Question 1

Which of the following statements about criminal tax fraud is false?

Accepted Answer

A)  Criminal tax fraud is a felony offense. 
B)  A taxpayer must be convicted of criminal tax fraud in federal court. 
C)  Individuals who are convicted of criminal tax fraud may be fined or imprisoned or both. 
D)  None of these choices arefalse. 
A)  Criminal tax fraud is a felony offense. 
B)  A taxpayer must be convicted of criminal tax fraud in federal court. 
C)  Individuals who are convicted of criminal tax fraud may be fined or imprisoned or both. 
D)  None of these choices arefalse.

Question 2

Which of the following statements about taxpayer negligence is false?

Accepted Answer

A)  A taxpayer who makes a good faith effort to comply with the tax law is not negligent. 
B)  A taxpayer who keeps complete and careful tax records is less likely to incur a negligence penalty than a taxpayer with no records. 
C)  A taxpayer who cooperates with the revenue agent is less likely to incur a negligence penalty than an uncooperative taxpayer. 
D)  A taxpayer who relies on the advice of a tax professional has a guaranteed defense against the negligence penalty. 
A)  A taxpayer who makes a good faith effort to comply with the tax law is not negligent. 
B)  A taxpayer who keeps complete and careful tax records is less likely to incur a negligence penalty than a taxpayer with no records. 
C)  A taxpayer who cooperates with the revenue agent is less likely to incur a negligence penalty than an uncooperative taxpayer. 
D)  A taxpayer who relies on the advice of a tax professional has a guaranteed defense against the negligence penalty.

Question 3

Which type of audit takes place at an IRS district office?

Accepted Answer

A)  Correspondence examination 
B)  Office examination 
C)  Field examination 
D)  All of these choices are correct 
A)  Correspondence examination 
B)  Office examination 
C)  Field examination 
D)  All of these choices are correct

Question 4

Mr. and Mrs. Chung filed their unextended 2019 Form 1040 on May 30, 2020, and had no reasonable cause for the delinquency. The return showed a $10,479 balance of tax due. Compute the Chungs' late-filing and late-payment penalty.

Accepted Answer

A)  $524 
B)  $1,048 
C)  $2,620 
D)  None of these choices are correct 
A)  $524 
B)  $1,048 
C)  $2,620 
D)  None of these choices are correct

Question 5

Mr. Fiocchi filed his unextended 2019 Form 1040 on July 22, 2020, and had no reasonable cause for the delinquency. The return showed a $1,906 overpayment of tax (refund due). Compute Mr. Fiocchi's late-filing and late-payment penalty.

Accepted Answer

A)  -0- 
B)  $191 
C)  $286 
D)  $381 
A)  -0- 
B)  $191 
C)  $286 
D)  $381

Question 6

Ms. Dela filed her unextended 2019 Form 1040 on November 2, 2020, and had no reasonable cause for the delinquency. The return showed a $22,840 balance of tax due. Compute Ms. Dela's late-filing and late-payment penalty.

Accepted Answer

A)  $5,710 
B)  $7,994 
C)  $5,938 
D)  $4,568 
A)  $5,710 
B)  $7,994 
C)  $5,938 
D)  $4,568

Question 7

According to the Taxpayer Bill of Rights, a taxpayer has the right to both privacy and confidentiality during the course of an IRS audit.

Accepted Answer

A) True 
 B)False

Question 8

Mr. Braco is an enrolled agent who prepares tax returns for a living. In preparing Mr. and Mrs. Colter's Form 1040, Mr. Braco claimed a deduction based on an unreasonable legal position. Mr. Braco's compensation for the return was $3,800. What is the consequence to Mr. Braco if the IRS disallows the deduction?

Accepted Answer

A)  The IRS can terminate Mr. Braco's status as an enrolled agent. 
B)  The IRS can impose a $1,900 penalty on Mr. Braco. 
C)  The IRS can impose a negligence penalty on the Colters but can't penalize Mr. Braco. 
D)  The IRS can impose a civil fraud penalty on Mr. Braco. 
A)  The IRS can terminate Mr. Braco's status as an enrolled agent. 
B)  The IRS can impose a $1,900 penalty on Mr. Braco. 
C)  The IRS can impose a negligence penalty on the Colters but can't penalize Mr. Braco. 
D)  The IRS can impose a civil fraud penalty on Mr. Braco.

Question 9

Which of the following statements about federal tax return filing dates is false?

Accepted Answer

A)  A corporation with a fiscal tax year ending on September 30 must file its unextended Form 1120 by January 15 following the close of the tax year. 
B)  A corporation may request an automatic extension of time to file Form 1120. 
C)  A corporation may request an extension of time to pay any balance due of its annual income tax if it has reasonable cause for the delay. 
D)  None of these choices are false. 
A)  A corporation with a fiscal tax year ending on September 30 must file its unextended Form 1120 by January 15 following the close of the tax year. 
B)  A corporation may request an automatic extension of time to file Form 1120. 
C)  A corporation may request an extension of time to pay any balance due of its annual income tax if it has reasonable cause for the delay. 
D)  None of these choices are false.

Question 10

Only one spouse must sign a jointly filed Form 1040.

Accepted Answer

A) True 
 B)False

Question 11

The harshest administrative penalty that the IRS can impose is the civil fraud penalty.

Accepted Answer

A) True 
 B)False

Question 12

Corporations are allowed to deduct interest paid on an income tax deficiency as a business expense.

Accepted Answer

A) True 
 B)False

Question 13

The IRS who audited Mr. Kodak's 2018 Form 1040 assessed an $87,400 deficiency. If the agent believes that the entire deficiency was caused by Mr. Kodak's willful attempt to cheat the government, compute the resulting civil fraud penalty.

Accepted Answer

A)  $17,480 
B)  $21,850 
C)  $65,550 
D)  None of these choices are correct 
A)  $17,480 
B)  $21,850 
C)  $65,550 
D)  None of these choices are correct

Question 14

Mr. and Mrs. Ibrah filed their 2019 Form 1040 on June 6, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Accepted Answer

A)  December 31, 2022 
B)  June 6, 2023 
C)  April 15, 2023 
D)  December 31, 2023 
A)  December 31, 2022 
B)  June 6, 2023 
C)  April 15, 2023 
D)  December 31, 2023

Question 15

Only the government may appeal a tax case to the U.S. Supreme Court.

Accepted Answer

A) True 
 B)False

Question 16

Mr. and Mrs. Pitt filed a joint tax return last year. The couple divorced this year. The IRS audited their last year's return and determined that the Pitts had underpaid their tax by $38,200. Which of the following statements is true?

Accepted Answer

A)  The IRS can assess either Mr. Pitt or Mrs. Pitt for the entire deficiency. 
B)  Because the couple is divorced, the IRS must assess Mr. Pitt with a $19,100 deficiency and Mrs. Pitt with a $19,100 deficiency. 
C)  Because the couple is divorced, the IRS must apportion the deficiency between Mr. and Mrs. Pitt based on their relative contribution to taxable income. 
D)  The IRS must assess whichever spouse actually prepared the return for the entire deficiency. 
A)  The IRS can assess either Mr. Pitt or Mrs. Pitt for the entire deficiency. 
B)  Because the couple is divorced, the IRS must assess Mr. Pitt with a $19,100 deficiency and Mrs. Pitt with a $19,100 deficiency. 
C)  Because the couple is divorced, the IRS must apportion the deficiency between Mr. and Mrs. Pitt based on their relative contribution to taxable income. 
D)  The IRS must assess whichever spouse actually prepared the return for the entire deficiency.

Question 17

The geographic location of the trial court in a tax dispute determines which of the appellate courts will hear an appeal.

Accepted Answer

A) True 
 B)False

Question 18

The IRS assessed Ms. Tinlock a $3,050 income tax deficiency. Which of the following steps can the IRS not take to collect the deficiency?

Accepted Answer

A)  Seize Ms. Tinlock's assets and sell them at auction. 
B)  Garnish Ms. Tinlock's salary. 
C)  Assess the deficiency against Ms. Tinlock's children age 21 years or older. 
D)  The IRS can take all of the above steps to collect the deficiency. 
A)  Seize Ms. Tinlock's assets and sell them at auction. 
B)  Garnish Ms. Tinlock's salary. 
C)  Assess the deficiency against Ms. Tinlock's children age 21 years or older. 
D)  The IRS can take all of the above steps to collect the deficiency.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Mr. and Mrs. Dint filed their 2019 Form 1040 on January 28, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Accepted Answer

A)  December 31, 2022 
B)  January 28, 2023 
C)  April 15, 2023 
D)  December 31, 2023 
A)  December 31, 2022 
B)  January 28, 2023 
C)  April 15, 2023 
D)  December 31, 2023

Which of the following statements about criminal tax fraud is false?

Which of the following statements about taxpayer negligence is false?

Which type of audit takes place at an IRS district office?

Mr. and Mrs. Chung filed their unextended 2019 Form 1040 on May 30, 2020, and had no reasonable cause for the delinquency. The return showed a $10,479 balance of tax due. Compute the Chungs' late-filing and late-payment penalty.

Mr. Fiocchi filed his unextended 2019 Form 1040 on July 22, 2020, and had no reasonable cause for the delinquency. The return showed a $1,906 overpayment of tax (refund due). Compute Mr. Fiocchi's late-filing and late-payment penalty.

Ms. Dela filed her unextended 2019 Form 1040 on November 2, 2020, and had no reasonable cause for the delinquency. The return showed a $22,840 balance of tax due. Compute Ms. Dela's late-filing and late-payment penalty.

According to the Taxpayer Bill of Rights, a taxpayer has the right to both privacy and confidentiality during the course of an IRS audit.

Which of the following statements about federal tax return filing dates is false?

Only one spouse must sign a jointly filed Form 1040.

The harshest administrative penalty that the IRS can impose is the civil fraud penalty.

Corporations are allowed to deduct interest paid on an income tax deficiency as a business expense.

The IRS who audited Mr. Kodak's 2018 Form 1040 assessed an $87,400 deficiency. If the agent believes that the entire deficiency was caused by Mr. Kodak's willful attempt to cheat the government, compute the resulting civil fraud penalty.

Mr. and Mrs. Ibrah filed their 2019 Form 1040 on June 6, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Only the government may appeal a tax case to the U.S. Supreme Court.

Mr. and Mrs. Pitt filed a joint tax return last year. The couple divorced this year. The IRS audited their last year's return and determined that the Pitts had underpaid their tax by $38,200. Which of the following statements is true?

The geographic location of the trial court in a tax dispute determines which of the appellate courts will hear an appeal.

The IRS assessed Ms. Tinlock a $3,050 income tax deficiency. Which of the following steps can the IRS not take to collect the deficiency?

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

Mr. and Mrs. Dint filed their 2019 Form 1040 on January 28, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

Filters

Exam 18: The Tax Compliance Process

Which of the following statements about criminal tax fraud is false?

Which of the following statements about taxpayer negligence is false?

Which type of audit takes place at an IRS district office?

Mr. and Mrs. Chung filed their unextended 2019 Form 1040 on May 30, 2020, and had no reasonable cause for the delinquency. The return showed a $10,479 balance of tax due. Compute the Chungs' late-filing and late-payment penalty.

Mr. Fiocchi filed his unextended 2019 Form 1040 on July 22, 2020, and had no reasonable cause for the delinquency. The return showed a $1,906 overpayment of tax (refund due). Compute Mr. Fiocchi's late-filing and late-payment penalty.

Ms. Dela filed her unextended 2019 Form 1040 on November 2, 2020, and had no reasonable cause for the delinquency. The return showed a $22,840 balance of tax due. Compute Ms. Dela's late-filing and late-payment penalty.

According to the Taxpayer Bill of Rights, a taxpayer has the right to both privacy and confidentiality during the course of an IRS audit.

Which of the following statements about federal tax return filing dates is false?

Only one spouse must sign a jointly filed Form 1040.

The harshest administrative penalty that the IRS can impose is the civil fraud penalty.

Corporations are allowed to deduct interest paid on an income tax deficiency as a business expense.

The IRS who audited Mr. Kodak's 2018 Form 1040 assessed an $87,400 deficiency. If the agent believes that the entire deficiency was caused by Mr. Kodak's willful attempt to cheat the government, compute the resulting civil fraud penalty.

Mr. and Mrs. Ibrah filed their 2019 Form 1040 on June 6, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Only the government may appeal a tax case to the U.S. Supreme Court.

Mr. and Mrs. Pitt filed a joint tax return last year. The couple divorced this year. The IRS audited their last year's return and determined that the Pitts had underpaid their tax by $38,200. Which of the following statements is true?

The geographic location of the trial court in a tax dispute determines which of the appellate courts will hear an appeal.

The IRS assessed Ms. Tinlock a $3,050 income tax deficiency. Which of the following steps can the IRS not take to collect the deficiency?

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

Mr. and Mrs. Dint filed their 2019 Form 1040 on January 28, 2020. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2019 tax?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

Filters