Exam 16: Tax Practice and Ethics

Match each of the following penalties with the rate for that penalty as specified by the Code. a.$1,000 per violation b.$500 per violation c.$50 per violation d.1/2% per month e.5% per month f.15% per month g.5% of tax due h.15% of tax due i.20% of tax due j.75% of tax due -Failure to pay over withheld tax

Match each of the following penalties with the rate for that penalty as specified by the Code. a.$1,000 per violation b.$500 per violation c.$50 per violation d.1/2% per month e.5% per month f.15% per month g.5% of tax due h.15% of tax due i.20% of tax due j.75% of tax due -Negligence

In taking a dispute to the Appeals Division,a written protest is required of the taxpayer when the proposed deficiency exceeds $____________________.

For each of the indicated penalties, indicate the appropriate taxpayer defense. a.Reasonable basis b.Reasonable cause c.Substantial authority d.Disclosure on return -Failure to file a return

For each of the indicated penalties, indicate the appropriate taxpayer defense. a.Reasonable basis b.Reasonable cause c.Substantial authority d.Disclosure on return -Preparer penalty for reckless conduct

Arnold made a charitable contribution of property that he valued at $70,000.He deducted this amount as an itemized deduction on his tax return.The IRS can prove that the real value of the property is $40,000.Arnold is in the 35% income tax bracket.Determine Arnold's amount due for both tax and any penalty.

Match each of the following penalties with the rate for that penalty as specified by the Code. a.$1,000 per violation b.$500 per violation c.$50 per violation d.1/2% per month e.5% per month f.15% per month g.5% of tax due h.15% of tax due i.20% of tax due j.75% of tax due -Civil tax fraud

According to AICPA rules,a tax preparer must inform the client if any work is ____________________ in completing a tax return.

Babs filed an amended return in 2008,claiming a refund relative to her 2006 tax computation.When the IRS approves the amended return,it will pay Babs interest with respect to the overpayment.

The Commissioner of the IRS is appointed by the:

George,a calendar year taxpayer subject to a 40% marginal gift tax rate,made a gift of a sculpture to Redd,valuing the property at $100,000.The IRS later valued the gift at $140,000.The applicable undervaluation penalty is:

Orville,a cash basis,calendar year taxpayer,filed his income tax return 100 days after the due date.Orville never extended his return,and he paid the taxes that were due.What penalty will Orville incur,and how much will he have to pay if his additional tax is $3,000? Disregard the interest he must pay.

In the case of bad debts and worthless securities,the statute of limitations on claims for refund is seven years.

During an audit,either the IRS or the taxpayer might request that the National Office issue a(n)____________________ ____________________ memorandum concerning a disputed issue.

By passing an examination,a(n)____________________ ____________________ can represent taxpayers before the IRS.

Carole,a CPA,feels that she cannot act as an aggressive advocate for tax clients in today's environment.What aspects of the ethical conduct of a tax practice might have influenced Carole's attitude?

Mickey,a calendar year taxpayer,filed a return correctly showing no income tax liability for 2007.During 2008,his AGI is $120,000 and his income tax liability was $20,000.To avoid a penalty for 2008,Mickey must make aggregate estimated tax payments of at least:

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

Purple Ltd.,a calendar year taxpayer,had the following transactions,all of which were properly reported on a timely filed return.Presuming the absence of fraud,how much of an omission from gross income must occur for Purple before the six-year statute of limitations applies? Show your computations.

A tax preparer and his/her client hold a privilege of confidentiality from the IRS,as to their discussions about completing a tax return.