Question 1

The Internal Revenue Service is part of the

Accepted Answer

A) Congress. 
B) Treasury Department. 
C) Federal Bureau of Investigation. 
D) U)S. Customs Department. 
A) Congress. 
B) Treasury Department. 
C) Federal Bureau of Investigation. 
D) U)S. Customs Department.

Question 2

Jayne and Jon jointly file a tax return this year. Jayne fraudulently reports two expenses on Schedule C: $2,000 and $2,500. The IRS audits the return, assesses a $1,050 deficiency, and begins collection efforts two years after the timely filing by Jayne and Jon. What must Jon do to be relieved of the $1,050 tax liability?

Accepted Answer

Jon must meet all five conditions to ele

Question 3

What is the IRS guideline for determining whether a tax return position has substantial authority?

Accepted Answer

A) A person knowledgeable in the tax law concludes that the position has a something less than 50% likelihood of being supported. 
B) A person knowledgeable in the tax law concludes that the position has at least a 50% likelihood of being supported. 
C) A person knowledgeable in the tax law concludes that the position has at least a two-thirds likelihood of being supported. 
D) A person knowledgeable in the tax law concludes that the position has at least a 75% likelihood of being supported. 
A) A person knowledgeable in the tax law concludes that the position has a something less than 50% likelihood of being supported. 
B) A person knowledgeable in the tax law concludes that the position has at least a 50% likelihood of being supported. 
C) A person knowledgeable in the tax law concludes that the position has at least a two-thirds likelihood of being supported. 
D) A person knowledgeable in the tax law concludes that the position has at least a 75% likelihood of being supported.

Question 4

Identify which of the following statements is false.

Accepted Answer

A) The IRS issues annually a revenue procedure that prescribes how a letter ruling should be requested and the information to be contained in the ruling request. 
B) The request for a ruling may contain a suggested conclusion (or answer)that the taxpayer proposes that the IRS adopt in the described situation. 
C) As a practical consideration, taxpayers always find it preferable to obtain an advance ruling on questionable tax situations. 
D) Third parties may not cite private letter rulings as authority for the tax consequences of their transactions. 
A) The IRS issues annually a revenue procedure that prescribes how a letter ruling should be requested and the information to be contained in the ruling request. 
B) The request for a ruling may contain a suggested conclusion (or answer)that the taxpayer proposes that the IRS adopt in the described situation. 
C) As a practical consideration, taxpayers always find it preferable to obtain an advance ruling on questionable tax situations. 
D) Third parties may not cite private letter rulings as authority for the tax consequences of their transactions.

Question 5

Identify which of the following statements is false.

Accepted Answer

A) The majority of the individual tax returns that are audited are selected under the DIF program. 
B) The TCMP audit program has been temporarily suspended by the IRS and replaced in part by lifestyle audits. 
C) The IRS is authorized to pay a reward to individuals who provide information resulting in increased collections. 
D) All of the above are false. 
A) The majority of the individual tax returns that are audited are selected under the DIF program. 
B) The TCMP audit program has been temporarily suspended by the IRS and replaced in part by lifestyle audits. 
C) The IRS is authorized to pay a reward to individuals who provide information resulting in increased collections. 
D) All of the above are false.

Question 6

The IRS audits Kiara's current-year individual return and determines that, among other errors, she negligently did not report dividend income of $10,000. The deficiency with respect to the dividends is $2,800. The IRS argues for an additional $12,000 deficiency for various other errors that do not involve negligence. What is Kiara's negligence penalty for the $14,800 in deficiencies?

Accepted Answer

The neglig

Question 7

Linda's individual tax return for the current year is subject to an IRS audit. The IRS assesses a $10,000 deficiency, $4,000 of which is due to Linda's negligence. What is Linda's negligence penalty?

Accepted Answer

The negligence penalty is $800

Question 8

What is the penalty for a tax return preparer who willfully attempts to understate taxes, or intentionally disregards the tax rules and regulations?

Accepted Answer

A) $50 
B) $250 
C) $5,000 
D) 20% of the understatement 
A) $50 
B) $250 
C) $5,000 
D) 20% of the understatement

Question 9

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

Accepted Answer

A) Head of Household 
B) Hope and Lifetime Learning Credit 
C) Child Tax Credit and Earned Income Tax Credit 
D) All of the above 
A) Head of Household 
B) Hope and Lifetime Learning Credit 
C) Child Tax Credit and Earned Income Tax Credit 
D) All of the above

Question 10

If Brad files his last year's individual tax return on July 5 of the current year after having requested an extension, what is the amount of his failure-to-pay penalty if his total tax is $10,000 and he paid $9,500 through timely withholding and $500 with the return?

Accepted Answer

A) $0 
B) $6 
C) $60 
D) none of the above 
A) $0 
B) $6 
C) $60 
D) none of the above

Question 11

If a return's due date is extended, a taxpayer

Accepted Answer

A) also extends the period in which to pay taxes without interest. 
B) still should pay the tax by the original return due date. 
C) has 30 days following the original due date to pay estimated taxes without penalty. 
D) has 30 days following the original due date to pay estimated taxes without interest. 
A) also extends the period in which to pay taxes without interest. 
B) still should pay the tax by the original return due date. 
C) has 30 days following the original due date to pay estimated taxes without penalty. 
D) has 30 days following the original due date to pay estimated taxes without interest.

Question 12

Identify which of the following statements is false.

Accepted Answer

A) If the phrase "Entered under Rule 155" appears at the end of the Tax Court's opinion, the litigating parties must jointly determine the additional tax due. 
B) A taxpayer does not have to pay the tax assessment before filing suit in a U.S. district court or the U.S. Court of Federal Claims. 
C) Either the taxpayer or the government can appeal the decision of a court of original jurisdiction to the next higher court with the potential for a final ruling from the U.S. Supreme Court if a writ of certiorari is granted. 
D) All of the above are false. 
A) If the phrase "Entered under Rule 155" appears at the end of the Tax Court's opinion, the litigating parties must jointly determine the additional tax due. 
B) A taxpayer does not have to pay the tax assessment before filing suit in a U.S. district court or the U.S. Court of Federal Claims. 
C) Either the taxpayer or the government can appeal the decision of a court of original jurisdiction to the next higher court with the potential for a final ruling from the U.S. Supreme Court if a writ of certiorari is granted. 
D) All of the above are false.

Question 13

On July 25 of the following year, Joy files her current calendar-year tax return without having requested an extension. On October 8, she pays the amount due. The tax shown on her return is $25,000. Her current-year withholding tax is $20,000. Joy pays no estimated taxes and does not claim any tax credits on her current year return. Calculate the penalties that the IRS is likely to assess. Ignore the penalty for underpayment of estimated taxes. Assume she did not commit fraud.

Accepted Answer

The answer of On July 25 of the following year,...

Question 14

The IRS audited the tax returns of Dan Jackson, a gifted painter. The IRS contends for several years, Jackson received $500,000 for his paintings, but reported non cash payments of $75,000. Jackson attributed the shortfall to his receipt of cash at art fairs and street fairs. He allegedly concealed the cash payments in separate bank accounts unbeknownst to his CPA. What tax compliance issues regarding the alleged underreporting are pertinent to the CPA?

Accepted Answer

Dan Jackson, his agent, and CPA (tax ret

Question 15

You are preparing the tax return for Agre Corporation, which has sales of $50 million. Agre made a $2 million expenditure for which the appropriate tax treatment, deductible or capitalizable, is a gray area. The corporation's Chief Financial Officer wants you to deduct the expenditure. What tax compliance issues should you consider in deciding whether to deduct the expenditure?

Accepted Answer

• Will you as the tax return preparer ha

Question 16

Explain the four conditions that must be met in civil cases for the burden of proving any factual issue relevant to the determination of taxpayer liability to rest with the IRS.

Accepted Answer

The taxpayer must introduce "credible ev

Question 17

Which of the following activities is protected by accountant-client privilege?

Accepted Answer

A) written communications between a CPA and a corporation regarding a tax shelter 
B) communications related to tax return preparation 
C) communications related to criminal tax evasion 
D) advice given regarding tax issues in a divorce 
A) written communications between a CPA and a corporation regarding a tax shelter 
B) communications related to tax return preparation 
C) communications related to criminal tax evasion 
D) advice given regarding tax issues in a divorce

Question 18

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

Accepted Answer

A) The return contains an understatement of tax attributable to the erroneous item(s)of an individual filing it. 
B) The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C) The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D) Based on all the facts and circumstances, holding the other individual for the deficiency would be inequitable. 
A) The return contains an understatement of tax attributable to the erroneous item(s)of an individual filing it. 
B) The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C) The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D) Based on all the facts and circumstances, holding the other individual for the deficiency would be inequitable.

Question 19

The maximum failure to file penalty is a total of 25% of the underpayment.

Accepted Answer

A) True 
 B)False

Question 20

What is the difference between the burden of proof for civil and criminal fraud?

Accepted Answer

The burden of proof is:
Clear

The Internal Revenue Service is part of the

What is the IRS guideline for determining whether a tax return position has substantial authority?

Identify which of the following statements is false.

Identify which of the following statements is false.

Linda's individual tax return for the current year is subject to an IRS audit. The IRS assesses a $10,000 deficiency, $4,000 of which is due to Linda's negligence. What is Linda's negligence penalty?

What is the penalty for a tax return preparer who willfully attempts to understate taxes, or intentionally disregards the tax rules and regulations?

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

If Brad files his last year's individual tax return on July 5 of the current year after having requested an extension, what is the amount of his failure-to-pay penalty if his total tax is $10,000 and he paid $9,500 through timely withholding and $500 with the return?

If a return's due date is extended, a taxpayer

Identify which of the following statements is false.

Explain the four conditions that must be met in civil cases for the burden of proving any factual issue relevant to the determination of taxpayer liability to rest with the IRS.

Which of the following activities is protected by accountant-client privilege?

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

The maximum failure to file penalty is a total of 25% of the underpayment.

What is the difference between the burden of proof for civil and criminal fraud?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Us Taxation of Foreign-Related Transactions

Filters

Exam 15: Administrative Procedures

The Internal Revenue Service is part of the

What is the IRS guideline for determining whether a tax return position has substantial authority?

Identify which of the following statements is false.

Identify which of the following statements is false.

Linda's individual tax return for the current year is subject to an IRS audit. The IRS assesses a $10,000 deficiency, $4,000 of which is due to Linda's negligence. What is Linda's negligence penalty?

What is the penalty for a tax return preparer who willfully attempts to understate taxes, or intentionally disregards the tax rules and regulations?

A $500 penalty for each instance of failing to comply with the due diligence requirements for determining eligibility applies to which of the following?

If Brad files his last year's individual tax return on July 5 of the current year after having requested an extension, what is the amount of his failure-to-pay penalty if his total tax is $10,000 and he paid $9,500 through timely withholding and $500 with the return?

If a return's due date is extended, a taxpayer

Identify which of the following statements is false.

Explain the four conditions that must be met in civil cases for the burden of proving any factual issue relevant to the determination of taxpayer liability to rest with the IRS.

Which of the following activities is protected by accountant-client privilege?

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

The maximum failure to file penalty is a total of 25% of the underpayment.

What is the difference between the burden of proof for civil and criminal fraud?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Us Taxation of Foreign-Related Transactions

Filters