Question 1

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 2

Linda's individual tax return for the current year is subject to an IRS audit.The IRS assesses a $10,000 deficiency,$4,000 of which is due to Linda's negligence.What is Linda's negligence penalty?

Accepted Answer

The negligence penalty is $800

Question 3

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

Accepted Answer

A) TCMP. 
B) DIF program. 
C) instant audit program. 
D) 1040 program. 
A) TCMP. 
B) DIF program. 
C) instant audit program. 
D) 1040 program.

Question 4

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 5

Paul's tax liability for last year was $30,000.Paul projects that his tax for this year will be $40,000.Paul is self-employed and,thus,will have no withholding.His AGI for last year did not exceed $150,000.How much estimated tax should Paul pay for this year to avoid the penalty for underpayment of estimated taxes?

Accepted Answer

Because Paul's AGI for last ye

Question 6

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 7

Identify which of the following statements is false.

Accepted Answer

A) Interest is imposed on any tax not paid by the due date of the return (determined without regard to extensions). 
B) Interest is charged on underpayments,or paid on overpayments,at a rate of three percentage points higher than the federal short-term rate. 
C) Interest on underpayments is calculated using daily compounding and covers a time period from the original due date of the return until the date of payment. 
D) Any tax not paid by the due date for the return is subject to an interest charge. 
A) Interest is imposed on any tax not paid by the due date of the return (determined without regard to extensions). 
B) Interest is charged on underpayments,or paid on overpayments,at a rate of three percentage points higher than the federal short-term rate. 
C) Interest on underpayments is calculated using daily compounding and covers a time period from the original due date of the return until the date of payment. 
D) Any tax not paid by the due date for the return is subject to an interest charge.

Question 8

The 90-day letter (Statutory Notice of Deficiency)gives the taxpayer 90 days to file a petition with the Tax Court or to pay the disputed tax.

Accepted Answer

A) True 
 B)False

Question 9

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

Accepted Answer

A) The return contains an understatement of tax attributable to the erroneous item(s)of an individual filing it. 
B) The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C) The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D) Based on all the facts and circumstances,holding the other individual for the deficiency would be inequitable. 
A) The return contains an understatement of tax attributable to the erroneous item(s)of an individual filing it. 
B) The request for innocent spouse relief is made no later than one year after the IRS begins its collection efforts. 
C) The requesting individual establishes that he or she neither knew nor had reason to know of any or all of the understatement. 
D) Based on all the facts and circumstances,holding the other individual for the deficiency would be inequitable.

Question 10

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

Question 11

Identify which of the following statements is false.

Accepted Answer

A) The IRS issues annually a revenue procedure that prescribes how a letter ruling should be requested and the information to be contained in the ruling request. 
B) The request for a ruling may contain a suggested conclusion (or answer)that the taxpayer proposes that the IRS adopt in the described situation. 
C) As a practical consideration,taxpayers always find it preferable to obtain an advance ruling on questionable tax situations. 
D) Third parties may not cite private letter rulings as authority for the tax consequences of their transactions. 
A) The IRS issues annually a revenue procedure that prescribes how a letter ruling should be requested and the information to be contained in the ruling request. 
B) The request for a ruling may contain a suggested conclusion (or answer)that the taxpayer proposes that the IRS adopt in the described situation. 
C) As a practical consideration,taxpayers always find it preferable to obtain an advance ruling on questionable tax situations. 
D) Third parties may not cite private letter rulings as authority for the tax consequences of their transactions.

Question 12

For innocent spouse relief to apply,five conditions must be met.Explain them.

Accepted Answer

Five condi

Question 13

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 14

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

Accepted Answer

A taxpayer should initially look to prim

Question 15

Which one of the following statements about letter rulings is false?

Accepted Answer

A) If a taxpayer requests and pays for a ruling,the IRS must respond to his request by issuing a ruling. 
B) A ruling is a response to a taxpayer's specific set of facts. 
C) Rulings become public information. 
D) The IRS issues revenue procedures periodically,which prescribe the information that must be supplied with a ruling request. 
A) If a taxpayer requests and pays for a ruling,the IRS must respond to his request by issuing a ruling. 
B) A ruling is a response to a taxpayer's specific set of facts. 
C) Rulings become public information. 
D) The IRS issues revenue procedures periodically,which prescribe the information that must be supplied with a ruling request.

Question 16

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 17

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

Accepted Answer

If the IRS fails to send an individual t

Question 18

Identify which of the following statements is true.

Accepted Answer

A) The "innocent spouse provision," if applicable,relieves both spouses from an assessment of tax caused by a spouse's understating income or gain and/or overstating deductions,losses,or credits. 
B) The IRS is precluded from assessing any residual tax liability against transferees and fiduciaries because the initial filers are responsible for meeting the tax payments in a timely fashion. 
C) Treasury Department Circular 230 regulates the practice of attorneys,CPAs,enrolled agents,and enrolled actuaries before the IRS. 
D) All of the above are false. 
A) The "innocent spouse provision," if applicable,relieves both spouses from an assessment of tax caused by a spouse's understating income or gain and/or overstating deductions,losses,or credits. 
B) The IRS is precluded from assessing any residual tax liability against transferees and fiduciaries because the initial filers are responsible for meeting the tax payments in a timely fashion. 
C) Treasury Department Circular 230 regulates the practice of attorneys,CPAs,enrolled agents,and enrolled actuaries before the IRS. 
D) All of the above are false.

Question 19

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 20

Which of the following communications between an accountant and client are privileged?
a)During the preparation of her 2008 tax return,Tammy informs her accountant that she contributed $25,000 to a qualified charitable organization.
b)After filing his tax return,a client mentions to his accountant that he forgot to report a $7,000 prize that he won playing bingo.He asks how he should correct the error.
c)A client tells his accountant that he will no longer pay alimony to his ex-wife.

Accepted Answer

Only communication (b)is privileged beca

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.

Linda's individual tax return for the current year is subject to an IRS audit.The IRS assesses a $10,000 deficiency,$4,000 of which is due to Linda's negligence.What is Linda's negligence penalty?

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

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.

Identify which of the following statements is false.

Identify which of the following statements is false.

The 90-day letter (Statutory Notice of Deficiency)gives the taxpayer 90 days to file a petition with the Tax Court or to pay the disputed tax.

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

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

Identify which of the following statements is false.

For innocent spouse relief to apply,five conditions must be met.Explain them.

Identify which of the following statements is false.

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

Which one of the following statements about letter rulings is false?

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?

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

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 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.

Linda's individual tax return for the current year is subject to an IRS audit.The IRS assesses a $10,000 deficiency,$4,000 of which is due to Linda's negligence.What is Linda's negligence penalty?

The program specifically designed to identify returns with a high potential for a deficiency assessment is the

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.

Identify which of the following statements is false.

Identify which of the following statements is false.

The 90-day letter (Statutory Notice of Deficiency)gives the taxpayer 90 days to file a petition with the Tax Court or to pay the disputed tax.

All of the following requirements must be met in order to establish innocent spouse relief except which of the following?

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

Identify which of the following statements is false.

For innocent spouse relief to apply,five conditions must be met.Explain them.

Identify which of the following statements is false.

How does a taxpayer determine if "substantial authority" exists for a tax treatment the taxpayer desires to adopt?

Which one of the following statements about letter rulings is false?

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?

Explain one of the two exceptions to imposing interest from the original due date of the tax return until the date the tax deficiency is paid.

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