Question 1

Which of the following activities is protected by accountant-client privilege?

Accepted Answer

A) written communications between a CPA and a corporation regarding a tax shelter 
B) communications related to tax return preparation 
C) communications related to criminal tax evasion 
D) advice given regarding tax issues in a divorce 
A) written communications between a CPA and a corporation regarding a tax shelter 
B) communications related to tax return preparation 
C) communications related to criminal tax evasion 
D) advice given regarding tax issues in a divorce D

Question 2

The "Statement on Practice in the Field of Federal Income Taxation" includes all of the following areas of mutual competence except

Accepted Answer

A) preparing federal income tax returns. 
B) determining the tax effect of proposed transactions. 
C) representing clients in criminal investigations. 
D) representing taxpayers before the U.S.Tax Court. 
A) preparing federal income tax returns. 
B) determining the tax effect of proposed transactions. 
C) representing clients in criminal investigations. 
D) representing taxpayers before the U.S.Tax Court. C

Question 3

The statute of limitations,which stipulates the time frame within which either the government or the taxpayer may request a redetermination of tax due,usually expires 6 years after the date on which the return is filed.

Accepted Answer

A) True 
 B)False  False

Question 4

On July 25 of the following year,Joy files her current calendar- year tax return.She had requested extensions as required.On October 8,she pays the amount due.The tax shown on her return is $22,000.Her current-year withholding tax is $21,000.Joy pays no estimated taxes and does not claim any tax credits on her current-year return.Calculate the penalties that the IRS is likely to assess.Ignore the penalty for underpayment of estimated taxes.Assume she did not commit fraud.

Accepted Answer

If Joy requests an extension,the failure

Question 5

Kristina and Victor filed a joint return for the current year.They are in the 31% marginal tax bracket.Victor did not know that Kristina failed to report a prize valued at $16,000 that she won.She used the money to buy Victor a motorcycle.Does Victor meet the tests for relief under the innocent spouse provisions?

Accepted Answer

Probably not.Although (1)Victor and Kris

Question 6

According to Circular 230,what should a CPA do upon discovery of an error in a client's prior-year return?

Accepted Answer

A) Notify the IRS of the error. 
B) Inform the client of the error and its tax consequences. 
C) File an amended return for the client. 
D) Do nothing. 
A) Notify the IRS of the error. 
B) Inform the client of the error and its tax consequences. 
C) File an amended return for the client. 
D) Do nothing.

Question 7

Gerald requests an extension for filing his last year's individual income tax return.His tax liability is $10,000,of which $8,000 was withheld,leaving a balance due of $2,000 when he files on August 1 of the current year.His penalty for failure to pay the tax on time is

Accepted Answer

A) $0. 
B) $40. 
C) $300. 
D) $400. 
A) $0. 
B) $40. 
C) $300. 
D) $400.

Question 8

Identify which of the following statements is true.

Accepted Answer

A) Form 870-AD is used if the taxpayer and IRS representative agree to a lesser tax liability than that originally proposed by the Service. 
B) Signing of Form 870-AD by the taxpayer does not generally preclude the subsequent filing of a refund claim. 
C) The IRS will issue a 90-day letter (a Statutory Notice of Deficiency)if the taxpayer does not file a protest letter within 10 days of the date of the 30-day letter. 
D) All of the above are false. 
A) Form 870-AD is used if the taxpayer and IRS representative agree to a lesser tax liability than that originally proposed by the Service. 
B) Signing of Form 870-AD by the taxpayer does not generally preclude the subsequent filing of a refund claim. 
C) The IRS will issue a 90-day letter (a Statutory Notice of Deficiency)if the taxpayer does not file a protest letter within 10 days of the date of the 30-day letter. 
D) All of the above are false.

Question 9

The taxes shown on Kate's tax returns for 2012 and 2013 were $6,000 and $9,000,respectively.Kate's withholding tax for 2009 was $7,000 and she paid no estimated taxes.Kate filed her 2013 return on April 3,2014,but she did not have sufficient funds to pay the balance due.She pays the $2,000 balance due on June 19,2014.Kate's AGI for 2013 did not exceed $150,000.Calculate the penalties Kate owes on her 2013 tax return.

Accepted Answer

Kate's 2013 AGI did not exceed $150,000.

Question 10

Identify which of the following statements is true.

Accepted Answer

A) If a taxpayer fails to file a return,the statute of limitations is extended to 10 years. 
B) If a couple files a joint return but only one spouse had income,only the spouse with income is responsible for paying any tax due. 
C) Joint and several liability means that each spouse is potentially liable for the full amount of tax due. 
D) All of the above are false. 
A) If a taxpayer fails to file a return,the statute of limitations is extended to 10 years. 
B) If a couple files a joint return but only one spouse had income,only the spouse with income is responsible for paying any tax due. 
C) Joint and several liability means that each spouse is potentially liable for the full amount of tax due. 
D) All of the above are false.

Question 11

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 12

Identify which of the following statements is false.

Accepted Answer

A) So-called private letter rulings are made public after confidential information is eliminated. 
B) A letter ruling is a written statement issued to a taxpayer by the IRS that interprets and applies the tax laws to that taxpayer's specific set of facts. 
C) Only the taxpayer can appeal the decision of a court of original jurisdiction to the next higher court. 
D) If the Supreme Court decides to hear a case,it grants certiorari. 
A) So-called private letter rulings are made public after confidential information is eliminated. 
B) A letter ruling is a written statement issued to a taxpayer by the IRS that interprets and applies the tax laws to that taxpayer's specific set of facts. 
C) Only the taxpayer can appeal the decision of a court of original jurisdiction to the next higher court. 
D) If the Supreme Court decides to hear a case,it grants certiorari.

Question 13

One of your corporate clients has recently filed for bankruptcy.In the course of the proceedings,you (a)prepare a plan of reorganization that alters the rights of preferred stockholders, (b)notify the company's creditors of an impending bulk transfer of the company's assets, (c)review IRS secured claims against these assets, (d)restructure the company's debt by reducing its principal amount and extending its maturity,and (e)advise the bankruptcy court as to how this restructuring will impact the company's NOLs.Which of these activities,if any,constitutes the unauthorized practice of law?

Accepted Answer

Activities (a), (b),and (c)constitute th

Question 14

Treasury Department Circular 230 regulates the practice of attorneys,CPAs,enrolled agents,and enrolled actuaries before the IRS.

Accepted Answer

A) True 
 B)False

Question 15

On August 13 of the following year,Joy files her current calendar-year tax return and pays the amount due without having requested an extension.The tax shown on her return is $25,000.Her current-year withholding tax is $15,000.Joy pays no estimated taxes and does not claim any tax credits on her current- year return.Calculate the penalties that the IRS is likely to assess.Ignore the penalty for underpayment of estimated taxes.Assume she did not commit fraud.

Accepted Answer

Failure-to

Question 16

Identify which of the following statements is false.

Accepted Answer

A) If fraud is asserted in a tax transaction,the burden of proof falls on the IRS. 
B) The civil fraud penalty consists of 75% of the tax underpayment attributable to fraud plus 25% of the interest payable on the portion of the underpayment resulting from the fraud. 
C) The government must prove its case "beyond a reasonable doubt" in order for the court or jury to convict a taxpayer of criminal fraud. 
D) The fraud penalty can be imposed with respect to income,gift,and estate tax returns. 
A) If fraud is asserted in a tax transaction,the burden of proof falls on the IRS. 
B) The civil fraud penalty consists of 75% of the tax underpayment attributable to fraud plus 25% of the interest payable on the portion of the underpayment resulting from the fraud. 
C) The government must prove its case "beyond a reasonable doubt" in order for the court or jury to convict a taxpayer of criminal fraud. 
D) The fraud penalty can be imposed with respect to income,gift,and estate tax returns.

Question 17

The statute of limitations is unlimited for a tax return that is never filed.

Accepted Answer

A) True 
 B)False

Question 18

A calendar-year individual taxpayer files last year's income tax return on July 1 of the current year.No extension was requested,and there is not a reasonable cause for the late filing.The return shows a balance due of $800 of tax.The late filing penalty is

Accepted Answer

A) $0. 
B) $40. 
C) $80. 
D) $120. 
A) $0. 
B) $40. 
C) $80. 
D) $120.

Question 19

The maximum failure to file penalty is a total of 25% of the underpayment.

Accepted Answer

A) True 
 B)False

Question 20

You are preparing the tax return for Agre Corporation,which has sales of $50 million.Agre made a $2 million expenditure for which the appropriate tax treatment,deductible or capitalizable,is a gray area.The corporation's Chief Financial Officer wants you to deduct the expenditure.What tax compliance issues should you consider in deciding whether to deduct the expenditure?

Accepted Answer

•Will you as the tax return preparer hav

Which of the following activities is protected by accountant-client privilege?

The "Statement on Practice in the Field of Federal Income Taxation" includes all of the following areas of mutual competence except

The statute of limitations,which stipulates the time frame within which either the government or the taxpayer may request a redetermination of tax due,usually expires 6 years after the date on which the return is filed.

According to Circular 230,what should a CPA do upon discovery of an error in a client's prior-year return?

Gerald requests an extension for filing his last year's individual income tax return.His tax liability is $10,000,of which $8,000 was withheld,leaving a balance due of $2,000 when he files on August 1 of the current year.His penalty for failure to pay the tax on time is

Identify which of the following statements is true.

Identify which of the following statements is true.

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.

Treasury Department Circular 230 regulates the practice of attorneys,CPAs,enrolled agents,and enrolled actuaries before the IRS.

Identify which of the following statements is false.

The statute of limitations is unlimited for a tax return that is never filed.

A calendar-year individual taxpayer files last year's income tax return on July 1 of the current year.No extension was requested,and there is not a reasonable cause for the late filing.The return shows a balance due of $800 of tax.The late filing penalty is

The maximum failure to file penalty is a total of 25% of the underpayment.

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

Which of the following activities is protected by accountant-client privilege?

The "Statement on Practice in the Field of Federal Income Taxation" includes all of the following areas of mutual competence except

The statute of limitations,which stipulates the time frame within which either the government or the taxpayer may request a redetermination of tax due,usually expires 6 years after the date on which the return is filed.

According to Circular 230,what should a CPA do upon discovery of an error in a client's prior-year return?

Gerald requests an extension for filing his last year's individual income tax return.His tax liability is $10,000,of which $8,000 was withheld,leaving a balance due of $2,000 when he files on August 1 of the current year.His penalty for failure to pay the tax on time is

Identify which of the following statements is true.

Identify which of the following statements is true.

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.

Treasury Department Circular 230 regulates the practice of attorneys,CPAs,enrolled agents,and enrolled actuaries before the IRS.

Identify which of the following statements is false.

The statute of limitations is unlimited for a tax return that is never filed.

A calendar-year individual taxpayer files last year's income tax return on July 1 of the current year.No extension was requested,and there is not a reasonable cause for the late filing.The return shows a balance due of $800 of tax.The late filing penalty is

The maximum failure to file penalty is a total of 25% of the underpayment.

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