Exam 18: The Tax Compliance Process

Mr. and Mrs. Ibrah filed their 2011 Form 1040 on June 6, 2012. Assuming that the return does not contain any significant errors, what is the latest date that the IRS can assess any additional 2011 tax?

Mr. and Mrs. Pitt filed a joint tax return in 2010. The couple divorced in 2011. The IRS audited their 2010 return and determined that the Pitts had underpaid their tax by $38,200. Which of the following statements is true?

The IRS who audited Mr. Kodak's 2009 Form 1040 assessed an $87,400 deficiency. If the agent believes that the entire deficiency was caused by Mr. Kodak's willful attempt to cheat the government, compute the resulting civil fraud penalty.

Which of the following statements about a tax deficiency is true?

In which of the following is not a condition for relief of liability under the innocent spouse rule?

The fact that a taxpayer receives a refund check indicates that the IRS is satisfied with the accuracy of the taxpayer's return.

A person can't be relieved of liability for a tax deficiency under the innocent spouse rule unless that person was forced to sign the tax return under duress.

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

Which type of audit takes place at the taxpayer's place of business?

The IRS can't impose a negligence penalty on an individual who relied on the advice of a CPA in preparing his tax return.

The revenue agent who audited Mr. Silver's 2009 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 2009. Which of the following statements is false?

Which type of audit can be handled entirely by telephone or through the mail?

Employees who deliberately have excess income tax withheld from their salaries in order to receive a tax refund are making an interest-free loan of the excess withholding to the government.

Which of the following statements about the DIF score is true?

Ms. Hepp filed her 2011 Form 1040 on February 19, 2012. 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?

During the audit of Mr. and Mrs. Luce's income tax return, the revenue agent concluded that the couple had claimed a $26,300 deduction that was not allowed by law. The improper deduction reduced the couple's tax by $9,205. The Luces' total tax deficiency was $13,890. a. Compute the penalty that the IRS agent can impose if he concludes that the improper deduction was attributable to negligence. b. Compute the penalty that the IRS agent can impose if he concludes that the improper deduction was attributable to fraud.

Taxpayers who can't complete their tax return by the filing date can request an automatic extension of time to file the return and pay any balance of tax due.

For no particularly good reason, Ms. Totter has not yet filed her 2011 Form 1040. Which of the following statements is false?

Which of the following statements about the outcome of an IRS audit is false?

Who of the following can't represent a taxpayer during an interview with the IRS?