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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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Joel reported a high amount of charitable contributions as a deduction on his individual tax return relative to taxpayers with similar income levels. The information matching program is the IRS program most likely to identify Joel's tax return for audit.

A) True
B) False

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Question 22

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Corporations are required to file a tax return only if their taxable income is greater than:

A) $600.
B) $1,000.
C) $0.
D) $750.
E) None of the choices are correct. Corporations are always required to file a tax return.

F) A) and B)
G) B) and D)

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Question 23

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Because the U.S. District Court hears a broader set of cases, decisions by the U.S.District Court may be considered to have more authoritative weight than the U.S. Court of Federal Claims.

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

Andy filed a fraudulent 2017 tax return on May 1, 2018. The statute of limitations forIRS assessment on Andy's 2017 tax return should end:

Rebecca is at a loss. A new tax law was recently passed, and she needs to get a better understanding of why the tax law was passed and the intent of the law from an official authority. Describe what authorities may be especially helpful to Rebecca and why she can't find many authorities that discuss the new law.

A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her tax return position.

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

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

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

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:

Basu received a letter from the IRS that gave him the choice of (1) paying a proposed deficiency or (2) filing a petition with the U.S. Tax Court. Basu received the:

Martin has never filed a 2017 tax return despite earning approximately $20,000 providing landscaping work in the community. In what tax year, will the statute of limitations expire for Martin's 2017 tax return?

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

The tax return filing requirements for individual taxpayers only depend on the taxpayer'sfiling status.

The "90-day" letter gives the taxpayer the opportunity to pay a proposed IRS taxadjustment or file a petition in the U.S. District Court to contest the adjustment and hear the case.

Lavonda discovered that the U.S. Circuit Court of Appeals for the Federal Circuit 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?

Office examinations are the most common type of IRS audit.

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

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.