Exam 26: Tax Practice and Ethics

Minnie,your tax client,has decided to dispute the Revenue Agent's Report.List and discuss at least four of your "next steps" as you prepare to represent Minnie concerning her tax issue within the IRS and in the courts.

The tax penalty imposed on appraisers:

Evaluate this statement: a taxpayer is liable not only for tax penalties as described in the tax Code and Regulations.Sanctions elsewhere in Federal law,such as in the criminal code,also apply in a tax dispute.

Comment on the AICPA's Statements on Standards for Tax Services.To whom do the standards apply? Are they binding or merely advisory?

As part of a tax return engagement for XYZ Partnership,Enrolled Agent Wang can draft an amendment to the XYZ partnership agreement.

For each of the indicated tax penalties, indicate the appropriate taxpayer defense. A letter may be used more than once. Not all of the letters might be used. a.Ignorance of the tax law b.Reasonable basis c.Reasonable cause d.Complexity of the tax law e.Substantial authority f.Disclosure on return -Substantial understatement of tax liability.

Lori,a calendar year individual taxpayer,files her 2014 return on February 10,2016.She had obtained a six-month extension for filing her return.There was additional income tax of $30,000 due with the return. a.What are Lori's penalties for failure to file and to pay? a.change if Lori,before the due date of the return,had retained a CPA to prepare the return and it was the CPA's negligence that caused the delay? b. Would your answer to

Concerning the penalty for civil tax fraud:

A CPA,an attorney,and a(n) ____________________ can represent taxpayers before the IRS in an Appeals conference.

The taxpayer must pay a significant fee to have a letter ruling issued by the IRS.

Circular 230 requires that the tax practitioner use the "best practices" of the tax profession in carrying out a tax engagement.Specify what some of these best practices entail.

Linwell underpaid his taxes by $250,000.Portions of the underpayment were attributable to negligence ($210,000) and to civil fraud ($40,000).Compute the total penalties incurred.

Silvio,a cash basis,calendar year taxpayer,filed his income tax return 75 days after the due date.Silvio never extended his return,and with the return he paid the full amount of taxes that were due.What penalties will Silvio incur,and how much is the penalty if his additional tax is $5,000? Disregard any additional interest he must pay.

If the taxpayer refuses to pay an assessed tax,the IRS can seize taxpayer property under the ____________________ process.

Juanita,who is subject to a 40% marginal Federal gift tax rate,made a gift of a sculpture to Bianca,valuing the property at $150,000.The IRS later valued the gift at $300,000.The applicable undervaluation penalty is:

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 -Willful and reckless conduct.

In a criminal fraud case,the burden is on the taxpayer to show that he or she was innocent "beyond the shadow of any reasonable doubt."

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 -Substantial understatement of a tax.

Some taxpayers must make quarterly estimated payments of their income tax.Describe the structure of these requirements.In your answer,include both corporate and non-corporate taxpayers.

The IRS can require that the taxpayer produce its financial accounting records,to determine if taxable income is computed correctly.