Question 1

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) C) and E)
G) C) and D)

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)   Correspondence.
B)   Random.
C)   Office.
D)   Field.
E)   None of the above.F) C) and D)
G) A) and B)

Question 5

Allen filed his 2016 tax return on May 15th, 2017 and underreported his gross income by 30 percent. Assuming Allen's underreporting is not due to fraud, the statute of limitations for IRS assessment on Allen's 2016 tax return should end:

Accepted Answer

A)   May 15th, 2019.
B)   April 15th, 2019.
C)   May 15th, 2020.
D)   April 15th, 2020.
E)   None of the above.F) A) and C)
G) A) and E)

Question 6

In a planning context,

Accepted Answer

A)   closed facts are preferred to open facts.
B)   new facts are preferred to old facts.
C)   old facts are preferred to new facts.
D)   open facts are preferred to closed facts.
E)   None of the above.F) B) and E)
G) None of the above

Question 7

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) A) and E)
G) A) and B)

Question 8

A client has recently learned of a proposed tax bill that would increase the tax rates on investment gains by 5 percent. The President does not support this increase. Please describe for your client the process by which new tax legislation is created and how the President's disapproval may influence the enactment of the bill.

Accepted Answer

As required by the U.S. Constitution (Ar...

Question 9

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 2nd 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.

Accepted Answer

(a) Document perfect...

Question 10

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 the above.F) A) and E)
G) C) and D)

Question 11

If an individual taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   May 15th, 2019.
B)   April 15th, 2019.
C)   May 15th, 2020.
D)   April 15th, 2020.
E)   None of the above.F) B) and C)
G) C) and E)

Question 13

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) D) and E)
G) B) and C)

Question 14

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

Question 15

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 E)
G) B) and E) D

Question 16

Raul was researching an issue and found two Tax Court decisions issued within 6 months of each other, one for a taxpayer residing in California and the other for a taxpayer residing in New York whose rulings were inconsistent. Raul knows that the federal tax law does not differ by state and the issue was exactly the same in both cases. Raul is confused because he thought that a basic judicial doctrine was that a court is supposed to rule consistently. Name and describe this judicial doctrine that requires judicial consistency and discuss why the Tax Court may have intentionally ruled inconsistently in this example.

Accepted Answer

In rendering court decisions, all courts apply the judicial doctrine of stare decisis. This doctrine means that a court will rule consistently with (a) its previous rulings (i.e., unless, due to evolving interpretations of the tax law over time, they decide to overturn an earlier decision) and (b) the rulings of higher courts with appellate jurisdiction (i.e., the courts their cases are appealed to). The implication of stare decisis is that a Circuit Court will abide by Supreme Court rulings and its own rulings, whereas a trial level court will abide by Supreme Court rulings, its respective Circuit Court's rulings, and its own rulings. For example, a district court in California would follow 9^th Circuit and Supreme Court rulings as well as the court's own rulings. The doctrine of stare decisis presents a special problem for the Tax Court because it appeals to different Circuits based on the taxpayer's residence. To implement the doctrine of stare decisis, the Tax Court applies the Golsen rule. The Golsen rule simply states that the Tax Court will abide by the Circuit Court's rulings that has appellate jurisdiction for a case. The implication of the Golsen rule is that the Tax Court may issue conflicting opinions in different Circuits and thus, most likely explains the differing Tax Court decisions that Raul located.

Question 17

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Accepted Answer

A)   April 15th.
B)   October 15th.
C)   August 15th.
D)   November 15th.
E)   None of the above.F) None of the above
G) A) and C) A

Question 18

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 the above.F) A) and B)
G) All of the above

Question 19

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 20

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

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

Lavonda discovered that the 5^th 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 Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Allen filed his 2016 tax return on May 15^th, 2017 and underreported his gross income by 30 percent. Assuming Allen's underreporting is not due to fraud, the statute of limitations for IRS assessment on Allen's 2016 tax return should end:

Correct Answer
verified

In a planning context,

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

Correct Answer
verified
As required by the U.S. Constitution (Ar...
View Answer

Correct Answer
verified
(a) Document perfect...
View Answer

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

Correct Answer
verified

If an individual taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Correct Answer
verified

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

Correct Answer
verified

The regulation with the lowest authoritative weight is the:

Correct Answer
verified

If the President vetoes tax legislation, Congress:

Correct Answer
verified

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

Correct Answer
verified
D

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Correct Answer
verified
A

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

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

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

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

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Allen filed his 2016 tax return on May 15th, 2017 and underreported his gross income by 30 percent. Assuming Allen's underreporting is not due to fraud, the statute of limitations for IRS assessment on Allen's 2016 tax return should end:

Correct AnswerverifiedShow Answer

In a planning context,

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

Correct AnswerverifiedAs required by the U.S. Constitution (Ar...View AnswerShow Answer

Correct Answerverified(a) Document perfect...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

If an individual taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The regulation with the lowest authoritative weight is the:

Correct AnswerverifiedShow Answer

If the President vetoes tax legislation, Congress:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedD

If Lindley requests an extension to file her individual tax return, the latest she could pay her tax due without penalty is:

Correct AnswerverifiedA

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

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

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

Lavonda discovered that the 5^th 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 Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Allen filed his 2016 tax return on May 15^th, 2017 and underreported his gross income by 30 percent. Assuming Allen's underreporting is not due to fraud, the statute of limitations for IRS assessment on Allen's 2016 tax return should end:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
As required by the U.S. Constitution (Ar...
View Answer

Correct Answer
verified
(a) Document perfect...
View Answer

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified
D

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
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