $1,500 of federal income taxes withheld from his salary.Assuming that Greg is single,25 years old,and will have a total tax liability of $1,402 (and thus will receive a $98 refund),he:

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

If Lindley requests an extension to file her individual tax return in a timely manner,the latest she could pay her tax due without penalty is:

Corporations are required to file a tax return only if their taxable income is greater than:

Which of the following committees typically initiates tax legislation?

Generally,code sections are arranged (grouped together):

Which of the following is not considered a primary authority?

Joel reported a high amount of charitable contributions as a deduction on his individual tax return relative to taxpayers with similar income levels.The information matching program is the IRS program most likely to identify Joel's tax return for audit.

The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S.Senate.

Under the tax law,taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability (e.g.,due to fraud).

Bill filed his 2019 tax return on March 15th,2020.The statute of limitations for IRS assessment on Bill's 2019 tax return should end:

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

Lavonda discovered that the 5^th Circuit (where Lavonda resides)has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS.Lavonda should choose which of the following trial courts to hear her case:

Bill filed his 2019 tax return on March 15^th,2020.The statute of limitations for IRS assessment on Bill's 2019 tax return should end: