Exam 18: The Tax Compliance Process

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

Which of the following statements about tax fraud is true?

Linney Corporation, which uses a June 30 fiscal year end for tax purposes, requested an automatic six-month extension of time to file its return for FYE June 30, 2018. It filed the return on February 18, 2019. The revenue agent who examined the return suspects that Linney may have substantially underreported income for the year. Which of the following is false? 

Hepp filed her 2017 Form 1040 on February 19, 2018. The return showed a $2,730 overpayment of tax, and Ms. Hepp received her refund check from the IRS on April 30. Which of the following statements is true?

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

Which type of audit has the broadest scope and may involve a complete analysis of the taxpayer's accounting records?

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

Which of the following should increase the likelihood that Ms. Piper's Form 1040 will be selected for audit by the IRS?

An individual who didn't graduate from high school has less exposure to a negligence penalty from the IRS than a college graduate.

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

Mrs Jordan applied for an automatic six-month extension of time (until October 15, 2018) to file her 2017 income tax return. She actually filed an accurate return on July 9, 2018. The IRS may audit the return and assess Mrs Jordan for additional 2017 tax at any time through:

The statute of limitations for a tax return does not begin to run until the return is filed.

Taxpayers who win their case in court are automatically entitled to recover litigation expenses from the government.

Which of the following statements about taxpayer responsibility is false?

Mr Hepp, a self-employed consultant, failed to include a $38,200 income item on his 2017 Form 1040, which he filed on March 9, 2018. The gross income reported on the return was $102,380. What is the latest date that the IRS can assess any additional 2017 tax?

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

This year, the IRS audited Mr and Mr Simon's 2015 income tax return and determined that they underpaid their tax by $13,780. Which of the following statements is true?

Mr and Mrs Dint filed their 2017 Form 1040 on January 28, 2018. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2017 tax?

Mr Beale prepared and signed his 2017 tax return on April 3, 2018. However, he carelessly forgot to mail the return until May 19. He enclosed his check for the $11,940 balance of tax due with the return. Compute Mr Beale's late-filing and late-payment penalty.

The Taxpayer's Bill of Rights prevents the IRS from seizing a taxpayer's assets to satisfy a tax deficiency.