Question 1

Carey was researching a tax issue and located what appears to be a favorable IRS regulation. He knows that regulations serve different purposes and are issued in different forms. Which purpose and which form of regulation would provide Carey the most confidence that he has found an authority that carries a lot of weight for the long term? How could Carey check the status of this regulation?

Accepted Answer

Regulations are the Treasury Department'...

Question 2

Nolene suspects that one of her new clients may be intentionally underreporting his taxable income. What are the potential ramifications to her client of 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 of commi...

Question 3

Bill filed his 2016 tax return on March 15th, 2017. The statute of limitations for IRS assessment on Bill's 2016 tax return should end:

Accepted Answer

A)  March 15th, 2019.
B)  April 15th, 2019.
C)  March 15th, 2020.
D)  April 15th, 2020.
E)  None of the abovE.The SOL ends three years from the later of (1)  the date the tax return was filed or (2)  the tax return's original due date.F) A) and B)
G) C) and D)

Question 4

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

Accepted Answer

A)  is potentially subject to criminal penalties.
B)  is potentially subject to civil penalties.
C)  is potentially subject to fines and a prison sentence.
D)  will have an unlimited statute of limitations for the fraudulent tax return.
E)  None of the above.F) C) and D)
G) A) and B)

Question 5

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?

Accepted Answer

A)  Determination letter.
B)  Private letter ruling.
C)  Tax treaty.
D)  Regulation.
E)  Revenue procedure.F) None of the above
G) All of the above

Question 6

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 7

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

Question 8

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 the above.F) All of the above
G) C) and E)

Question 9

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 above.F) B) and D)
G) A) and E)

Question 10

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 the above.F) B) and C)
G) A) and B)

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

For which of the following tax violations is a civil penalty not imposed on taxpayers?

Accepted Answer

A)  failure to file a tax return.
B)  failure to pay tax owed.
C)  fraud.
D)  failure to make estimated tax payments.
E)  None of the above.F) A) and C)
G) C) and D)

Question 14

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 15

The regulation with the lowest authoritative weight is the:

Accepted Answer

A)  Procedural regulation.
B)  Interpretative regulation.
C)  Proposed regulation.
D)  Legislative regulation.
E)  None of the above.F) A) and B)
G) B) and C)

Question 16

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 the above.F) A) and B)
G) A) and C)

Question 17

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 18

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.

Accepted Answer

A) True 
 B)False

Question 19

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?

Accepted Answer

There are two broad categories of tax au...

Question 20

Which of the following types of tax services are arranged by code section?

Accepted Answer

A)  legal tax service.
B)  annotated tax service.
C)  professional tax service.
D)  topical tax service.
E)  None of the above.F) A) and E)
G) B) and D)

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 of 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 of commi...
View 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 Answer
verified

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

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

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

Which of the following types of tax services are arranged by code section?

Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
verified
Regulations are the Treasury Department'...
View Answer

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

Correct Answer
verified

Kodak is a beginning tax researcher. He knows that the 1^st 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 Answer
verified
To answer a tax question, you must under...
View Answer

Bill filed his 2016 tax return on March 15^th, 2017. The statute of limitations for IRS assessment on Bill's 2016 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
There are two broad categories of tax au...
View Answer

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

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

The regulation with the lowest authoritative weight is the:

Correct Answer
verified

For which of the following tax violations is a civil penalty not imposed on taxpayers?

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 of 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 of commi...View AnswerShow 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 AnswerverifiedShow Answer

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following types of tax services are arranged by code section?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedRegulations are the Treasury Department'...View AnswerShow Answer

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

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

Bill filed his 2016 tax return on March 15th, 2017. The statute of limitations for IRS assessment on Bill's 2016 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

Correct AnswerverifiedThere are two broad categories of tax au...View AnswerShow Answer

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

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

The regulation with the lowest authoritative weight is the:

Correct AnswerverifiedShow Answer

For which of the following tax violations is a civil penalty not imposed on taxpayers?

Correct AnswerverifiedShow Answer

Correct Answer
verified
There are serious ramifications of commi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Regulations are the Treasury Department'...
View Answer

Correct Answer
verified

Kodak is a beginning tax researcher. He knows that the 1^st 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 Answer
verified
To answer a tax question, you must under...
View Answer

Bill filed his 2016 tax return on March 15^th, 2017. The statute of limitations for IRS assessment on Bill's 2016 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
There are two broad categories of tax au...
View Answer

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified