Question 1

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

Accepted Answer

A)   only if the position has a more likely than not chance of being sustained by the IRS or courts.
B)   if the position has a realistic possibility of being sustained by the IRS or courts.
C)   if there is not substantial authority to support the position.
D)   if the position has a reasonable basis and is disclosed on the tax return.
E)   None of these.F) C) and D)
G) All of the above

Question 2

The Internal Revenue Code and tax treaties are examples of statutory authorities.

Accepted Answer

A) True 
 B)False

Question 3

Lavonda discovered that the 5th Circuit (where Lavonda resides)  has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:

Accepted Answer

A)   Tax Court only.
B)   U.S. Court of Federal Claims only.
C)   U.S. District Court only.
D)   Tax Court or the U.S. District Court.
E)   Tax Court or the U.S. Court of Federal Claims.F) None of the above
G) A) and C)

Question 4

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 these.F) None of the above
G) All of the above

Question 5

This year April 15th falls on a Saturday. Individual tax returns will be due on:

Accepted Answer

A)   April 14th.
B)   April 15th.
C)   April 16th.
D)   April 17th.
E)   None of these.F) A) and C)
G) B) and C)

Question 6

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

Accepted Answer

A)   Correspondence.
B)   Targeted.
C)   Office.
D)   Field.
E)   None of these.F) A) and E)
G) A) and D)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Generally, code sections are arranged (grouped together) :

Accepted Answer

A)   chronologically
B)   by topic
C)   randomly
D)   by length
E)   None of these.F) B) and C)
G) A) and C)

Question 9

Martin has never filed a 2014 tax return despite earning approximately $20,000 providing landscaping work in the community. When does the statute of limitations expire for Martin's 2014 tax return?

Accepted Answer

A)   2017.
B)   2018.
C)   2021.
D)   2022.
E)   None of these.F) None of the above
G) A) and D)

Question 10

Which of the following is not considered a secondary authority?

Accepted Answer

A)   Text book
B)   Private letter ruling
C)   Tax article
D)   Tax service
E)   None of these.F) C) and E)
G) C) and D)

Question 11

According to Statement on Standards for Tax Services No. 1, a tax practitioner can recommend a tax return position:

Accepted Answer

A)   if the position is frivolous and disclosed on the tax return.
B)   if the position complies with the standards imposed by the applicable tax authority.
C)   only if the position meets the "more likely than not" standard.
D)   only if the position meets the "clear and convincing evidence" standard.
E)   None of these.F) C) and D)
G) B) and C)

Question 12

Rowanda could not settle 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:

Accepted Answer

A)   U.S. District Court.
B)   U.S. Circuit Court of Appeals.
C)   U.S. Court of Federal Claims.
D)   U.S. Tax Court.
E)   None of these.F) B) and C)
G) B) and E)

Question 13

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 these.F) A) and C)
G) All of the above

Question 14

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to the proposed IRS adjustment.

Accepted Answer

A) True 
 B)False

Question 15

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 2/3rd positive vote in the House and Senate.
D)   can override the President's veto with a 75 percent positive vote in the House and Senate.
E)   None of these.F) All of the above
G) A) and C)

Question 16

Which of the following is not a common method that the IRS uses to select returns for audit?

Accepted Answer

A)   DIF system.
B)   Tax select system.
C)   Information matching.
D)   Document perfection.
E)   None of these.F) C) and D)
G) A) and C)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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.

Accepted Answer

To answer a tax question, you must under...

Question 19

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

Accepted Answer

There are three trial level courts that ...

Question 20

Which of the following is not a common tool used in conducting tax research?

Accepted Answer

A)   citator.
B)   annotated tax service.
C)   topical tax service.
D)   keyword search.
E)   None of these.F) All of the above
G) B) and D)

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

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

Correct AnswerverifiedThere are three trial level courts that ...View AnswerShow Answer

Which of the following is not a common tool used in conducting tax research?

Correct AnswerverifiedShow Answer

Lavonda discovered that the 5th Circuit (where Lavonda resides) has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

This year April 15th falls on a Saturday. Individual tax returns will be due on:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to the proposed IRS adjustment.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a common method that the IRS uses to select returns for audit?

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

Rowanda could not settle 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:

Correct AnswerverifiedShow Answer

According to Statement on Standards for Tax Services No. 1, a tax practitioner can recommend a tax return position:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedTo answer a tax question, you must under...View AnswerShow Answer

Generally, code sections are arranged (grouped together) :

Correct AnswerverifiedShow Answer

Which of the following is not considered a secondary authority?

Correct AnswerverifiedShow Answer

Martin has never filed a 2014 tax return despite earning approximately $20,000 providing landscaping work in the community. When does the statute of limitations expire for Martin's 2014 tax return?

Correct AnswerverifiedShow Answer

The Internal Revenue Code and tax treaties are examples of statutory authorities.

Correct AnswerverifiedShow Answer

If the President vetoes tax legislation, Congress:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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There are three trial level courts that ...
View Answer

Correct Answer
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To answer a tax question, you must under...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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