Question 1

Under the Statements 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.

Accepted Answer

A) True 
 B)False

Question 2

A taxpayer can avoid a substantial understatement of tax penalty:

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 the position is not frivolous and disclosed on the tax return.
D)  if the position has a reasonable basis and is disclosed on the tax return.
E)  None of the choices are correct.F) C) and E)
G) B) and E)

Question 3

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

Accepted Answer

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

Question 4

Allen filed his 2019 tax return on May 15th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Accepted Answer

A)  May 15th,2022.
B)  April 15th,2022.
C)  May 15th,2023.
D)  April 15th,2023.
E)  None of the choices are correct.F) B) and D)
G) A) and E)

Question 5

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Accepted Answer

There are serious ramifications for comm...

Question 6

Raul was researching an issue and found two tax court decisions issued within six 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

In rendering court decisions,all courts ...

Question 7

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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.F) D) and E)
G) None of the above

Question 10

Circular 230 was issued by:

Accepted Answer

A)  AICPA.
B)  State boards of accountancy.
C)  American Bar Association.
D)  IRS.
E)  None of the choices are correct.F) C) and E)
G) B) and C)

Question 11

Princess,who resides in the 2nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Accepted Answer

A)  2nd Circuit.
B)  Federal Circuit.
C)  1st Circuit.
D)  2nd Circuit or the Federal Circuit.
E)  None of the choices are correct.F) C) and D)
G) B) and D)

Question 12

Henry filed his 2019 tax return on May 15th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Accepted Answer

A)  May 15th,2022.
B)  April 15th,2022.
C)  May 15th,2023.
D)  April 15th,2023.
E)  None of the choices are correct.F) B) and E)
G) A) and E)

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

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Correct Answer
verified
There are serious ramifications for comm...
View Answer

Allen filed his 2019 tax return on May 15^th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Correct Answer
verified

Princess,who resides in the 2^nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

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

Henry filed his 2019 tax return on May 15^th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Correct Answer
verified

Circular 230 was issued by:

Correct Answer
verified

Under the Statements 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.

Correct Answer
verified

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:

Correct Answer
verified

Correct Answer
verified
In rendering court decisions,all courts ...
View Answer

A taxpayer can avoid a substantial understatement of tax penalty:

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

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

Correct Answer
verified

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

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income.What are the potential ramifications to her client for this behavior? What are the consequences to Nolene if she assists the client in underreporting income? Any advice for Nolene?

Correct AnswerverifiedThere are serious ramifications for comm...View AnswerShow Answer

Allen filed his 2019 tax return on May 15th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Correct AnswerverifiedShow Answer

Princess,who resides in the 2nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

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 AnswerverifiedShow Answer

Henry filed his 2019 tax return on May 15th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Correct AnswerverifiedShow Answer

Circular 230 was issued by:

Correct AnswerverifiedShow Answer

Under the Statements 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.

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedIn rendering court decisions,all courts ...View AnswerShow Answer

A taxpayer can avoid a substantial understatement of tax penalty:

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

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
There are serious ramifications for comm...
View Answer

Allen filed his 2019 tax return on May 15^th,2020,and underreported his gross income by 30 percent.Assuming Allen's underreporting is not due to fraud,the statute of limitations for IRS assessment on Allen's 2019 tax return should end:

Correct Answer
verified

Princess,who resides in the 2^nd Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Correct Answer
verified

Correct Answer
verified

Henry filed his 2019 tax return on May 15^th,2020.The statute of limitations for IRS assessment on Henry's 2018 tax return should end:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In rendering court decisions,all courts ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified