Question 1

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 2

Kim has decided to litigate a tax issue with the IRS. Describe the trial level courts that Kim may use to litigate the case.

Accepted Answer

The answer of Kim has decided to litigate a tax...

Question 3

Temporary Regulations have more authoritative weight than revenue rulings.

Accepted Answer

A) True 
 B)False

Question 4

Tina has a very complex tax return and it looks like she will not be able to file her tax return by its due date. When is her tax return due? What are Tina's options for paying her tax due and filing her tax return this year? What are the consequences if Tina does not file or pay her tax timely? Be specific.

Accepted Answer

The answer of Tina has a very complex tax return...

Question 5

Lindy, a tax intern, is beginning her first tax research case for her employer. Her manager has given her a basic understanding of the facts and has identified the basic research question. Lindy is now ready to begin searching for relevant tax authorities. Describe the different types of research tools available to help a tax researcher locate relevant authority and identify which type may be especially useful for Lindy.

Accepted Answer

The answer of Lindy, a tax intern, is beginning her...

Question 6

Kodak is a beginning tax researcher. He knows that the 1^st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project, and any advice that may help Kodak.

Accepted Answer

The answer of Kodak is a beginning tax researcher. He...

Question 7

Generally, code sections are arranged (grouped together):

Accepted Answer

A)  chronologically. 
B)  by topic. 
C)  randomly. 
D)  by length. 
E)  None of the choices are correct.

Question 8

Henry filed his 2018 tax return on May 15th, 2019. The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Accepted Answer

A)  May 15th, 2021. 
B)  April 15th, 2021. 
C)  May 15th, 2022. 
D)  April 15th, 2022. 
E)  None of the choices are correct.

Question 9

Mary Ann is working on a pretty big research project. Her manager has alerted her to the possibility that some of her research questions are likely to be questions of fact, whereas others are likely to be questions of law. Explain the difference between the two types of questions and how this would influence her research.

Accepted Answer

The answer of Mary Ann is working on a pretty...

Question 10

Josephine is considering taking a 6-month rotation in Paris for her job. Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

Accepted Answer

A)  Determination letter. 
B)  Private letter ruling. 
C)  Tax treaty. 
D)  Regulation. 
E)  Revenue procedure.

Question 11

Raul was researching an issue and found two Tax Court decisions issued within 6 months of each other, one for a taxpayer residing in California and the other for a taxpayer residing in New York whose rulings were inconsistent. Raul knows that the federal tax law does not differ by state and the issue was exactly the same in both cases. Raul is confused because he thought that a basic judicial doctrine was that a court is supposed to rule consistently. Name and describe this judicial doctrine that requires judicial consistency and discuss why the Tax Court may have intentionally ruled inconsistently in this example.

Accepted Answer

The answer of Raul was researching an issue and found...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Which of the following has the highest authoritative weight?

Accepted Answer

A)  Legislative regulation. 
B)  Private letter ruling. 
C)  Revenue ruling. 
D)  Action on decision. 
E)  Revenue procedure.

Question 14

A tax practitioner can avoid IRS penalty relating to a tax return position:

Accepted Answer

A)  if the position is frivolous and disclosed on the tax return. 
B)  if the position has a realistic possibility of being sustained by the IRS or courts. 
C)  if there is substantial authority to support the position. 
D)  if the position has a reasonable basis and is not disclosed on the tax return. 
E)  None of the choices are correct.

Question 15

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.

Accepted Answer

A) True 
 B)False

Question 16

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic is single, 30 years old, and will have zero tax liability this year, he:

Accepted Answer

A)  is required to file a tax return. 
B)  is not required to file a tax return but should file a return anyway. 
C)  is required to file a tax return but should not file because he owes no tax. 
D)  is not required to file a tax return and should not file a return. 
E)  None of the choices are correct.

Question 17

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

Accepted Answer

A)  May 1st, 2022. 
B)  April 15th, 2022. 
C)  May 1st, 2025. 
D)  April 15th, 2025. 
E)  None of the choices are correct.

Question 18

The three basic types of IRS examinations are computer exams, office exams, and business exams.

Accepted Answer

A) True 
 B)False

Question 19

Campbell was researching a tax issue and found a favorable Tax Court opinion and an IRC Code Section that appears to answer the question. Is she finished with the research process? If so, why? If not, what must she do?

Accepted Answer

The answer of Campbell was researching a tax issue and...

Question 20

A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her tax return position.

Accepted Answer

A) True 
 B)False

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

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

Kim has decided to litigate a tax issue with the IRS. Describe the trial level courts that Kim may use to litigate the case.

Temporary Regulations have more authoritative weight than revenue rulings.

Kodak is a beginning tax researcher. He knows that the 1^st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project, and any advice that may help Kodak.

Generally, code sections are arranged (grouped together) :

Henry filed his 2018 tax return on May 15^th, 2019. The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Josephine is considering taking a 6-month rotation in Paris for her job. Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

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

Which of the following has the highest authoritative weight?

A tax practitioner can avoid IRS penalty relating to a tax return position:

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic is single, 30 years old, and will have zero tax liability this year, he:

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

The three basic types of IRS examinations are computer exams, office exams, and business exams.

Campbell was researching a tax issue and found a favorable Tax Court opinion and an IRC Code Section that appears to answer the question. Is she finished with the research process? If so, why? If not, what must she do?

A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her tax return position.

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

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

Kim has decided to litigate a tax issue with the IRS. Describe the trial level courts that Kim may use to litigate the case.

Temporary Regulations have more authoritative weight than revenue rulings.

Kodak is a beginning tax researcher. He knows that the 1st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project, and any advice that may help Kodak.

Generally, code sections are arranged (grouped together) :

Henry filed his 2018 tax return on May 15th, 2019. The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Josephine is considering taking a 6-month rotation in Paris for her job. Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

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

Which of the following has the highest authoritative weight?

A tax practitioner can avoid IRS penalty relating to a tax return position:

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.

Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his salary. Assuming that Dominic is single, 30 years old, and will have zero tax liability this year, he:

Andy filed a fraudulent 2018 tax return on May 1, 2019. The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

The three basic types of IRS examinations are computer exams, office exams, and business exams.

Campbell was researching a tax issue and found a favorable Tax Court opinion and an IRC Code Section that appears to answer the question. Is she finished with the research process? If so, why? If not, what must she do?

A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her tax return position.

Kodak is a beginning tax researcher. He knows that the 1^st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project, and any advice that may help Kodak.

Henry filed his 2018 tax return on May 15^th, 2019. The statute of limitations for IRS assessment on Henry's 2018 tax return should end: