Question 1

Gretchen's 2016 tax return,due April 15,2017,was filed on July 15,2017.Her tax due with the return was $1,200.Gretchen owes a late filing penalty of $180.

Accepted Answer

A) True 
 B)False

Question 2

Only one spouse must sign a jointly filed Form 1040.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements about the tax deficiency appeals process is false?

Accepted Answer

A) All litigation of tax cases must begin in the U.S.Tax Court. 
B) The Tax Court Small Cases division allows taxpayers to plead their case without an attorney. 
C) After all appeals are exhausted,the IRS may collect the deficiency by whatever means necessary. 
D) The government's goal is to collect the most feasible amount at the earliest possible time at the least cost to the government. 
A) All litigation of tax cases must begin in the U.S.Tax Court. 
B) The Tax Court Small Cases division allows taxpayers to plead their case without an attorney. 
C) After all appeals are exhausted,the IRS may collect the deficiency by whatever means necessary. 
D) The government's goal is to collect the most feasible amount at the earliest possible time at the least cost to the government.

Question 4

A taxpayer who is disputing a deficiency of $50,000 or less may request an informal hearing by the Small Tax Case Division of the Tax Court.

Accepted Answer

A) True 
 B)False

Question 5

Tony Curtis filed her 2016 income tax return on May 2,2017.Which of the following statements is false?

Accepted Answer

A) If Tony's return shows a $719 refund due,she incurs no penalty for filing on May 2. 
B) On April 14,Tony requested an automatic extension of time to file her return and paid her estimated tax due with the request.As a result,she incurs no penalty for filing on May 2. 
C) If the reason that Tony filed a delinquent return was because of an unexpected death in her family,the IRS may waive any late filing penalty. 
D) None of the above is false. 
A) If Tony's return shows a $719 refund due,she incurs no penalty for filing on May 2. 
B) On April 14,Tony requested an automatic extension of time to file her return and paid her estimated tax due with the request.As a result,she incurs no penalty for filing on May 2. 
C) If the reason that Tony filed a delinquent return was because of an unexpected death in her family,the IRS may waive any late filing penalty. 
D) None of the above is false.

Question 6

Mr.Beale prepared and signed his 2016 tax return on April 3,2017.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.

Accepted Answer

His penalty is $1,19

Question 7

Mrs.Lui decided to contest a negligence penalty in federal court.Which of the following statements is true?

Accepted Answer

A) Mrs.Lui must present a preponderance of evidence establishing that she was not negligent. 
B) The government must present a preponderance of evidence establishing that Mrs.Lui was negligent. 
C) The government must present clear and convincing evidence that Mrs.Lui was negligent. 
D) The government must establish Mrs.Lui's negligence beyond any reasonable doubt. 
A) Mrs.Lui must present a preponderance of evidence establishing that she was not negligent. 
B) The government must present a preponderance of evidence establishing that Mrs.Lui was negligent. 
C) The government must present clear and convincing evidence that Mrs.Lui was negligent. 
D) The government must establish Mrs.Lui's negligence beyond any reasonable doubt.

Question 8

Which of the following statements about taxpayer responsibility is false?

Accepted Answer

A) Taxpayers are responsible for paying the correct amount of federal tax. 
B) Taxpayers are responsible for filing the proper federal income tax return. 
C) Taxpayers are responsible for maintaining adequate tax records. 
D) None of the above is false. 
A) Taxpayers are responsible for paying the correct amount of federal tax. 
B) Taxpayers are responsible for filing the proper federal income tax return. 
C) Taxpayers are responsible for maintaining adequate tax records. 
D) None of the above is false.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Only attorneys and CPAs may prepare tax returns for compensation.

Accepted Answer

A) True 
 B)False

Question 11

Mrs.Jordan applied for an automatic six-month extension of time (until October 15,2017)to file her 2016 income tax return.She actually filed an accurate return on July 9,2017.The IRS may audit the return and assess Mrs.Jordan for additional 2016 tax at any time through:

Accepted Answer

A) April 15,2020 
B) July 9,2020 
C) August 15,2020 
D) December 31,2020 
A) April 15,2020 
B) July 9,2020 
C) August 15,2020 
D) December 31,2020

Question 12

This year,the IRS audited Mr.and Mr.Simon's 2014 income tax return and determined that they underpaid their tax by $13,780.Which of the following statements is true?

Accepted Answer

A) If the revenue agent concludes that the Simons made a reasonable attempt to compute their tax,they will not pay anything as a result of the audit. 
B) If the revenue agent concludes that the Simons made a reasonable attempt to compute their tax,they will pay a total of $13,780 as a result of the audit. 
C) Both if a taxpayer is assessed a deficiency,the government will charge interest on the deficiency regardless of the reason for the deficiency and individuals who pay interest on a tax deficiency can deduct it as an itemized deduction are true. 
D) If the revenue agent concludes that the Simons were negligent in preparing their return,the agent may assess a $10,335 penalty. 
A) If the revenue agent concludes that the Simons made a reasonable attempt to compute their tax,they will not pay anything as a result of the audit. 
B) If the revenue agent concludes that the Simons made a reasonable attempt to compute their tax,they will pay a total of $13,780 as a result of the audit. 
C) Both if a taxpayer is assessed a deficiency,the government will charge interest on the deficiency regardless of the reason for the deficiency and individuals who pay interest on a tax deficiency can deduct it as an itemized deduction are true. 
D) If the revenue agent concludes that the Simons were negligent in preparing their return,the agent may assess a $10,335 penalty.

Question 13

Mr.and Mrs.Ibrah filed their 2016 Form 1040 on June 6,2017.Assuming that the return does not contain any significant errors,what is the latest date that the IRS can assess any additional 2016 tax?

Accepted Answer

A) December 31,2020. 
B) June 6,2020 
C) April 15,2020 
D) December 31,2020 
A) December 31,2020. 
B) June 6,2020 
C) April 15,2020 
D) December 31,2020

Question 14

Which type of audit is handled by a revenue agent?

Accepted Answer

A) Correspondence examination 
B) Office examination 
C) Field examination 
D) All of the above 
A) Correspondence examination 
B) Office examination 
C) Field examination 
D) All of the above

Question 15

The revenue agent who audited Mr.Silver's 2014 Form 1040 concluded that Mr.Silver deliberately disregarded the tax rules about charitable contributions.Consequently,the agent disallowed $19,320 of Mr.Silver's contribution deduction.Mr.Silver also miscalculated his AMT in spite of his good faith effort to make the difficult calculation.Because of these two errors,the agent assessed a tax deficiency for 2014.Which of the following statements is false?

Accepted Answer

A) The agent has the authority to impose a negligence penalty in addition to the deficiency. 
B) The agent could impose a negligence penalty on the entire deficiency. 
C) The agent could impose a negligence penalty on the portion of the deficiency attributable to the disallowed contribution deduction. 
D) If the agent imposes a negligence penalty,Mr.Silver has the right to appeal the penalty. 
A) The agent has the authority to impose a negligence penalty in addition to the deficiency. 
B) The agent could impose a negligence penalty on the entire deficiency. 
C) The agent could impose a negligence penalty on the portion of the deficiency attributable to the disallowed contribution deduction. 
D) If the agent imposes a negligence penalty,Mr.Silver has the right to appeal the penalty.

Question 16

Mr.Boyd is a bookkeeper for a local auto repair company.Several years ago,he began to prepare federal income tax returns for his friends and relatives and has developed this sideline into a profitable business.Which of the following statements is true?

Accepted Answer

A) Mr.Boyd is considered an income tax return preparer subject to federal penalties because he is compensated for preparing returns. 
B) Mr.Boyd is not considered an income tax return preparer because he is not an attorney,CPA,or enrolled agent. 
C) Mr.Boyd must sign the tax returns prepared for his clients. 
D) Both Mr.Boyd is considered an income tax return preparer subject to federal penalties because he is compensated for preparing returns and Mr.Boyd must sign the tax returns prepared for his clients are true. 
A) Mr.Boyd is considered an income tax return preparer subject to federal penalties because he is compensated for preparing returns. 
B) Mr.Boyd is not considered an income tax return preparer because he is not an attorney,CPA,or enrolled agent. 
C) Mr.Boyd must sign the tax returns prepared for his clients. 
D) Both Mr.Boyd is considered an income tax return preparer subject to federal penalties because he is compensated for preparing returns and Mr.Boyd must sign the tax returns prepared for his clients are true.

Question 17

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 the above 
A) Correspondence examination 
B) Office examination 
C) Field examination 
D) All of the above

Question 18

Which of the following statements about the U.S.Tax Court is false?

Accepted Answer

A) Tax Court judges are experts who specialize in the tax law. 
B) Individuals can request a jury trial in the Tax Court. 
C) The Tax Court is one of three courts of original jurisdiction for tax cases. 
D) Both individual and corporate taxpayers can take their case to the Tax Court. 
A) Tax Court judges are experts who specialize in the tax law. 
B) Individuals can request a jury trial in the Tax Court. 
C) The Tax Court is one of three courts of original jurisdiction for tax cases. 
D) Both individual and corporate taxpayers can take their case to the Tax Court.

Question 19

Both individual and corporate taxpayers must pay any balance due of their tax by the extended due date of the tax return for the year.

Accepted Answer

A) True 
 B)False

Question 20

Macy filed her 2016 tax return on its extended due date of October 15,2017.The IRS has until December 31,2019,to audit this return.

Accepted Answer

A) True 
 B)False

Gretchen's 2016 tax return,due April 15,2017,was filed on July 15,2017.Her tax due with the return was $1,200.Gretchen owes a late filing penalty of $180.

Only one spouse must sign a jointly filed Form 1040.

Which of the following statements about the tax deficiency appeals process is false?

A taxpayer who is disputing a deficiency of $50,000 or less may request an informal hearing by the Small Tax Case Division of the Tax Court.

Tony Curtis filed her 2016 income tax return on May 2,2017.Which of the following statements is false?

Mr.Beale prepared and signed his 2016 tax return on April 3,2017.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.

Mrs.Lui decided to contest a negligence penalty in federal court.Which of the following statements is true?

Which of the following statements about taxpayer responsibility is false?

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

Only attorneys and CPAs may prepare tax returns for compensation.

Mrs.Jordan applied for an automatic six-month extension of time (until October 15,2017)to file her 2016 income tax return.She actually filed an accurate return on July 9,2017.The IRS may audit the return and assess Mrs.Jordan for additional 2016 tax at any time through:

This year,the IRS audited Mr.and Mr.Simon's 2014 income tax return and determined that they underpaid their tax by $13,780.Which of the following statements is true?

Mr.and Mrs.Ibrah filed their 2016 Form 1040 on June 6,2017.Assuming that the return does not contain any significant errors,what is the latest date that the IRS can assess any additional 2016 tax?

Which type of audit is handled by a revenue agent?

Mr.Boyd is a bookkeeper for a local auto repair company.Several years ago,he began to prepare federal income tax returns for his friends and relatives and has developed this sideline into a profitable business.Which of the following statements is true?

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

Which of the following statements about the U.S.Tax Court is false?

Both individual and corporate taxpayers must pay any balance due of their tax by the extended due date of the tax return for the year.

Macy filed her 2016 tax return on its extended due date of October 15,2017.The IRS has until December 31,2019,to audit this return.

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

Gretchen's 2016 tax return,due April 15,2017,was filed on July 15,2017.Her tax due with the return was $1,200.Gretchen owes a late filing penalty of $180.

Only one spouse must sign a jointly filed Form 1040.

Which of the following statements about the tax deficiency appeals process is false?

A taxpayer who is disputing a deficiency of $50,000 or less may request an informal hearing by the Small Tax Case Division of the Tax Court.

Tony Curtis filed her 2016 income tax return on May 2,2017.Which of the following statements is false?

Mr.Beale prepared and signed his 2016 tax return on April 3,2017.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.

Mrs.Lui decided to contest a negligence penalty in federal court.Which of the following statements is true?

Which of the following statements about taxpayer responsibility is false?

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

Only attorneys and CPAs may prepare tax returns for compensation.

Mrs.Jordan applied for an automatic six-month extension of time (until October 15,2017)to file her 2016 income tax return.She actually filed an accurate return on July 9,2017.The IRS may audit the return and assess Mrs.Jordan for additional 2016 tax at any time through:

This year,the IRS audited Mr.and Mr.Simon's 2014 income tax return and determined that they underpaid their tax by $13,780.Which of the following statements is true?

Mr.and Mrs.Ibrah filed their 2016 Form 1040 on June 6,2017.Assuming that the return does not contain any significant errors,what is the latest date that the IRS can assess any additional 2016 tax?

Which type of audit is handled by a revenue agent?

Mr.Boyd is a bookkeeper for a local auto repair company.Several years ago,he began to prepare federal income tax returns for his friends and relatives and has developed this sideline into a profitable business.Which of the following statements is true?

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

Which of the following statements about the U.S.Tax Court is false?

Both individual and corporate taxpayers must pay any balance due of their tax by the extended due date of the tax return for the year.

Macy filed her 2016 tax return on its extended due date of October 15,2017.The IRS has until December 31,2019,to audit this return.

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