chapter 4 Flashcards
Tax authority
comes from all three branches of government
- legislative
- judicial
- administrative-
Legislative Authority- Congress
Sources of statutory authority include: The consititution The IRC treaties Committee reports from the different committees
Administrative authroity- Treasury Department and Internal Revenue Service
Proposed- have to be issued and proposed for 30 days before becomming final.
Temporary- have the effect of law but only for 3 years
Final- Until revoked they are the law
Judicial Authority
US Tax Court- most large cases- no jury, don’t have to pay first
US District Court- jury availabble and must pay first then sue
US Court of Federal Claims- must pay first then sue, One court in DC and no jury is available
US Tax court-small claims- $50000 or less and no appeals
Appellate- hears appeals from district courts and tax court
Statute of Limitations-
6 years if the ommission was more than 25% of gross income stated on return
none for fraud
3 years if below 25% of gross income on return
No change report issued
Cannot reopen the case unless their is fraud
Sign return- penalty
$50 per return or up to $25k in one year
willful attempt to misstate tax liability
greater of $5000 or 50% of the income earned from reterun
knowingly disclosing tax information
fine of $1000 and one year in prision
prepares a return with an unreasonable position
greater of $1000 and 50% of income earned
refund form= 1040X
must be filed within 2 years from payment of tax or 3 years from the date of filed return
non filing penalities
5% per monthh of the amount of tax due
max penalty is 25% of the tax due
and min is $135 or 5% a month
failure to file is fraudulent is
15% per month of tax due with a max of 75% of the tax due
estimated payments- individuals
100% of PY taxes or 90% of current year
if AGI is over 150k then it increases to 110%
Corporate estimated payments
100% of current year
100% of prior year or
annualization method
