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

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

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:

The Internal Revenue Code and tax treaties are examples of statutory authorities.

Houston has found conflicting authorities that address a research question for one of his clients. The majority of the authorities provide a favorable answer for his client. Nonetheless, there are several authorities that provide an unfavorable answer. Houston estimates that if the client takes the more favorable position on its tax return that there is approximately a 60 percent chance that the position will be sustained upon audit or judicial proceeding. If the client takes this position on its tax return, will Houston be subject to penalty? Will the client potentially be subject to penalty?

If the President vetoes tax legislation, Congress:

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?

Mary Ann is working on a pretty big research project. Her manager has alerted her to the possibility that some of her research questions are likely to be questions of fact, whereas others are likely to be questions of law. Explain the difference between the two types of questions and how this would influence her research.

Raul was researching an issue and found two Tax Court decisions issued within 6 months of each other, one for a taxpayer residing in California and the other for a taxpayer residing in New York whose rulings were inconsistent. Raul knows that the federal tax law does not differ by state and the issue was exactly the same in both cases. Raul is confused because he thought that a basic judicial doctrine was that a court is supposed to rule consistently. Name and describe this judicial doctrine that requires judicial consistency and discuss why the Tax Court may have intentionally ruled inconsistently in this example.

Kodak is a beginning tax researcher. He knows that the 1st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project, and any advice that may help Kodak.

Lavonda discovered that the 5th Circuit (where Lavonda resides) has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:

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.

For fraudulent tax returns, the statute of limitations for IRS assessment is ten years.

Under the tax law, taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability (e.g., due to fraud).

If Paula requests an extension to file her tax return, the latest she could file her return without penalty is:

Which of the following has the highest authoritative weight?

Which types of penalties are only imposed after normal due process including a trial?

Corporations are required to file a tax return only if their taxable income is greater than:

Carey was researching a tax issue and located what appears to be a favorable IRS regulation. He knows that regulations serve different purposes and are issued in different forms. Which purpose and which form of regulation would provide Carey the most confidence that he has found an authority that carries a lot of weight for the long term? How could Carey check the status of this regulation?

The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing status.