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 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 2

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

Accepted Answer

A)  Judicial hierarchy. 
B)  The Goldman rule. 
C)  Judicial consistency. 
D)  Stare decisis. 
E)  None of the choices are correct. 
A)  Judicial hierarchy. 
B)  The Goldman rule. 
C)  Judicial consistency. 
D)  Stare decisis. 
E)  None of the choices are correct.

Question 3

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 4

If the IRS assesses additional tax on a tax return upon audit, a taxpayer may be subject to interest and penalties on the underpayment.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following has the highest authoritative weight?

Accepted Answer

A)  Text book. 
B)  Private letter ruling. 
C)  Revenue ruling. 
D)  Tax service. 
E)  Tax article. 
A)  Text book. 
B)  Private letter ruling. 
C)  Revenue ruling. 
D)  Tax service. 
E)  Tax article.

Question 6

An extension to file a tax return does not extend the due date for tax payments.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following has the lowest authoritative weight?

Accepted Answer

A)  Legislative regulation. 
B)  Private letter ruling. 
C)  Revenue ruling. 
D)  Interpretative regulation. 
E)  Revenue procedure. 
A)  Legislative regulation. 
B)  Private letter ruling. 
C)  Revenue ruling. 
D)  Interpretative regulation. 
E)  Revenue procedure.

Question 8

Generally, if April 15ᵗʰ falls on a Saturday, individual tax returns will be due on:

Accepted Answer

A)  April 14ᵗʰ. 
B)  April 15ᵗʰ. 
C)  April 16ᵗʰ. 
D)  April 17ᵗʰ. 
E)  None of the choices are correct. 
A)  April 14ᵗʰ. 
B)  April 15ᵗʰ. 
C)  April 16ᵗʰ. 
D)  April 17ᵗʰ. 
E)  None of the choices are correct.

Question 9

Caitlin is a tax manager for an accounting firm, and Duff is a first year staff accountant. Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.

Accepted Answer

A tax researcher's ability to identify i

Question 10

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 11

Lindy, a tax intern, is beginning her first tax research case for her employer. Her manager has given her a basic understanding of the facts and has identified the basic research question. Lindy is now ready to begin searching for relevant tax authorities. Describe the different types of research tools available to help a tax researcher locate relevant authority and identify which type may be especially useful for Lindy.

Accepted Answer

Tax services aid the researcher in ident

Question 12

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 13

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

Accepted Answer

A)  May 1ˢᵗ, 2022. 
B)  April 15ᵗʰ, 2022. 
C)  May 1ˢᵗ, 2025. 
D)  April 15ᵗʰ, 2025. 
E)  None of the choices are correct. 
A)  May 1ˢᵗ, 2022. 
B)  April 15ᵗʰ, 2022. 
C)  May 1ˢᵗ, 2025. 
D)  April 15ᵗʰ, 2025. 
E)  None of the choices are correct.

Question 14

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 2ⁿᵈ 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 perfect

Question 15

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

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 16

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 17

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 18

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 that

Question 19

In researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a common method that the IRS uses to select returns for audit?

Accepted Answer

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

A taxpayer can avoid a substantial understatement of tax penalty:

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

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

If the IRS assesses additional tax on a tax return upon audit, a taxpayer may be subject to interest and penalties on the underpayment.

Which of the following has the highest authoritative weight?

An extension to file a tax return does not extend the due date for tax payments.

Which of the following has the lowest authoritative weight?

Generally, if April 15ᵗʰ falls on a Saturday, individual tax returns will be due on:

Caitlin is a tax manager for an accounting firm, and Duff is a first year staff accountant. Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.

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:

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:

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

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

In a planning context,

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:

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 researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Which of the following is not a common method that the IRS uses to select returns 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

Filters

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

A taxpayer can avoid a substantial understatement of tax penalty:

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

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

If the IRS assesses additional tax on a tax return upon audit, a taxpayer may be subject to interest and penalties on the underpayment.

Which of the following has the highest authoritative weight?

An extension to file a tax return does not extend the due date for tax payments.

Which of the following has the lowest authoritative weight?

Generally, if April 15ᵗʰ falls on a Saturday, individual tax returns will be due on:

Caitlin is a tax manager for an accounting firm, and Duff is a first year staff accountant. Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.

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:

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:

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

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

In a planning context,

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:

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 researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Which of the following is not a common method that the IRS uses to select returns 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

Filters