Question 1

Which of the following types of audits was suspended due to protests from taxpayers and lawmakers?

Accepted Answer

A) Discriminant Function System selected audit 
B) Taxpayer Compliance Measurement Program selected audit 
C) Correspondence audit 
D) Office audit 
E) None of the above 
A) Discriminant Function System selected audit 
B) Taxpayer Compliance Measurement Program selected audit 
C) Correspondence audit 
D) Office audit 
E) None of the above

Question 2

List three different ways that a tax return may be selected for an audit.

Accepted Answer

Any of the following will suffice:
1. By

Question 3

The tax law contains a penalty for filing a "frivolous" tax return.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements best describes the process of tax planning?

Accepted Answer

A) Tax planning is equivalent to tax evasion. 
B) Tax planning is the avoidance of "tax traps." 
C) Tax planning is the process of arranging one's financial affairs to minimize one's overall tax liability. 
D) Tax planning is the deferral of tax on income. 
E) Tax planning is the calculation of a taxpayer's marginal rate of tax. 
A) Tax planning is equivalent to tax evasion. 
B) Tax planning is the avoidance of "tax traps." 
C) Tax planning is the process of arranging one's financial affairs to minimize one's overall tax liability. 
D) Tax planning is the deferral of tax on income. 
E) Tax planning is the calculation of a taxpayer's marginal rate of tax.

Question 5

Which of the following is false regarding the return audit process?

Accepted Answer

A) The higher DIF score a return gets, the higher the likelihood for audit. 
B) An office audit is performed at an IRS office. 
C) 50 percent of taxpayers are audited every year. 
D) None of the above is false. 
A) The higher DIF score a return gets, the higher the likelihood for audit. 
B) An office audit is performed at an IRS office. 
C) 50 percent of taxpayers are audited every year. 
D) None of the above is false.

Question 6

What type of audit (office, field or correspondence) is demonstrated in the following examples?
a.An IRS agent views Microsoft's books and records at the Microsoft headquarters.
b.Susie receives a letter from the IRS asking her to provide documentation to support her charitable contributions on her tax return filed in the prior year.
c.Mr.and Mrs.John Doe are asked to bring their supporting documents to the downtown IRS office so that an IRS agent may review their tax return which was filed 2 years ago.

Accepted Answer

a. Field audit
b. Co

Question 7

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

Accepted Answer

A) True 
 B)False

Which of the following types of audits was suspended due to protests from taxpayers and lawmakers?

List three different ways that a tax return may be selected for an audit.

The tax law contains a penalty for filing a "frivolous" tax return.

Which of the following statements best describes the process of tax planning?

Which of the following is false regarding the return audit process?

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

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

Which of the following types of audits was suspended due to protests from taxpayers and lawmakers?

List three different ways that a tax return may be selected for an audit.

The tax law contains a penalty for filing a "frivolous" tax return.

Which of the following statements best describes the process of tax planning?

Which of the following is false regarding the return audit process?

As a result of an IRS audit, a taxpayer may be required to pay additional taxes, but he or she is never paid a refund.

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