Exam 2: Tax Compliance , the Irs, and Tax Authorities

For which of the following tax violations is a civil penalty not imposed on taxpayers?

Which of the following has the highest authoritative weight?

A taxpayer can avoid a substantial understatement of tax penalty:

Which of the following is not a source of a tax practitioner's professional responsibilities?

Secondary authorities are official sources of the tax law with a lesser "weight" than primary authorities.

Roddy was researching an issue and found a favorable Tax Court decision that addresses his issue. He also determined that there was a nonacquiescence for the case. Who issued the nonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Greg earned $20,500 this year and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg will have a total tax liability of $1,000 (and thus will receive a $500) refund, he:

Which of the following audits is the least common, broadest in scope, and typically most complex?

Andy filed a fraudulent 2016 tax return on May 1, 2017. The statute of limitations for IRS assessment on Andy's 2016 tax return should end:

Which of the following committees typically initiates tax legislation?

Generally, code sections are arranged (grouped together):

Joel reported a high amount of charitable contributions as a deduction on his individual tax return relative to taxpayers with similar income levels. The information matching program is the IRS program most likely to identify Joel's tax return for audit.

Ramon's tax return was randomly selected for audit. Which IRS program likely selected Ramon's return for audit?

Chris and Chuck were recently debating whether the Internal Revenue Code is "logical." Chris offers that she has briefly reviewed the Code and could hardly understand its organizational structure, if there is one. Please describe the basic organization of the code and how understanding its organization may be especially beneficial to the tax researcher.

Which of the following is not considered a secondary authority?

The Internal Revenue Code of 1986 is the name of the current income tax code of the United States of America.

Mel recently received a 30-day letter from the IRS. Although his tax return being audited has several potential large issues (potential tax consequences of $70,000 - $80,000), the IRS agent auditing his return only identified one item that will require a modest adjustment of $10,000. Mel feels strongly that the $10,000 adjustment would not hold up in court and was surprised that the IRS agent did not identify some of the other potential larger issues. What are Mel's choices with respect to the 30-day letter and what factors should influence his decisions?

Proposed and Temporary Regulations have the same authoritative weight.

For the 2016 tax returns, indicate when the statute of limitation expires and why. a. Simon filed his tax return on April 10, 2017. b. Billy and Barbara filed their tax returns late on December 1, 2017. c. Pearson earns a living through various illegal activities. He filed his tax return on March 14, 2017 but did not report his illegal income on his tax return. d. Luther filed his tax return on July 17, 2017 but has accidentally underreported his taxable gross income by 20%.

Caitlin is a tax manager for an accounting firm, and Duff is a first year staff accountant. Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.