Question 1

Lakeisha,a 1ˢᵗ year staff accountant,was researching a tax issue and found what appears to be the answer to her question in her introductory tax textbook that she bought three years ago.She is thrilled because she thought it would take much longer to find her answer.What type of authority is the textbook? What are other examples of this type of authorities? Can Lakeisha base her research conclusion on the textbook or similar authorities? Any suggestions for Lakeisha?

Accepted Answer

The answer of Lakeisha,a 1ˢᵗ year staff accountant,was researching a...

Question 2

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Accepted Answer

A)  open facts. 
B)  new facts. 
C)  old facts. 
D)  closed facts. 
E)  None of the choices are correct.

Question 3

Lavonda discovered that the 5ᵗʰ Circuit (where Lavonda resides)has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS.Lavonda should choose which of the following trial courts to hear her case?

Accepted Answer

A)  Tax Court only. 
B)  U.S. Court of Federal Claims only. 
C)  U.S. District Court only. 
D)  Tax Court or the U.S. District Court. 
E)  Tax Court or the U.S. Court of Federal Claims.

Question 4

Rowanda could not settle her tax dispute with the IRS at the appeals conference.If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency,Rowanda should litigate in the:

Accepted Answer

A)  U.S. District Court. 
B)  U.S. Circuit Court of Appeals. 
C)  U.S. Court of Federal Claims. 
D)  Tax Court. 
E)  None of the choices are correct.

Question 5

The "90-day" letter gives the taxpayer the opportunity to pay a proposed IRS tax adjustment or file a petition in the U.S.District Court to contest the adjustment and hear the case.

Accepted Answer

A) True 
 B)False

Question 6

If the IRS assesses additional tax on a tax return upon audit,a taxpayer may be subject to interest and penalties on the underpayment.

Accepted Answer

A) True 
 B)False

Question 7

Martin has never filed a 2017 tax return despite earning approximately $20,000 providing landscaping work in the community.In what tax year,will the statute of limitations expire for Martin's 2017 tax return?

Accepted Answer

A)  2020. 
B)  2021. 
C)  2024. 
D)  2025. 
E)  None of the choices are correct.

Question 8

The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S.Senate.

Accepted Answer

A) True 
 B)False

Question 9

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question.Which trial level court would she prefer to have issued the opinion?

Accepted Answer

A)  Tax Court. 
B)  District Court. 
C)  Circuit Court. 
D)  Divorce Court. 
E)  None of the choices are correct.

Question 10

As required by the Constitution,all tax bills are supposed to originate in the House of Representatives.

Accepted Answer

A) True 
 B)False

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Leslie made a mathematical mistake in computing her tax liability.Which audit program will likely catch Leslie's mistake?

Accepted Answer

A)  DIF System. 
B)  Mathematical correction. 
C)  Document perfection. 
D)  Information matching. 
E)  None of the choices are correct.

Question 13

Hong,an introductory tax student,is beginning his first research project.He has a complete understanding of the relevant facts for his project and has identified the initial research questions.He is now ready to begin using a tax service to identify relevant authorities.What are some suggestions for him on how to use tax services to identify relevant authorities?

Accepted Answer

The answer of Hong,an introductory tax student,is beginning his first...

Question 14

Which of the following audits is the most common and typically less comprehensive?

Accepted Answer

A)  Correspondence. 
B)  Random. 
C)  Office. 
D)  Field. 
E)  None of the choices are correct.

Question 15

If a taxpayer loses a case at the Circuit Court level,he is granted an automatic appeal hearing with the Supreme Court.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following committees typically initiates tax legislation?

Accepted Answer

A)  House Ways and Means Committee. 
B)  Joint Conference Committee. 
C)  Senate Finance Committee. 
D)  Senate Tax Committee. 
E)  None of the choices are correct.

Question 17

A client has recently learned of a proposed tax bill that would increase the tax rates on investment gains by 5 percent.The President does not support this increase.Please describe for your client the process by which new tax legislation is created and how the President's disapproval may influence the enactment of the bill.

Accepted Answer

The answer of A client has recently learned of a...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  AICPA Code of Professional Conduct. 
B)  Statements on Standards for Tax Services. 
C)  Circular 230. 
D)  State Board of Accountancy statutes. 
E)  None of the choices are correct.

Question 20

The IRS DIF system checks each tax return for mathematical mistakes and errors.

Accepted Answer

A) True 
 B)False

Exam 2: Tax Compliance, The IRS and Tax Authorities

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Lavonda discovered that the 5ᵗʰ Circuit (where Lavonda resides) has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS.Lavonda should choose which of the following trial courts to hear her case?

Rowanda could not settle her tax dispute with the IRS at the appeals conference.If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency,Rowanda should litigate in the:

The "90-day" letter gives the taxpayer the opportunity to pay a proposed IRS tax adjustment or file a petition in the U.S.District Court to contest the adjustment and hear the case.

If the IRS assesses additional tax on a tax return upon audit,a taxpayer may be subject to interest and penalties on the underpayment.

Martin has never filed a 2017 tax return despite earning approximately $20,000 providing landscaping work in the community.In what tax year,will the statute of limitations expire for Martin's 2017 tax return?

The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S.Senate.

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question.Which trial level court would she prefer to have issued the opinion?

As required by the Constitution,all tax bills are supposed to originate in the House of Representatives.

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.

Leslie made a mathematical mistake in computing her tax liability.Which audit program will likely catch Leslie's mistake?

Which of the following audits is the most common and typically less comprehensive?

If a taxpayer loses a case at the Circuit Court level,he is granted an automatic appeal hearing with the Supreme Court.

Which of the following committees typically initiates tax legislation?

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

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

The IRS DIF system checks each tax return for mathematical mistakes and errors.