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

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Question 51

Multiple Choice

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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:

A) March 15^th, 2019.
B) April 15^th, 2019.
C) March 15^th, 2020.
D) April 15^th, 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 C)
G) A) and B)

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Question 52

Multiple Choice

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

A) Correspondence.
B) Targeted.
C) Office.
D) Field.
E) None of the above.

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

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Question 53

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In researching a question of fact, the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

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

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

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.

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?

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?

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

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

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

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

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.

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?

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.

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

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?

Lakeisha, a 1^st 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?

The regulation with the lowest authoritative weight is the:

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.