Question 1

For the 2017 tax returns, indicate when the statute of limitation expires and why. a. Simon filed his tax return on April 10, 2018.b. Billy and Barbara filed their tax returns late on December 1, 2018.c. Pearson earns a living through various illegal activities. He filed his tax return on March 14, 2018 but did no report his illegal income on his tax return.d. Luther filed his tax return on July 17, 2018 but has accidentally underreported his taxable gross income by20%.

Accepted Answer

(a) April 15, 2021. The statute of limit...

Question 2

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

Accepted Answer

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

Question 3

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income. If Tyrone's tax return is chosen for audit because of his large charitable contributions, which audit program likely identified Tyrone's tax return for audit?

Accepted Answer

A)   Information matching.
B)   Deduction Detective.
C)   DIF System.
D)   Document perfection.
E)   None of the choices are correct.F) B) and D)
G) B) and E) C

Question 4

If the President vetoes tax legislation, Congress:

Accepted Answer

A)   cannot override the President's veto.
B)   can override the President's veto with a 50 percent positive vote in the House and Senate.
C)   can override the President's veto with a 75 percent positive vote in the House and Senate.
D)   can override the President's veto with a 2/3rd positive vote in the House and Senate.
E)   None of the choices are correct.F) A) and B)
G) A) and C)

Question 5

In general, a CPA will satisfy his professional responsibilities under the Statement on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority.

Accepted Answer

A) True 
 B)False  True

Question 6

Closed facts are especially conducive to tax planning.

Accepted Answer

A) True 
 B)False

Question 7

Greg earned $21,500 this year and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg is single, 25 years old, and will have a total tax liability of$1,000 (and thus will receive a $500)  refund, he:

Accepted Answer

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

Question 8

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Accepted Answer

A)   Taxpayer's employment.
B)   Filing status.
C)   Taxpayer's gross income.
D)   Taxpayer's age.
E)   None of the choices are correct.F) A) and C)
G) A) and B)

Question 9

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

Accepted Answer

A)   DIF System.
B)   Information matching.
C)   Document perfection.
D)   National Research Program.
E)   None of the choices are correct.F) A) and B)
G) D) and E)

Question 10

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 11

In researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following has the highest authoritative weight?

Accepted Answer

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

Question 13

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Accepted Answer

A)   October 15th.
B)   November 15th.
C)   August 15th.
D)   April 15th.
E)   None of the choices are correct.F) B) and C)
G) A) and E)

Question 14

Revenue rulings and revenue procedures are examples of primary authorities.

Accepted Answer

A) True 
 B)False

Question 15

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

Campbell is not finished. Once the tax r...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to a proposed IRS adjustment on the taxpayer's income tax return.

Accepted Answer

A) True 
 B)False

Question 18

Hong, an introductory tax student, is beginning his first research project. He has a completeunderstanding 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

A novice may conduct a keyword search in...

Question 19

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 thenonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Accepted Answer

Except for Supreme Court cases, whenever...

Question 20

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 wouldinfluence her research.

Accepted Answer

Two basic types of issues that researchers will encounter are questions of fact and questions of law. The answer to a question of fact hinges upon the facts and circumstances of the taxpayer's transaction. For example, whether a trade or business expense is "ordinary," "necessary," and "reasonable" and thus, deductible, is a question of fact. If you are researching a question of
fact, it is important for the researcher to understand which facts determine the answer - in this case, which facts make an expense "ordinary," "necessary," and "reasonable" and which facts do not. In this type of question, the researcher will focus much of her efforts toward understanding how various facts impact the research answer and identifying authorities with fact patterns similar to her client's fact pattern.
The answer to a question of law hinges upon the interpretation of the law, such as, interpreting a particular phrase in a code section. If a researcher is faced with this type of question, she will spend much of her time researching the various interpretations of the code section and take note of
which authorities interpret the code differently and why.

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

Correct Answer
verified
(a) April 15, 2021. The statute of limit...
View Answer

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

Correct Answer
verified

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income. If Tyrone's tax return is chosen for audit because of his large charitable contributions, which audit program likely identified Tyrone's tax return for audit?

Correct Answer
verified
C

If the President vetoes tax legislation, Congress:

Correct Answer
verified

In general, a CPA will satisfy his professional responsibilities under the Statement on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority.

Correct Answer
verified
True

Closed facts are especially conducive to tax planning.

Correct Answer
verified

Greg earned $21,500 this year and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg is single, 25 years old, and will have a total tax liability of$1,000 (and thus will receive a $500) refund, he:

Correct Answer
verified

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

In researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Correct Answer
verified

Which of the following has the highest authoritative weight?

Correct Answer
verified

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Correct Answer
verified

Revenue rulings and revenue procedures are examples of primary authorities.

Correct Answer
verified

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?

Correct Answer
verified
Campbell is not finished. Once the tax r...
View Answer

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

Correct Answer
verified

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to a proposed IRS adjustment on the taxpayer's income tax return.

Correct Answer
verified

Correct Answer
verified
A novice may conduct a keyword search in...
View Answer

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 thenonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Correct Answer
verified
Except for Supreme Court cases, whenever...
View Answer

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

Correct Answerverified(a) April 15, 2021. The statute of limit...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income. If Tyrone's tax return is chosen for audit because of his large charitable contributions, which audit program likely identified Tyrone's tax return for audit?

Correct AnswerverifiedC

If the President vetoes tax legislation, Congress:

Correct AnswerverifiedShow Answer

In general, a CPA will satisfy his professional responsibilities under the Statement on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority.

Correct AnswerverifiedTrue

Closed facts are especially conducive to tax planning.

Correct AnswerverifiedShow Answer

Greg earned $21,500 this year and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg is single, 25 years old, and will have a total tax liability of$1,000 (and thus will receive a $500) refund, he:

Correct AnswerverifiedShow Answer

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Correct AnswerverifiedShow Answer

Which of the following has the highest authoritative weight?

Correct AnswerverifiedShow Answer

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Correct AnswerverifiedShow Answer

Revenue rulings and revenue procedures are examples of primary authorities.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedCampbell is not finished. Once the tax r...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to a proposed IRS adjustment on the taxpayer's income tax return.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA novice may conduct a keyword search in...View AnswerShow Answer

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 thenonacquiescence? What is it? What does it mean and how would it affect Roddy's reliance on the court case?

Correct AnswerverifiedExcept for Supreme Court cases, whenever...View AnswerShow Answer

Correct Answer
verified
(a) April 15, 2021. The statute of limit...
View Answer

Correct Answer
verified

Correct Answer
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C

Correct Answer
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Correct Answer
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True

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Campbell is not finished. Once the tax r...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A novice may conduct a keyword search in...
View Answer

Correct Answer
verified
Except for Supreme Court cases, whenever...
View Answer