Question 1

A penalty may result when a taxpayer overstates by _____________________ percent or more the basis of an asset in computing a capital gain.

Accepted Answer

The answer of A penalty may result when a taxpayer...

Question 2

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

Accepted Answer

The IRS has engaged in the fol

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Circular 230 prohibits a tax preparer from charging an unconscionable fee for his/her services.

Accepted Answer

A) True 
 B)False

Question 5

A negligence penalty is 20% of the underpayment attributable to negligence.

Accepted Answer

A) True 
 B)False

Question 6

Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS.

Accepted Answer

These circumstances

Question 7

A taxpayer can take a dispute to the Small Cases Division of the Tax Court when the disputed amounts do not exceed $____________________.

Accepted Answer

The answer of A taxpayer can take a dispute to...

Question 8

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 9

Juanita,who is subject to a 40% marginal 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:

Accepted Answer

A) $0. 
B) $10,000 (maximum penalty). 
C) $12,000. 
D) $24,000. 
A) $0. 
B) $10,000 (maximum penalty). 
C) $12,000. 
D) $24,000.

Question 10

A penalty is assessed if the tax preparer fails to give the client a copy of the completed return.

Accepted Answer

A) True 
 B)False

Question 11

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
-Fraudulent failure to file

Accepted Answer

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

Question 12

The taxpayer might secure a(n)_________________________ ____________________ to assure that a retirement plan qualifies for tax deferral treatment.

Accepted Answer

determinat

Question 13

A tax preparer is in violation of Circular 230 if he or she:

Accepted Answer

A) Discusses the content of a client's tax return with a friend. 
B) Does not sign the tax return that is prepared as a favor for a relative. 
C) Files a tax return that includes a math error. 
D) Fails to inform the IRS of an error on the client's prior-year return. 
E) All of the above are circular 230 violations. 
A) Discusses the content of a client's tax return with a friend. 
B) Does not sign the tax return that is prepared as a favor for a relative. 
C) Files a tax return that includes a math error. 
D) Fails to inform the IRS of an error on the client's prior-year return. 
E) All of the above are circular 230 violations.

Question 14

A taxpayer's return might be selected for audit on the basis of the ____________________ score that the IRS computes.

Accepted Answer

The answer of A taxpayer's return might be selected for...

Question 15

Anthony,an individual calendar year taxpayer,incurred the following transactions.
 
Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

Accepted Answer

A) More than $245,000. 
B) More than $225,000. 
C) More than $149,250. 
D) The six-year rule cannot apply here. 
A) More than $245,000. 
B) More than $225,000. 
C) More than $149,250. 
D) The six-year rule cannot apply here.

Question 16

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

Accepted Answer

A) True 
 B)False

Question 17

If a taxpayer is audited by the IRS and is unwilling to accept the findings of the agent,how does the taxpayer's audit strategy change when the dispute is taken to the IRS Appeals Division? Hint: What are the "hazards of litigation?"

Accepted Answer

The taxpayer may attempt to negotiate an

Question 18

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 deposit withholding tax

Accepted Answer

The answer of For each of the indicated penalties, indicate...

Question 19

Why should the tax practitioner study the workings of the IRS?

Accepted Answer

The tax practitioner

Question 20

A letter ruling can be used to establish the level of reasonable employee compensation.

Accepted Answer

A) True 
 B)False

A penalty may result when a taxpayer overstates by _____________________ percent or more the basis of an asset in computing a capital gain.

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

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

Circular 230 prohibits a tax preparer from charging an unconscionable fee for his/her services.

A negligence penalty is 20% of the underpayment attributable to negligence.

Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS.

A taxpayer can take a dispute to the Small Cases Division of the Tax Court when the disputed amounts do not exceed $____________________.

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

Juanita,who is subject to a 40% marginal 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:

A penalty is assessed if the tax preparer fails to give the client a copy of the completed return.

The taxpayer might secure a(n)_____ to assure that a retirement plan qualifies for tax deferral treatment.

A tax preparer is in violation of Circular 230 if he or she:

A taxpayer's return might be selected for audit on the basis of the ____________________ score that the IRS computes.

Anthony,an individual calendar year taxpayer,incurred the following transactions. Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

If a taxpayer is audited by the IRS and is unwilling to accept the findings of the agent,how does the taxpayer's audit strategy change when the dispute is taken to the IRS Appeals Division? Hint: What are the "hazards of litigation?"

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 deposit withholding tax

Why should the tax practitioner study the workings of the IRS?

A letter ruling can be used to establish the level of reasonable employee compensation.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 16: Tax Practice and Ethics

A penalty may result when a taxpayer overstates by _____________________ percent or more the basis of an asset in computing a capital gain.

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

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

Circular 230 prohibits a tax preparer from charging an unconscionable fee for his/her services.

A negligence penalty is 20% of the underpayment attributable to negligence.

Identify a profile for a taxpayer who is more likely than the national average to be audited by the IRS.

A taxpayer can take a dispute to the Small Cases Division of the Tax Court when the disputed amounts do not exceed $____________________.

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

Juanita,who is subject to a 40% marginal 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:

A penalty is assessed if the tax preparer fails to give the client a copy of the completed return.

The taxpayer might secure a(n)_________________________ ____________________ to assure that a retirement plan qualifies for tax deferral treatment.

A tax preparer is in violation of Circular 230 if he or she:

A taxpayer's return might be selected for audit on the basis of the ____________________ score that the IRS computes.

Anthony,an individual calendar year taxpayer,incurred the following transactions. Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

If a taxpayer is audited by the IRS and is unwilling to accept the findings of the agent,how does the taxpayer's audit strategy change when the dispute is taken to the IRS Appeals Division? Hint: What are the "hazards of litigation?"

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 deposit withholding tax

Why should the tax practitioner study the workings of the IRS?

A letter ruling can be used to establish the level of reasonable employee compensation.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, operation, and Basis

Partnerships: Distributions, transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Exempt Entities

Multistate Corporate Taxation

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

The taxpayer might secure a(n)_____ to assure that a retirement plan qualifies for tax deferral treatment.