FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 1: An Introduction to Taxation and Understanding the Tax Law

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Essay

Review LaterAdd Note

Review Later

In terms of revenue neutrality,comment on a tax cut enacted by Congress that: a.contains revenue offsets. b.includes a sunset provision.

Correct Answer

verified

a.Ideally,to achieve revenue neutrality ...

View Answer

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

For omissions from gross income in excess of 25% of that reported,there is no statute of limitations on additional income tax assessments by the IRS.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

The principal objective of the FUTA tax is to provide some measure of retirement security.

Which,if any,of the following taxes are proportional (rather than progressive) ?

Even though a client refuses to correct an error on a past return,it may be possible for a practitioner to continue to prepare returns for the client.

In preparing a tax return,all questions on the return must be answered.

In an office audit,the audit by the IRS takes place at the office of the taxpayer.

The tax law allows an income tax deduction (or a credit) for foreign income taxes.Explain why.

Match the statements that relate to each other.Note: Some choices may be used more than once. a.3 years from date return is filed b.3 years from due date of return c.20% of underpayment d.5% per month (25% limit) e.0.5% per month (25% limit) f.Conducted at IRS office g.Conducted at taxpayer's office h.6 years i.45-day grace period allowed to IRS j.No statute of limitations (period remains open) k.75% of underpayment l.No correct match provided -A deduction for contributions by an employee to certain retirement plans.

Characteristics of the "Fair Tax" (i.e. ,national sales tax) include which,if any,of the following:

As a matter of administrative convenience,the IRS would prefer to have Congress decrease (rather than increase) the amount of the standard deduction allowed to individual taxpayers.

Unlike FICA,FUTA requires that employers comply with state as well as Federal rules.

Match the statements that relate to each other.Note: Some choices may be used more than once. a.3 years from date return is filed b.3 years from due date of return c.20% of underpayment d.5% per month (25% limit) e.0.5% per month (25% limit) f.Conducted at IRS office g.Conducted at taxpayer's office h.6 years i.45-day grace period allowed to IRS j.No statute of limitations (period remains open) k.75% of underpayment l.No correct match provided -Tax credits for home improvements that conserve energy.

If an income tax return is not filed by a taxpayer,there is no statute of limitations on assessments of tax by the IRS.

Match the statements that relate to each other.Note: Some choices may be used more than once. a.3 years from date return is filed b.3 years from due date of return c.20% of underpayment d.5% per month (25% limit) e.0.5% per month (25% limit) f.Conducted at IRS office g.Conducted at taxpayer's office h.6 years i.45-day grace period allowed to IRS j.No statute of limitations (period remains open) k.75% of underpayment l.No correct match provided -Contributions to charitable organizations are deductible.

Can a taxpayer start the 3-year statute of limitations on additional assessments by the IRS by filing his income tax return early (i.e. ,before the due date)? Can the period be shortened by filing late (i.e. ,after the due date)?

In 1985,Roy leased real estate to Drab Corporation for 20 years.Drab Corporation made significant capital improvements to the property.In 2005,Drab decides not to renew the lease and vacates the property.At that time,the value of the improvements is $800,000.Roy sells the real estate in 2015 for $1,200,000 of which $900,000 is attributable to the improvements.When is Roy taxed on the improvements made by Drab Corporation?

When interest is charged on a deficiency,any part of a month counts as a full month.

The objective of pay-as-you-go (paygo) is to achieve revenue neutrality.

Match the statements that relate to each other.Note: Some choices may be used more than once. a.3 years from date return is filed b.3 years from due date of return c.20% of underpayment d.5% per month (25% limit) e.0.5% per month (25% limit) f.Conducted at IRS office g.Conducted at taxpayer's office h.6 years i.45-day grace period allowed to IRS j.No statute of limitations (period remains open) k.75% of underpayment l.No correct match provided -A deduction for certain expenses (interest and taxes) incident to home ownership.