Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A)  understatement of tax exceeding the greater of 10% of tax required to be shown on the return or $5,000 for individuals 
B)  underpayment of tax exceeding the greater of 15% of the tax required to be shown on the return or $5,000 for individuals 
C)  underpayment of tax exceeding the lesser of 25% of the tax required to be shown on the return or $5,000 for individuals 
D)  $10,000 or more difference between the amount shown on the return and the correct amount due 
A)  understatement of tax exceeding the greater of 10% of tax required to be shown on the return or $5,000 for individuals 
B)  underpayment of tax exceeding the greater of 15% of the tax required to be shown on the return or $5,000 for individuals 
C)  underpayment of tax exceeding the lesser of 25% of the tax required to be shown on the return or $5,000 for individuals 
D)  $10,000 or more difference between the amount shown on the return and the correct amount due A

Question 3

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

Accepted Answer

A)  improper deductions. 
B)  improper credits. 
C)  improper basis. 
D)  All are understatements subject to minimum thresholds. 
A)  improper deductions. 
B)  improper credits. 
C)  improper basis. 
D)  All are understatements subject to minimum thresholds. D

Question 4

Pete has reported a tax liability of $3,500 on his 2012 tax return.His 2013 withholding was $3,800.He did not file his 2013 return until June 12,2014.What penalties does Pete owe?

Accepted Answer

Pete owes no penalty for failu

Question 5

A taxpayer's return is audited and additional taxes are assessed.The IRS also asserts that a negligence penalty should be assessed.The taxpayer concurs with the additional $15,000 tax liability; $7,000 of this amount is attributable to negligence.What is the amount of the penalty for negligence?

Accepted Answer

A)  $700 
B)  $1,400 
C)  $5,600 
D)  $1,750 
A)  $700 
B)  $1,400 
C)  $5,600 
D)  $1,750

Question 6

A letter ruling is a written determination that interprets and applies the tax laws to the taxpayer's specific set of facts.

Accepted Answer

A) True 
 B)False

Question 7

Identify which of the following statements is false.

Accepted Answer

A)  A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue. 
B)  If the taxpayer being audited does not concur with the proposed assessment, the Service is required to send the taxpayer a 30-day letter detailing the proposed changes and the available appeals process. 
C)  During the audit process, if the taxpayer concurs with the assessment of tax by the IRS and signs Form 870 (Waiver of Restrictions on Assessment and Collection of Deficiency in Tax), then the taxpayer is precluded from filing a refund suit. 
D)  Interest on a deficiency accrues from the due date of the return through the payment date. 
A)  A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue. 
B)  If the taxpayer being audited does not concur with the proposed assessment, the Service is required to send the taxpayer a 30-day letter detailing the proposed changes and the available appeals process. 
C)  During the audit process, if the taxpayer concurs with the assessment of tax by the IRS and signs Form 870 (Waiver of Restrictions on Assessment and Collection of Deficiency in Tax), then the taxpayer is precluded from filing a refund suit. 
D)  Interest on a deficiency accrues from the due date of the return through the payment date.

Question 8

Identify which of the following statements is false.

Accepted Answer

A)  Appeals officers usually have the operating authority to settle disputes with taxpayers based on the "hazards of litigation." 
B)  When an appeals officer is dealing with an "appeals coordinated issue," he has the authority to settle with the taxpayer based on the "hazards of litigation." 
C)  A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue. 
D)  If the taxpayer and the appeals officer fail to reach agreement, the IRS issues a 90-day letter. 
A)  Appeals officers usually have the operating authority to settle disputes with taxpayers based on the "hazards of litigation." 
B)  When an appeals officer is dealing with an "appeals coordinated issue," he has the authority to settle with the taxpayer based on the "hazards of litigation." 
C)  A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue. 
D)  If the taxpayer and the appeals officer fail to reach agreement, the IRS issues a 90-day letter.

Question 9

Identify which of the following statements is false.

Accepted Answer

A)  The majority of the individual tax returns that are audited are selected under the DIF program. 
B)  The TCMP audit program has been temporarily suspended by the IRS and replaced in part by lifestyle audits. 
C)  The IRS is authorized to pay a reward to individuals who provide information resulting in increased collections. 
D)  All of the above are false. 
A)  The majority of the individual tax returns that are audited are selected under the DIF program. 
B)  The TCMP audit program has been temporarily suspended by the IRS and replaced in part by lifestyle audits. 
C)  The IRS is authorized to pay a reward to individuals who provide information resulting in increased collections. 
D)  All of the above are false.

Question 10

The "automatic" extension period for filing an individual return is seven months.

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Jayne and Jon jointly file a tax return this year.Jayne fraudulently reports two expenses on Schedule C: $2,000 and $2,500.The IRS audits the return,assesses a $1,050 deficiency,and begins collection efforts two years after the timely filing by Jayne and Jon.What must Jon do to be relieved of the $1,050 tax liability?

Accepted Answer

Jon must meet all five conditions to ele

Question 13

What is the IRS guideline for determining whether a tax return position has substantial authority?

Accepted Answer

A)  A person knowledgeable in the tax law concludes that the position has a something less than 50% likelihood of being supported. 
B)  A person knowledgeable in the tax law concludes that the position has at least a 50% likelihood of being supported. 
C)  A person knowledgeable in the tax law concludes that the position has at least a two-thirds likelihood of being supported. 
D)  A person knowledgeable in the tax law concludes that the position has at least a 75% likelihood of being supported. 
A)  A person knowledgeable in the tax law concludes that the position has a something less than 50% likelihood of being supported. 
B)  A person knowledgeable in the tax law concludes that the position has at least a 50% likelihood of being supported. 
C)  A person knowledgeable in the tax law concludes that the position has at least a two-thirds likelihood of being supported. 
D)  A person knowledgeable in the tax law concludes that the position has at least a 75% likelihood of being supported.

Question 14

Identify which of the following statements is true.

Accepted Answer

A)  An individual taxpayer may be subject to a penalty for underpayment of estimated taxes if his balance of tax due when he files is $500. 
B)  A penalty for substantial understatement will potentially be assessed on an individual if the underpayment of tax exceeds the greater of 15% of the tax shown on the return or $5,000. 
C)  Substantial authority exists for a position that is supported by a decision rendered by the Court of Appeals for the taxpayer's own circuit. 
D)  All of the above are true. 
A)  An individual taxpayer may be subject to a penalty for underpayment of estimated taxes if his balance of tax due when he files is $500. 
B)  A penalty for substantial understatement will potentially be assessed on an individual if the underpayment of tax exceeds the greater of 15% of the tax shown on the return or $5,000. 
C)  Substantial authority exists for a position that is supported by a decision rendered by the Court of Appeals for the taxpayer's own circuit. 
D)  All of the above are true.

Question 15

How does the IRS regulate the activities of compensated tax return preparers? In particular,list six acts that will cause a compensated tax return preparer to incur a penalty.

Accepted Answer

Regulation of tax return preparers occur

Question 16

The IRS will issue a ruling

Accepted Answer

A)  on prospective transactions only. 
B)  only if regulations have been issued on the subject. 
C)  on a completed transaction for which a return has been filed. 
D)  to clarify the tax treatment of a transaction. 
A)  on prospective transactions only. 
B)  only if regulations have been issued on the subject. 
C)  on a completed transaction for which a return has been filed. 
D)  to clarify the tax treatment of a transaction.

Question 17

A taxpayer can automatically escape the penalty for underpayment of taxes by

Accepted Answer

A)  owing less than $1,000 in taxes over and above the taxes withheld from wages. 
B)  owing taxes in the previous year. 
C)  having a casualty loss. 
D)  none of the above 
A)  owing less than $1,000 in taxes over and above the taxes withheld from wages. 
B)  owing taxes in the previous year. 
C)  having a casualty loss. 
D)  none of the above

Question 18

Identify which of the following statements is true.

Accepted Answer

A)  A partnership is not required to file a return if the partnership has no income for the year. 
B)  The "automatic" extension period for filing an individual return is five months. 
C)  Individuals and calendar year-end corporations may obtain six-month extensions for paying taxes and filing their returns for the taxable year by filing the appropriate extension requests. 
D)  All of the above are false. 
A)  A partnership is not required to file a return if the partnership has no income for the year. 
B)  The "automatic" extension period for filing an individual return is five months. 
C)  Individuals and calendar year-end corporations may obtain six-month extensions for paying taxes and filing their returns for the taxable year by filing the appropriate extension requests. 
D)  All of the above are false.

Question 19

Identify which of the following statements is false.

Accepted Answer

A)  In general, the taxpayer has the burden of proof in Tax Court cases. However, the IRS has the burden of proof for issues raised after the issuance of the 90-day letter. 
B)  A taxpayer may want to avoid using the Tax Court to litigate an issue because decisions from this court cannot be appealed. 
C)  The Tax Court can be used to litigate a tax issue without first paying the tax assessment. 
D)  In order to litigate in the Tax Court, a petition must be filed within 90 days of the issuance of a notice of deficiency. 
A)  In general, the taxpayer has the burden of proof in Tax Court cases. However, the IRS has the burden of proof for issues raised after the issuance of the 90-day letter. 
B)  A taxpayer may want to avoid using the Tax Court to litigate an issue because decisions from this court cannot be appealed. 
C)  The Tax Court can be used to litigate a tax issue without first paying the tax assessment. 
D)  In order to litigate in the Tax Court, a petition must be filed within 90 days of the issuance of a notice of deficiency.

Question 20

One of your corporate clients comes to you asking for advice regarding a proposed merger with XYZ Company.You (a)issue an opinion concerning the FMV of XYZ,(b)prepare pro forma financials for the merged entity to be,(c)draft shareholder resolutions for your client approving the proposed merger,(d)file a shareholder proxy statement with the U.S.Securities and Exchange Commission,and (e)advise your client's board of directors concerning the advantages of a Type A versus a Type B reorganization.Which of these activities,if any,constitutes the unauthorized practice of law?

Accepted Answer

Activities (c)and (d)constitute the unau

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

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

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

Pete has reported a tax liability of $3,500 on his 2012 tax return.His 2013 withholding was $3,800.He did not file his 2013 return until June 12,2014.What penalties does Pete owe?

A taxpayer's return is audited and additional taxes are assessed.The IRS also asserts that a negligence penalty should be assessed.The taxpayer concurs with the additional $15,000 tax liability; $7,000 of this amount is attributable to negligence.What is the amount of the penalty for negligence?

A letter ruling is a written determination that interprets and applies the tax laws to the taxpayer's specific set of facts.

Identify which of the following statements is false.

Identify which of the following statements is false.

Identify which of the following statements is false.

The "automatic" extension period for filing an individual return is seven months.

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.

What is the IRS guideline for determining whether a tax return position has substantial authority?

Identify which of the following statements is true.

How does the IRS regulate the activities of compensated tax return preparers? In particular,list six acts that will cause a compensated tax return preparer to incur a penalty.

The IRS will issue a ruling

A taxpayer can automatically escape the penalty for underpayment of taxes by

Identify which of the following statements is true.

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

US Taxation of Foreign-Related Transactions

Filters

Exam 15: Administrative Procedures

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

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

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

Pete has reported a tax liability of $3,500 on his 2012 tax return.His 2013 withholding was $3,800.He did not file his 2013 return until June 12,2014.What penalties does Pete owe?

A taxpayer's return is audited and additional taxes are assessed.The IRS also asserts that a negligence penalty should be assessed.The taxpayer concurs with the additional $15,000 tax liability; $7,000 of this amount is attributable to negligence.What is the amount of the penalty for negligence?

A letter ruling is a written determination that interprets and applies the tax laws to the taxpayer's specific set of facts.

Identify which of the following statements is false.

Identify which of the following statements is false.

Identify which of the following statements is false.

The "automatic" extension period for filing an individual return is seven months.

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.

What is the IRS guideline for determining whether a tax return position has substantial authority?

Identify which of the following statements is true.

How does the IRS regulate the activities of compensated tax return preparers? In particular,list six acts that will cause a compensated tax return preparer to incur a penalty.

The IRS will issue a ruling

A taxpayer can automatically escape the penalty for underpayment of taxes by

Identify which of the following statements is true.

Identify which of the following statements is false.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

US Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

US Taxation of Foreign-Related Transactions

Filters