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

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Question 21

True/False

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An extension to file a tax return does not extend the due date for tax payments.

A) True
B) False

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Question 22

Multiple Choice

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Which of the following is not considered a secondary authority?

A) Text book.
B) Private Letter Ruling.
C) Tax article.
D) Tax service.
E) None of the choices are correct.

F) D) and E)
G) B) and E)

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Question 23

Multiple Choice

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

Which of the following is not considered a primary authority?

If April 15ᵗʰ falls on a Saturday,the due date for individual tax returns will be on Monday,April 17ᵗʰ.

Which of the following courts is the only court that provides for a jury trial?

If a taxpayer is due a refund,she does not have to file a tax return.

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?

Under the tax law,taxpayers may be subject to both civil and criminal penalties for underpaying their tax liability (e.g.,due to fraud).

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

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?

Generally,code sections are arranged (grouped together) :

Circular 230 was issued by:

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

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?

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

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

For the following taxpayers indicate whether the taxpayer should file a tax return and why. a.Robert earned $50,000 this year as a staff accountant.His estimated tax liability is $4,500,and he expects to receive a $500 tax refund. b.Amy earned $4,000 this year working part-time.She will have no federal tax liability and has not made any federal tax payments. c.Ty earned $2,500 this summer and had $200 of federal taxes withheld from his paycheck.He will have no federal tax liability this year. d.Startup Corporation had a $50,000 loss this year. e.The Walker Family Trust earned $500 of gross income this year.

Dan received a letter from the IRS that gave him the choice of (1) requesting a conference with an Appeals Officer or (2) agreeing to a proposed tax adjustment.Dan received the:

Under the Statement on Standards for Tax Services,a CPA may recommend a tax return position if the position is frivolous and the position is not disclosed on the tax return.