Question 1

The Wage and Investment Office of the IRS handles small business taxpayers.

Accepted Answer

A) True 
 B)False

Question 2

Mark with a "Yes" if the following statement is true and is in Publication 1, The Taxpayer Bill of Rights. Mark with a "No" if the following statement is false or is not addressed in Publication 1. ​
A)A phone number to call to have tax questions answered.
B)If a taxpayer is unable to provide or to verify information, then the IRS may contact a neighbor, bank, employer, or employees in order to obtain the information.
C)Only the taxpayer has the right to represent themselves in front of the IRS.
D)Publication 1 explains what to do if an IRS employee has not provided prompt, courteous, and professional assistance to the taxpayer.

Accepted Answer

A. YES
b.

Question 3

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

Accepted Answer

A) True 
 B)False

Question 4

What is the difference between tax avoidance and tax evasion?

Accepted Answer

Tax avoidance consists of usin

Question 5

Which of the following will not affect the statute of limitations on a tax return?

Accepted Answer

A) Omission of a significant amount of gross income 
B) Mutual consent of the IRS and the taxpayer 
C) Failure to pay the tax due with the tax return 
D) Failure to file a tax return 
E) Filing a fraudulent tax return 
A) Omission of a significant amount of gross income 
B) Mutual consent of the IRS and the taxpayer 
C) Failure to pay the tax due with the tax return 
D) Failure to file a tax return 
E) Filing a fraudulent tax return

Question 6

Which of the following is the most common type of audit for an individual taxpayer?

Accepted Answer

A) Office audit 
B) Telephone audit 
C) Correspondence audit 
D) Field audit 
E) None of the above 
A) Office audit 
B) Telephone audit 
C) Correspondence audit 
D) Field audit 
E) None of the above

Question 7

Tax practitioners can be assessed a penalty for promoting an abusive tax shelter.

Accepted Answer

A) True 
 B)False

Question 8

If a calendar year taxpayer's 2016 individual income tax return is mailed on June 15, 2017, the statute of limitations would normally run out on:

Accepted Answer

A) June 15, 2019 
B) June 15, 2020 
C) April 15, 2019 
D) April 15, 2020 
E) None of the above 
A) June 15, 2019 
B) June 15, 2020 
C) April 15, 2019 
D) April 15, 2020 
E) None of the above

Question 9

Which of the following is not a type of IRS audit?

Accepted Answer

A) Office audit 
B) Field audit 
C) Correspondence audit 
D) Operational audit 
E) All of the above are types of IRS audits 
A) Office audit 
B) Field audit 
C) Correspondence audit 
D) Operational audit 
E) All of the above are types of IRS audits

Question 10

Which of the following statements best describes the purpose of the Taxpayer Bill of Rights?

Accepted Answer

A) To provide the IRS with additional enforcement powers 
B) To grant to taxpayers the right to choose the time and method of payment of delinquent taxes 
C) To inform taxpayers of their rights in dealing with the IRS 
D) To inform taxpayers of the methods for properly completing their income tax returns 
E) None of the above 
A) To provide the IRS with additional enforcement powers 
B) To grant to taxpayers the right to choose the time and method of payment of delinquent taxes 
C) To inform taxpayers of their rights in dealing with the IRS 
D) To inform taxpayers of the methods for properly completing their income tax returns 
E) None of the above

Question 11

Which of the following taxpayers will benefit most in terms of dollars saved as a result of tax planning to reduce taxes?

Accepted Answer

A) An individual taxpayer who has a marginal tax rate of 28 percent. 
B) An individual taxpayer who has an average tax rate of 28 percent. 
C) An individual taxpayer who has a marginal tax rate of 15 percent. 
D) The taxpayers in a.and b.will benefit equally. 
E) None of the above. 
A) An individual taxpayer who has a marginal tax rate of 28 percent. 
B) An individual taxpayer who has an average tax rate of 28 percent. 
C) An individual taxpayer who has a marginal tax rate of 15 percent. 
D) The taxpayers in a.and b.will benefit equally. 
E) None of the above.

Question 12

Which of the following is not a possible result of an audit by the IRS?

Accepted Answer

A) Payment of a refund to the taxpayer 
B) Payment of a deficiency by the taxpayer 
C) An appeal 
D) No change in the liability 
E) All of the above are possible results 
A) Payment of a refund to the taxpayer 
B) Payment of a deficiency by the taxpayer 
C) An appeal 
D) No change in the liability 
E) All of the above are possible results

Question 13

A tax return with a large casualty loss would be most likely selected for audit through:

Accepted Answer

A) The Discriminant Function System 
B) Information from an informant 
C) Information from another governmental agency 
D) The Taxpayer Compliance Measurement Program 
E) None of the above 
A) The Discriminant Function System 
B) Information from an informant 
C) Information from another governmental agency 
D) The Taxpayer Compliance Measurement Program 
E) None of the above

Question 14

Match the following titles with their descriptions:
​a. Commissioner of Internal Revenue
b. IRS Campus Processing Site
c. Large Business and International Division
d. Small Business/Self-Employed Division
e. Wage & Investment Division
1. Services taxpayers with assets of $10 million or more
2. Services taxpayers who pay most of their taxes through withholding
3. Establishes policy, supervises the activities of the organization, and acts in an advisory capacity to the Treasury Department on legislative matters
4. Services individuals who file Form 1040 Schedules, C, E, or F
5. Processes the information from tax documents

Accepted Answer

ANSWER: a.

Question 15

In the following independent situations, is it better to make an installment agreement with the IRS, an offer in compromise with the IRS, or ask for an extension of time to pay any taxes owed?
a.A taxpayer is unlikely to pay the tax amount they owe.
b.Using monthly payments, a taxpayer can afford to pay off the tax owed within 2 years.
c.A taxpayer can pay off their tax owed when they sell their boat which is up for sale.

Accepted Answer

a. An offer in compromise
b. I

Question 16

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

Accepted Answer

A) True 
 B)False

Question 17

If a taxpayer makes all of his income from his job and various investments, which office of the IRS would likely investigate his return if it were audited?

Accepted Answer

A) Wage & Investment Division (W&I) 
B) Large & Midsize Business Office 
C) Small Business Office 
D) Criminal Investigation Office 
E) None of the above offices would perform the audit 
A) Wage & Investment Division (W&I) 
B) Large & Midsize Business Office 
C) Small Business Office 
D) Criminal Investigation Office 
E) None of the above offices would perform the audit

Question 18

Which of the following is not a preparer penalty?

Accepted Answer

A) Tax preparers may be assessed a penalty for failing to give the taxpayer the preparer's workpapers. 
B) Tax preparers may be assessed a penalty for failing to keep a copy of the prepared return. 
C) Tax preparers may be assessed a penalty for endorsing or cashing a refund check issued to a taxpayer. 
D) Tax preparers may be assessed a penalty for failing to sign a tax return. 
A) Tax preparers may be assessed a penalty for failing to give the taxpayer the preparer's workpapers. 
B) Tax preparers may be assessed a penalty for failing to keep a copy of the prepared return. 
C) Tax preparers may be assessed a penalty for endorsing or cashing a refund check issued to a taxpayer. 
D) Tax preparers may be assessed a penalty for failing to sign a tax return.

Question 19

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 20

List three things that a preparer needs to do in order to participate in the Annual Filing Season Program.

Accepted Answer

1. Obtain a preparer tax identification

The Wage and Investment Office of the IRS handles small business taxpayers.

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

What is the difference between tax avoidance and tax evasion?

Which of the following will not affect the statute of limitations on a tax return?

Which of the following is the most common type of audit for an individual taxpayer?

Tax practitioners can be assessed a penalty for promoting an abusive tax shelter.

If a calendar year taxpayer's 2016 individual income tax return is mailed on June 15, 2017, the statute of limitations would normally run out on:

Which of the following is not a type of IRS audit?

Which of the following statements best describes the purpose of the Taxpayer Bill of Rights?

Which of the following taxpayers will benefit most in terms of dollars saved as a result of tax planning to reduce taxes?

Which of the following is not a possible result of an audit by the IRS?

A tax return with a large casualty loss would be most likely selected for audit through:

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

If a taxpayer makes all of his income from his job and various investments, which office of the IRS would likely investigate his return if it were audited?

Which of the following is not a preparer penalty?

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

List three things that a preparer needs to do in order to participate in the Annual Filing Season Program.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Filters

Exam 12: Tax Administration and Tax Planning

The Wage and Investment Office of the IRS handles small business taxpayers.

Tax evasion involves the use of illegal methods to reduce or avoid income tax.

What is the difference between tax avoidance and tax evasion?

Which of the following will not affect the statute of limitations on a tax return?

Which of the following is the most common type of audit for an individual taxpayer?

Tax practitioners can be assessed a penalty for promoting an abusive tax shelter.

If a calendar year taxpayer's 2016 individual income tax return is mailed on June 15, 2017, the statute of limitations would normally run out on:

Which of the following is not a type of IRS audit?

Which of the following statements best describes the purpose of the Taxpayer Bill of Rights?

Which of the following taxpayers will benefit most in terms of dollars saved as a result of tax planning to reduce taxes?

Which of the following is not a possible result of an audit by the IRS?

A tax return with a large casualty loss would be most likely selected for audit through:

The IRS charges a fixed 10 percent interest rate on underpayments of taxes.

If a taxpayer makes all of his income from his job and various investments, which office of the IRS would likely investigate his return if it were audited?

Which of the following is not a preparer penalty?

A taxpayer's average tax rate is determined by dividing the total tax paid by the total income of the taxpayer.

List three things that a preparer needs to do in order to participate in the Annual Filing Season Program.

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Filters