Question 1

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 these. 
A)  Filing status. 
B)  Taxpayer's gross income. 
C)  Taxpayer's employment. 
D)  Taxpayer's age. 
E)  None of these.

Question 2

Which of the following audits is the most common and typically less comprehensive?

Accepted Answer

A)  Correspondence. 
B)  Random. 
C)  Office. 
D)  Field. 
E)  None of these. 
A)  Correspondence. 
B)  Random. 
C)  Office. 
D)  Field. 
E)  None of these.

Question 3

Bill filed his 2014 tax return on March 15th, 2015. The statute of limitations for IRS assessment on Bill's 2014 tax return should end:

Accepted Answer

A)  March 15th, 2017. 
B)  April 15th, 2017. 
C)  March 15th, 2018. 
D)  April 15th, 2018. 
E)  None of these. 
A)  March 15th, 2017. 
B)  April 15th, 2017. 
C)  March 15th, 2018. 
D)  April 15th, 2018. 
E)  None of these.

Question 4

Tina has a very complex tax return and it looks like she will not be able to file her tax return by its due date. When is her tax return due? What are Tina's options for paying her tax due and filing her tax return this year? What are the consequences if Tina does not file or pay her tax timely? Be specific.
Tina's tax return is due April 15th. Tina may request an automatic 6 month extension to file her tax return (i.e., until October 15th). Extensions allow the taxpayer to delay filing a tax return but

Accepted Answer

The answer of Tina has a very complex tax return...

Question 5

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 these 
A)  judicial hierarchy 
B)  the Goldman rule 
C)  judicial consistency 
D)  stare decisis 
E)  None of these

Question 6

The statute of limitations for IRS assessment generally ends four years after the date a tax return is filed.

Accepted Answer

A) True 
 B)False

Question 7

For the following taxpayers, please recommend the most advantageous trial level court(s) to litigate a tax issue with the IRS.
a. Joe is litigating a tax issue with the IRS that is considered a question of fact (i.e., the answers depends on the facts of the case). There is not a lot of authority on point for this case but Joe has a very appealing story to justify his position that is likely to be viewed sympathetically by his peers.
b. The Circuit Court of Appeals for the Federal Circuit recently issued an opinion that is very favorable to the issue that Jesse plans to litigate with the IRS.
c. The Circuit Court of Appeals for the Federal Circuit recently issued an opinion that is not favorable to the issue that Hank plans to litigate with the IRS.
d. The 7th Circuit (where Elizabeth resides) recently issued an opinion that is very favorable to the issue that Elizabeth plans to litigate with the IRS.

Accepted Answer

(a) U.S. District Court because it is th

Question 8

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic will have zero tax liability this year, he:

Accepted Answer

A)  is required to file a tax return. 
B)  is not required to file a tax return but should file a return anyway. 
C)  is required to file a tax return but should not file because he owes no tax. 
D)  is not required to file a tax return and should not file a return. 
E)  None of these. 
A)  is required to file a tax return. 
B)  is not required to file a tax return but should file a return anyway. 
C)  is required to file a tax return but should not file because he owes no tax. 
D)  is not required to file a tax return and should not file a return. 
E)  None of these.

Question 9

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

Accepted Answer

A)  is potentially subject to criminal penalties. 
B)  is potentially subject to civil penalties. 
C)  is potentially subject to fines and a prison sentence. 
D)  will have an unlimited statute of limitations for the fraudulent tax return. 
E)  None of these. 
A)  is potentially subject to criminal penalties. 
B)  is potentially subject to civil penalties. 
C)  is potentially subject to fines and a prison sentence. 
D)  will have an unlimited statute of limitations for the fraudulent tax return. 
E)  None of these.

Question 10

If a taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Accepted Answer

A) True 
 B)False

Question 11

Temporary Regulations have more authoritative weight than revenue rulings.

Accepted Answer

A) True 
 B)False

Question 12

For the 2014 tax returns, indicate when the statute of limitation expires and why.
a. Simon filed his tax return on April 10, 2015.
b. Billy and Barbara filed their tax returns late on December 1, 2015.
c. Pearson earns a living through various illegal activities. He filed his tax return on March 14, 2015 but did not report his illegal income on his tax return.
d. Luther filed his tax return on July 17, 2015 but has accidentally underreported his taxable gross income by 20%.

Accepted Answer

(a) April 15, 2018. The statute of limit

Question 13

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question. Which trial level court would she prefer to have issued the opinion?

Accepted Answer

A)  Tax Court 
B)  District Court 
C)  Circuit Court 
D)  Divorce Court 
E)  None of these 
A)  Tax Court 
B)  District Court 
C)  Circuit Court 
D)  Divorce Court 
E)  None of these

Question 14

Of the two basic types of tax services, beginning tax researchers often prefer topical tax services.

Accepted Answer

A) True 
 B)False

Question 15

Revenue rulings and revenue procedures are examples of primary authorities.

Accepted Answer

A) True 
 B)False

Question 16

Mel recently received a 30-day letter from the IRS. Although his tax return being audited has several potential large issues (potential tax consequences of $70,000 - $80,000), the IRS agent auditing his return only identified one item that will require a more modest adjustment ($10,000). Mel feels strongly that the $10,000 adjustment would not hold in court and was surprised that the IRS agent did not identify some of the other potential larger issues. What are Mel's choices with the 30 day letter and what factors should influence his decisions?

Accepted Answer

The "30-day letter" instructs the taxpay

Question 17

Closed facts are especially conducive to tax planning.

Accepted Answer

A) True 
 B)False

Question 18

If a taxpayer is due a refund, she does not have to file a tax return.

Accepted Answer

A) True 
 B)False

Question 19

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 the position is not frivolous and disclosed on the tax return. 
D)  if the position has a reasonable basis and is disclosed on the tax return. 
E)  None of these. 
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 the position is not frivolous and disclosed on the tax return. 
D)  if the position has a reasonable basis and is disclosed on the tax return. 
E)  None of these.

Question 20

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 these. 
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 these.

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

Which of the following audits is the most common and typically less comprehensive?

Bill filed his 2014 tax return on March 15th, 2015. The statute of limitations for IRS assessment on Bill's 2014 tax return should end:

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

The statute of limitations for IRS assessment generally ends four years after the date a tax return is filed.

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic will have zero tax liability this year, he:

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

If a taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Temporary Regulations have more authoritative weight than revenue rulings.

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question. Which trial level court would she prefer to have issued the opinion?

Of the two basic types of tax services, beginning tax researchers often prefer topical tax services.

Revenue rulings and revenue procedures are examples of primary authorities.

Closed facts are especially conducive to tax planning.

If a taxpayer is due a refund, she does not have to file a tax return.

A taxpayer can avoid a substantial understatement of tax penalty:

In a planning context,

An Introduction to Tax

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters

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

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

Which of the following audits is the most common and typically less comprehensive?

Bill filed his 2014 tax return on March 15th, 2015. The statute of limitations for IRS assessment on Bill's 2014 tax return should end:

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

The statute of limitations for IRS assessment generally ends four years after the date a tax return is filed.

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic will have zero tax liability this year, he:

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

If a taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Temporary Regulations have more authoritative weight than revenue rulings.

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question. Which trial level court would she prefer to have issued the opinion?

Of the two basic types of tax services, beginning tax researchers often prefer topical tax services.

Revenue rulings and revenue procedures are examples of primary authorities.

Closed facts are especially conducive to tax planning.

If a taxpayer is due a refund, she does not have to file a tax return.

A taxpayer can avoid a substantial understatement of tax penalty:

In a planning context,

An Introduction to Tax

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters