Question 1

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 the position is not frivolous and disclosed on the tax return. 
D) if the position has a reasonable basis and is 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 the position is not frivolous and disclosed on the tax return. 
D) if the position has a reasonable basis and is disclosed on the tax return. 
E) None of the choices are correct.

Question 2

Allen filed his 2019 tax return on May 15th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Accepted Answer

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

Question 3

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Accepted Answer

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

Question 4

Princess,who resides in the 2nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Accepted Answer

A) 2nd Circuit. 
B) Federal Circuit. 
C) 1st Circuit. 
D) 2nd Circuit or the Federal Circuit. 
E) None of the choices are correct. 
A) 2nd Circuit. 
B) Federal Circuit. 
C) 1st Circuit. 
D) 2nd Circuit or the Federal Circuit. 
E) None of the choices are correct.

Question 5

Under the Statements on Standards for Tax Services,a CPA may recommend a tax return position if the position is frivolous and the position is not disclosed on the tax return.

Accepted Answer

A) True 
 B)False

Question 6

The IRS DIF system checks each tax return for mathematical mistakes and errors.

Accepted Answer

A) True 
 B)False

Question 7

Henry filed his 2019 tax return on May 15th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Accepted Answer

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

Question 8

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Accepted Answer

There are serious ramifications for comm

Question 9

Circular 230 was issued by:

Accepted Answer

A) AICPA. 
B) State boards of accountancy. 
C) American Bar Association. 
D) IRS. 
E) None of the choices are correct. 
A) AICPA. 
B) State boards of accountancy. 
C) American Bar Association. 
D) IRS. 
E) None of the choices are correct.

Question 10

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Accepted Answer

A) Filing status. 
B) Taxpayer's gross income. 
C) Taxpayer's employment. 
D) Taxpayer's age. 
E) None of the choices are correct. 
A) Filing status. 
B) Taxpayer's gross income. 
C) Taxpayer's employment. 
D) Taxpayer's age. 
E) None of the choices are correct.

Question 11

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income.If Tyrone's tax return is chosen for audit because of his large charitable contributions,which audit program likely identified Tyrone's tax return for audit?

Accepted Answer

A) DIF system. 
B) Deduction Detective. 
C) Document perfection. 
D) Information matching. 
E) None of the choices are correct. 
A) DIF system. 
B) Deduction Detective. 
C) Document perfection. 
D) Information matching. 
E) None of the choices are correct.

Question 12

Raul was researching an issue and found two tax court decisions issued within six months of each other,one for a taxpayer residing in California and the other for a taxpayer residing in New York,whose rulings were inconsistent.Raul knows that the federal tax law does not differ by state and the issue was exactly the same in both cases.Raul is confused because he thought that a basic judicial doctrine was that a court is supposed to rule consistently.Name and describe this judicial doctrine that requires judicial consistency and discuss why the tax court may have intentionally ruled inconsistently in this example.

Accepted Answer

In rendering court decisions,all courts

A taxpayer can avoid a substantial understatement of tax penalty:

Allen filed his 2019 tax return on May 15^th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Princess,who resides in the 2^nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Under the Statements on Standards for Tax Services,a CPA may recommend a tax return position if the position is frivolous and the position is not disclosed on the tax return.

The IRS DIF system checks each tax return for mathematical mistakes and errors.

Henry filed his 2019 tax return on May 15^th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Circular 230 was issued by:

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income.If Tyrone's tax return is chosen for audit because of his large charitable contributions,which audit program likely identified Tyrone's tax return for audit?

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

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

A taxpayer can avoid a substantial understatement of tax penalty:

Allen filed his 2019 tax return on May 15th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Princess,who resides in the 2nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Under the Statements on Standards for Tax Services,a CPA may recommend a tax return position if the position is frivolous and the position is not disclosed on the tax return.

The IRS DIF system checks each tax return for mathematical mistakes and errors.

Henry filed his 2019 tax return on May 15th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Circular 230 was issued by:

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income.If Tyrone's tax return is chosen for audit because of his large charitable contributions,which audit program likely identified Tyrone's tax return for audit?

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

Allen filed his 2019 tax return on May 15^th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Princess,who resides in the 2^nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Henry filed his 2019 tax return on May 15^th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end: