Question 1

With respect to the Small Cases Division of the Tax Court,

Accepted Answer

A) The taxpayer (but not the IRS) can appeal a contrary judgment. 
B) The IRS (but not the taxpayer) can appeal a contrary judgment. 
C) Either the IRS or the taxpayer can appeal a contrary judgment. 
D) Neither the IRS nor the taxpayer can appeal a contrary judgment. 
A) The taxpayer (but not the IRS) can appeal a contrary judgment. 
B) The IRS (but not the taxpayer) can appeal a contrary judgment. 
C) Either the IRS or the taxpayer can appeal a contrary judgment. 
D) Neither the IRS nor the taxpayer can appeal a contrary judgment.

Question 2

Jenny prepared Steve's income tax returns for no compensation for 2013 and 2014.Jenny is Steve's mother.In 2016,the IRS notifies Steve that it will audit his returns for 2013 and 2014.Jenny cannot represent Steve during the audit of the returns,as she is not a "registered tax return preparer."

Accepted Answer

A) True 
 B)False

Question 3

The Treasury document regulating the professional conduct of tax return preparers is the Regulation known as _________________________.

Accepted Answer

The answer of The Treasury document regulating the professional conduct...

Question 4

A registered tax return preparer who is not also a CPA,attorney,or Enrolled Agent:

Accepted Answer

A) Can prepare returns and give tax advice. 
B) Can represent the taxpayer before an IRS Appeals officer. 
C) Must pass an annual qualifying exam concerning the tax law. 
D) Is subject only to selected Circular 230 rules. 
A) Can prepare returns and give tax advice. 
B) Can represent the taxpayer before an IRS Appeals officer. 
C) Must pass an annual qualifying exam concerning the tax law. 
D) Is subject only to selected Circular 230 rules.

Question 5

A CPA can take a tax return position for a client that is contrary to current IRS interpretations of the law.

Accepted Answer

A) True 
 B)False

Question 6

The tax professional can do more than just tax compliance work.He or she can work with the client in consultation over the strategy and tactics of dealing with a Federal tax audit.

Accepted Answer

A) True 
 B)False

Question 7

CPA Shearer is required by AICPA tax ethics rules to inform her client Martinez of significant changes in the Federal income tax laws.

Accepted Answer

A) True 
 B)False

Question 8

The Statements on Standards for Tax Services are issued by the:

Accepted Answer

A) IRS. 
B) AICPA. 
C) ABA. 
D) SEC. 
A) IRS. 
B) AICPA. 
C) ABA. 
D) SEC.

Question 9

If the taxpayer shows ____________________ for an underpayment of tax,the failure to pay penalty can be reduced or eliminated.

Accepted Answer

The answer of If the taxpayer shows ____________________ for an...

Question 10

Which statement is incorrect as to the conduct of IRS income tax audits?

Accepted Answer

A) Most IRS examinations of Forms 1040 are conducted solely through the mail. 
B) The "office audit" occurs less frequently than all other audit types. 
C) The IRS publishes the factors its computers use for audit selection purposes annually in the Commissioner's Report. 
D) For a Form 1040 that is filed on April 11,if the taxpayer has not received an audit notification from the IRS by the end of the year,the return still may be audited. 
A) Most IRS examinations of Forms 1040 are conducted solely through the mail. 
B) The "office audit" occurs less frequently than all other audit types. 
C) The IRS publishes the factors its computers use for audit selection purposes annually in the Commissioner's Report. 
D) For a Form 1040 that is filed on April 11,if the taxpayer has not received an audit notification from the IRS by the end of the year,the return still may be audited.

Question 11

Which of the following statements correctly reflects the rules governing interest to be paid on an individual's Federal tax deficiency or claim for refund?

Accepted Answer

A) The IRS has full discretion in determining the rate that will apply. 
B) The simple interest method for calculating interest is used. 
C) IRS interest compounds daily. 
D) Congress sets the IRS interest rate twice each year. 
A) The IRS has full discretion in determining the rate that will apply. 
B) The simple interest method for calculating interest is used. 
C) IRS interest compounds daily. 
D) Congress sets the IRS interest rate twice each year.

Question 12

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter.
a.Taxpayer penalty
b.Tax preparer penalty
c.Appraiser's penalty
-Failure to pay a tax.

Accepted Answer

The answer of Match each of the following tax penalties...

Question 13

After a tax audit,the taxpayer receives the Revenue Agent's Report as part of the "30-day letter."

Accepted Answer

A) True 
 B)False

Question 14

In a letter ruling,the IRS responds to a taxpayer request concerning the tax treatment of a proposed transaction.

Accepted Answer

A) True 
 B)False

Question 15

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter.
a.Taxpayer penalty
b.Tax preparer penalty
c.Appraiser's penalty
-Improper refund claim.

Accepted Answer

The answer of Match each of the following tax penalties...

Question 16

The IRS can waive the penalty for a substantial understatement of a tax liability if the taxpayer shows ____________________ for the position taken on the tax return.

Accepted Answer

substantia

Question 17

The Commissioner of the IRS is appointed by the:

Accepted Answer

A) Secretary of the Treasury Department. 
B) U.S.President. 
C) U.S.House of Representatives. 
D) U.S.Senate. 
E) SEC Commissioner. 
A) Secretary of the Treasury Department. 
B) U.S.President. 
C) U.S.House of Representatives. 
D) U.S.Senate. 
E) SEC Commissioner.

Question 18

A negligence penalty is assessed when the taxpayer is found to have not made a reasonable attempt to comply with the tax law.

Accepted Answer

A) True 
 B)False

Question 19

According to the IRS,the annual "Tax Gap" totals about $______________________ billion.

Accepted Answer

The answer of According to the IRS,the annual "Tax Gap"...

Question 20

An individual is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

Accepted Answer

The answer of An individual is not subject to an...

Exam 26: Tax Practice and Ethics

With respect to the Small Cases Division of the Tax Court,

Jenny prepared Steve's income tax returns for no compensation for 2013 and 2014.Jenny is Steve's mother.In 2016,the IRS notifies Steve that it will audit his returns for 2013 and 2014.Jenny cannot represent Steve during the audit of the returns,as she is not a "registered tax return preparer."

The Treasury document regulating the professional conduct of tax return preparers is the Regulation known as _________________________.

A registered tax return preparer who is not also a CPA,attorney,or Enrolled Agent:

A CPA can take a tax return position for a client that is contrary to current IRS interpretations of the law.

The tax professional can do more than just tax compliance work.He or she can work with the client in consultation over the strategy and tactics of dealing with a Federal tax audit.

CPA Shearer is required by AICPA tax ethics rules to inform her client Martinez of significant changes in the Federal income tax laws.

The Statements on Standards for Tax Services are issued by the:

If the taxpayer shows ____________________ for an underpayment of tax,the failure to pay penalty can be reduced or eliminated.

Which statement is incorrect as to the conduct of IRS income tax audits?

Which of the following statements correctly reflects the rules governing interest to be paid on an individual's Federal tax deficiency or claim for refund?

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Failure to pay a tax.

After a tax audit,the taxpayer receives the Revenue Agent's Report as part of the "30-day letter."

In a letter ruling,the IRS responds to a taxpayer request concerning the tax treatment of a proposed transaction.

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Improper refund claim.

The IRS can waive the penalty for a substantial understatement of a tax liability if the taxpayer shows ____________________ for the position taken on the tax return.

The Commissioner of the IRS is appointed by the:

A negligence penalty is assessed when the taxpayer is found to have not made a reasonable attempt to comply with the tax law.

According to the IRS,the annual "Tax Gap" totals about $______________________ billion.

An individual is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

An Introduction to Taxation and Understanding the Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxabl

Property Transactions: Capital Gains and Losses, section 1231 and Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Family Tax Planning

Income Taxation of Trusts and Estates

Filters