Exam 17: Tax Practice and Ethics

Which statement appearing below does not correctly describe the IRS letter ruling process?

The Code's scope of privileged communications for a CPA extends only to ____________________ advice given.

If the taxpayer refuses to pay an assessed tax, the IRS can seize taxpayer property under the ____________________ process.

Which of the following statements is incorrect as to the conduct of IRS income tax audits?

A(n) ____________________ should be requested when the taxpayer wants to know the IRS interpretation of how the tax law will be applied to a proposed transaction.

Vera is audited by the IRS for several tax years. Her returns were prepared by the following parties. Which of the following statements is correct?

Keepert uses "two sets of books." She only reports one-half of her cash sales on the records that she uses to complete her Federal income tax return. The statute of limitations for Keepert's return is six years.

Recently, the overall Federal income tax audit rate for individual returns has been about 3%.

Describe the following written determinations that are issued by the IRS.

Jake, 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(n) ___________________ member is required to follow the Statements of Standards for Tax Services in conducting a tax practice.

To file for a tax refund, an individual generally uses Form ____________________.

The ____________________, a presidential appointee, is the "IRS attorney."

A tax professional needs to know how the IRS is structured and how it works to carry out its mission. Evaluate this statement.

A taxpayer can be subject to both ____________________ and ____________________ penalties for tax misconduct. or

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

An IRS letter ruling might determine that an employee's compensation is unreasonable in amount.

A VITA volunteer is exempted from the Code's tax preparer penalties.

The Chief Counsel of the IRS is appointed by the:

Circular 230 requires that the tax practitioner use the "best practices" of the tax profession in carrying out a tax engagement. Specify what some of these best practices entail.