Question 1

Does the tax preparer enjoy an "attorney-client privilege" of confidentiality with his or her clients?

Accepted Answer

A limited confidentiality privilege is g

Question 2

The AICPA's Statements on Standards for Tax Services must be followed its members; they are more than merely advisory.

Accepted Answer

A) True 
 B)False

Question 3

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s).

Accepted Answer

A)  No return at all is filed. 
B)  An investment in a marketable security is worthless. 
C)  Taxpayer inadvertently omits an amount of gross income equal to 30% of the gross income stated on the return. 
D)  Taxpayer discovers an inadvertent overstatement of deductions equal to 30% of gross income. 
A)  No return at all is filed. 
B)  An investment in a marketable security is worthless. 
C)  Taxpayer inadvertently omits an amount of gross income equal to 30% of the gross income stated on the return. 
D)  Taxpayer discovers an inadvertent overstatement of deductions equal to 30% of gross income.

Question 4

Leo underpaid his taxes by $250,000. Portions of the underpayment were attributable to negligence ($90,000) and to civil fraud ($160,000). Compute the total penalties incurred.

Accepted Answer

@#IMG-DLM& If the underpayment is partia

Question 5

Last year, Ned's property tax deduction on his residence was $22,500. Although he lives in the same house, he tells his CPA that this year's taxes will be only $7,500. The CPA can use this estimate in computing Ned's itemized deductions, under the Statements of Standards for Tax Services.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Yin-Li is the preparer of the Form 1120 for Cloves Corporation. On the return, Cloves claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Yin-Li in each of the following independent situations.

Accepted Answer

The potential § 6694 penalty does not de

Question 8

The taxpayer can avoid a valuation penalty for overstating the value of the charitable contribution of an artwork by showing that the deduction claimed was based on a qualified ____________________.

Accepted Answer

The answer of The taxpayer can avoid a valuation penalty...

Question 9

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 show that the actual value of the property is $50,000. Arnold is in the 35% income tax bracket. Determine Arnold's amount due for both tax and any penalty.

Accepted Answer

The § 6662 penalty applies when the tax

Question 10

Concerning a taxpayer's requirement to make quarterly estimated tax payments:

Accepted Answer

A)  An individual must make estimated payments if his or her balance due for the Federal income tax for the year will exceed $1,000. 
B)  The due dates of the payments for a calendar-year C corporation are March, June, September, and December 15. 
C)  A C corporation must make estimated payments if its Federal income tax liability for the year will exceed $250. 
D)  A trust is not required to make estimated payments. 
A)  An individual must make estimated payments if his or her balance due for the Federal income tax for the year will exceed $1,000. 
B)  The due dates of the payments for a calendar-year C corporation are March, June, September, and December 15. 
C)  A C corporation must make estimated payments if its Federal income tax liability for the year will exceed $250. 
D)  A trust is not required to make estimated payments.

Question 11

In connection with the taxpayer penalty for substantial understatement of tax liability, what defenses (if any) are available?

Accepted Answer

The defenses to the

Question 12

Circular 230 applies to all tax practitioners. This includes attorneys, CPAs, and enrolled agents, even though each of the groups has its own code of conduct.

Accepted Answer

A) True 
 B)False

Question 13

Maria and Miguel Blanco are in the midst of negotiating a divorce. Because both parties are unwilling to share any current financial information, their joint Form 1040 for 2011 is not filed until October 31, 2012, when the respective divorce attorneys forced them to cooperate. The Blancos should not be subject to any Federal late-filing penalties, because of the reasonable cause exception.

Accepted Answer

A) True 
 B)False

Does the tax preparer enjoy an "attorney-client privilege" of confidentiality with his or her clients?

The AICPA's Statements on Standards for Tax Services must be followed its members; they are more than merely advisory.

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s).

Leo underpaid his taxes by $250,000. Portions of the underpayment were attributable to negligence ($90,000) and to civil fraud ($160,000). Compute the total penalties incurred.

Last year, Ned's property tax deduction on his residence was $22,500. Although he lives in the same house, he tells his CPA that this year's taxes will be only $7,500. The CPA can use this estimate in computing Ned's itemized deductions, under the Statements of Standards for Tax Services.

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

Yin-Li is the preparer of the Form 1120 for Cloves Corporation. On the return, Cloves claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Yin-Li in each of the following independent situations.

The taxpayer can avoid a valuation penalty for overstating the value of the charitable contribution of an artwork by showing that the deduction claimed was based on a qualified ____________________.

Concerning a taxpayer's requirement to make quarterly estimated tax payments:

In connection with the taxpayer penalty for substantial understatement of tax liability, what defenses (if any) are available?

Circular 230 applies to all tax practitioners. This includes attorneys, CPAs, and enrolled agents, even though each of the groups has its own code of conduct.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 17: Tax Practice and Ethics

Does the tax preparer enjoy an "attorney-client privilege" of confidentiality with his or her clients?

The AICPA's Statements on Standards for Tax Services must be followed its members; they are more than merely advisory.

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s).

Leo underpaid his taxes by $250,000. Portions of the underpayment were attributable to negligence ($90,000) and to civil fraud ($160,000). Compute the total penalties incurred.

Last year, Ned's property tax deduction on his residence was $22,500. Although he lives in the same house, he tells his CPA that this year's taxes will be only $7,500. The CPA can use this estimate in computing Ned's itemized deductions, under the Statements of Standards for Tax Services.

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

Yin-Li is the preparer of the Form 1120 for Cloves Corporation. On the return, Cloves claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Yin-Li in each of the following independent situations.

The taxpayer can avoid a valuation penalty for overstating the value of the charitable contribution of an artwork by showing that the deduction claimed was based on a qualified ____________________.

Concerning a taxpayer's requirement to make quarterly estimated tax payments:

In connection with the taxpayer penalty for substantial understatement of tax liability, what defenses (if any) are available?

Circular 230 applies to all tax practitioners. This includes attorneys, CPAs, and enrolled agents, even though each of the groups has its own code of conduct.

Understanding and Working With the Federal Tax Law

Corporations: Introduction and Operating Rules

Corporations: Special Situations

Corporations: Organization and Capital Structure

Corporations: Earnings 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

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters