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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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Corporations are required to file a tax return annually regardless of their taxable income.

A) True
B) False

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Question 22

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For fraudulent tax returns,the statute of limitations for IRS assessment is 10 years.

A) True
B) False

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Question 23

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Which of the following has the highest authoritative weight?

If April 15^th falls on a Saturday,the due date for individual tax returns will be on Monday,April 17^th (assuming it is not a holiday).

Which of the following audits is the least common,broadest in scope,and typically most complex?

Josephine is considering taking a six-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?

For the following tax returns,identify the method the IRS likely used to select the return for audit. a.Dan made a mistake in adding his income on his tax return. b.Juanita failed to report her salary from her second job on her tax return. c.Michael and Venita deducted a relatively large amount of travel expenses on their tax return for their business.The travel expense is large relative to other taxpayers in similar businesses with similar levels of income. d.Paul and Melissa recently went through a very nasty divorce.One of the issues was Paul's less than forthright accounting of his income in determining the appropriate level of alimony.

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:

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

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:

Proposed and temporary regulations have the same authoritative weight.

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

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

In a planning context,

Which types of penalties are only imposed after normal due process including a trial?

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?

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

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.

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

If a taxpayer has little cash and a very technical tax case about which she feels very strongly that the tax rules are "on her side," she should prefer to have her case tried in the U.S.Tax Court.