Chapter 2 Flashcards
Tax Compliance, the IRS, and Tax Authorities
Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?
Filing status
Taxpayers gross income
Taxpayers employment
Taxpayers age
None of these are correct
Taxpayers employment
Greg earned $25,500 in 2023 and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg is single, 25 years old, and will have a total tax liability of $1,301 (and thus will receive a $199 refund), he:
is required to file a tax return
Leslie made a mathematical mistake in computing her tax liability. Which audit program will likely catch Leslie’s mistake?
Document perfection
Dan received a letter from the IRS that gave him the choice of
requesting a conference with an appeals officer or
agreeing to a proposed tax adjustment. Dan received the:
30-day letter.
Which of the following has the highest authoritative weight?
Texbook
Private letter ruling
Revenue ruling
Tax service
Tax article
Revenue ruling
Jaime recently found a “favorable” trial-level court opinion directly on point for her tax question. Which trial-level court would she prefer to have issued the opinion?
Tax Court
Which of the following committees typically initiates tax legislation?
House Ways and Means Committee
Joint Conference Committee
Senate Finance Committee
Senate Tax Committee
None of these are correct
House ways and means committee
According to Statements on Standards for Tax Services No. 1, a tax practitioner can recommend a tax return position:
if the position complies with the standards imposed by the applicable tax authority.
Circular 230 was issued by:
IRS
A taxpayer can avoid a substantial understatement of tax penalty:
if the position has a reasonable basis and is disclosed on the tax return.
A tax practitioner can avoid IRS penalty relating to a tax return position:
if there is substantial authority to support the position.
If Paula requests an extension to file her individual tax return in a timely manner, the latest she could file her return without a failure-to-file penalty is (assuming the extended due date does not fall on a weekend or holiday):
October 15th
If Lindley requests an extension to file her individual tax return in a timely manner, the latest she could pay her tax due without penalty is (assuming the due date does not fall on a weekend or holiday):
April 15th
Bill filed his 2023 tax return on March 15thMarch 15th, 2024. The statute of limitations for IRS assessment on Bill’s 2023 tax return should end:
April 15th, 2027
The statute of limitations (SOL) ends three years from the later of
- the date the tax return was filed or
- the tax return’s original due date.
