Exam 15: Administrative Procedures

The IRS audits Kiara's current-year individual return and determines that,among other errors,she negligently did not report dividend income of $10,000.The deficiency with respect to the dividends is $2,800.The IRS argues for an additional $12,000 deficiency for various other errors that do not involve negligence.What is Kiara's negligence penalty for the $14,800 in deficiencies?

Identify which of the following statements is true.

What is the penalty for a tax return preparer who willfully attempts to understate taxes,or intentionally disregards the tax rules and regulations?

The maximum failure to file penalty is a total of 25% of the underpayment.

The IRS will issue a 90-day letter (a Statutory Notice of Deficiency)if the taxpayer does not file a protest letter within 30 days of the date of the 30-day letter.

The majority of the individual tax returns that are audited are selected under the DIF program.

The innocent spouse relief provision from tax liability covers all of the following except

Explain how the Internal Revenue Service is organized to be efficient and client-oriented.

One of your corporate clients has recently filed for bankruptcy.In the course of the proceedings,you (a)prepare a plan of reorganization that alters the rights of preferred stockholders, (b)notify the company's creditors of an impending bulk transfer of the company's assets, (c)review IRS secured claims against these assets, (d)restructure the company's debt by reducing its principal amount and extending its maturity,and (e)advise the bankruptcy court as to how this restructuring will impact the company's NOLs.Which of these activities,if any,constitutes the unauthorized practice of law?

Identify which of the following statements is false.

Identify which of the following statements is true.

In which of the situations below will a taxpayer not be assessed interest on the tax remitted?

A substantial understatement of tax liability involves which of the following?

What is the requirement for a substantial understatement of tax for individuals?

Billy,a calendar-year taxpayer,files his current year individual tax return on August 17 of the following year without having requested an extension.His return reports an amount due of $5,000.Billy pays this amount on November 23 of the following year.What are Billy's penalties for his failure to file and his failure to pay his tax on time? Assume Billy did not commit fraud.

If Brad files his last year's individual tax return on July 5 of the current year after having requested an extension,what is the amount of his failure-to-pay penalty if his total tax is $10,000 and he paid $9,500 through timely withholding and $500 with the return?

If the taxpayer has credible evidence,the IRS bears the burden of proof in a tax dispute.

Identify which of the following statements is true.

Identify which of the following statements is false.

Which one of the following statements about letter rulings is false?