Examination of Returns and the Appeals Process Flashcards
The IRS has begun an examination of Mark’s 2017 income tax return. The IRS would like to ask Mark’s neighbors questions with respect to that examination. There is no pending criminal investigation into the matter, and there is no evidence that such contact will result in reprisals against the neighbors or jeopardize collection of the tax liability. Before the IRS contacts the neighbors, the IRS must
A. Provide Mark with reasonable notice of the contact.
B. Make an assessment of Mark’s tax liability.
C. Ask the court for a third-party recordkeeper subpoena.
D. Mail Mark a statutory Notice of Deficiency.
Provide Mark with reasonable notice of the contact.
The IRS must give the taxpayer reasonable notice before contacting other persons in examining or collecting a tax liability. The IRS must also give the taxpayer notice of specific contacts by providing the taxpayer with a record of persons contacted on both a periodic basis and upon the taxpayer request. The notice does not apply
- To any pending criminal investigation,
- When providing notice would jeopardize collection of any tax liability,
- When providing notice may result in reprisal against any person, or
- When the taxpayer authorized the contact.
All of the following reasons are acceptable for transferring an examination from one IRS district to another EXCEPT
A. The place of examination is solely for the convenience of the taxpayer’s representative (books and records are located at his or her client’s office, which is located within the current IRS district).
B. Books and records are located in another district.
C. An executor or administrator has moved to another district.
D. The taxpayer’s residence has changed since the return was filed.
The place of examination is solely for the convenience of the taxpayer’s representative (books and records are located at his or her client’s office, which is located within the current IRS district).
When a request is received to transfer a return to another district for examination, the district director having jurisdiction may transfer the case to the district director of the other district. The IRS will determine the time and place of the examination. In determining whether a transfer should be made, circumstances considered include the change of the taxpayer’s domicile, discovery that the taxpayer’s books and records are kept in another district, change of domicile of an executor or administrator to another district, and the effective administration of the tax laws [26 CFR 601.105(k)]. The convenience of the taxpayer’s representative is not an acceptable reason to transfer an examination.
Caroline received an audit notification letter scheduling an appointment for July 1, 2018, for the examination of her tax year 2016 Form 1040 return. The week before the scheduled appointment, she received a telephone call from the Internal Revenue Service office canceling the appointment. She was told that she would be contacted at a later date to reschedule the appointment. She was not contacted until July 1, 2019, when she was advised of a new appointment date. Errors identified in the examination resulted in her owing additional tax of $4,000 plus accrued interest of $600. Caroline does not believe that she should have to pay interest for the period that she was waiting for her appointment to be rescheduled. How should she proceed?
A. Pay the tax and interest and deduct the interest on her 2019 return, the year paid.
B. Immediately request an appeals conference to contest the interest.
C. Request an abatement of the interest by filing a Form 843 with the Internal Revenue Service service center where she filed her 2016 return.
D. Immediately petition the Tax Court to contest the interest.
Request an abatement of the interest by filing a Form 843 with the Internal Revenue Service service center where she filed her 2016 return.
Caroline must file Form 843 at the same service center in which she filed her return. If she does not remember where she filed her 2016 tax return, she can file this form at the last service center she filed a tax return. If Caroline had already paid the tax due and interest, she must file Form 843 within 3 years from the due date (plus the filing extension time) or 2 years from the time she paid the interest, whichever is later.
Under what circumstances may the examination of a tax return be transferred to another district?
A. The taxpayer moved and now resides in another district.
B. The books and records are located in another district.
C. The taxpayer requests a transfer to another district.
D. All of the answers are correct.
All of the answers are correct.
In most cases, an income tax examination is conducted in the Internal Revenue Service district office nearest the taxpayer’s place of residence. The examination may be transferred to another IRS district office if the taxpayer’s books and records are kept in another district, the taxpayer has changed domiciles, or an executor or administrator has moved to another district [26 CFR 601.105(k)]. The IRS has authority to determine the time and place of the examination.
Before the initial in-person interview between the IRS and the taxpayer to determine or collect any taxes, a taxpayer should receive which one of the following publications from the IRS?
A. Publication 594, The IRS Collection Process.
B. Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don’t Agree.
C. Form 2848, Power of Attorney and Declaration of Representative.
D. Publication 1, Your Rights as a Taxpayer.
Publication 1, Your Rights as a Taxpayer.
Section 7521(b) provides that prior to the initial in-person interview, an officer or employee of the IRS must provide to the taxpayer an explanation of the audit process and the taxpayer’s rights under such process, or if the interview is related to the collection of any tax, an explanation of the collection process and the taxpayer’s rights under such process (Publication 1).
All of the following statements with regard to interest and penalties on agreed cases are true EXCEPT
A. Jan agreed to the proposed changes. She signed the agreement form and paid the additional tax. Jan will pay interest on the additional tax. Interest is figured from the due date of the return to the date she paid the additional tax.
B. Joseph agreed to the proposed changes. He signed the agreement form, but he did not pay the additional tax. Joseph received a bill that included the interest. He paid the bill of $5,500 11 days after the billing date. He will not have to pay more interest or penalties.
C. Jody agreed to the proposed changes. She signed the agreement form, but she did not pay the additional tax of $2,700. On June 5, 2019, Jody received a bill dated June 2, 2019, that included the interest. She paid the bill on June 21, 2019. Jody will owe additional interest.
D. Jane agreed to the proposed changes. She signed the agreement form on May 18, 2019, but she did not pay the bill until October 3, 2019. Jane will owe additional interest.
Jody agreed to the proposed changes. She signed the agreement form, but she did not pay the additional tax of $2,700. On June 5, 2019, Jody received a bill dated June 2, 2019, that included the interest. She paid the bill on June 21, 2019. Jody will owe additional interest.
If the taxpayer does not pay the additional tax when (s)he signs the agreement, (s)he will receive a bill that includes interest. If the taxpayer pays the amount due within 10 business days of the billing date, (s)he will not have to pay more interest or penalties. This period is extended to 21 calendar days if the amount due is less than $100,000 (Publication 556). Jody paid the bill within 21 days of the date of notice and demand and thus will owe no additional interest.
A taxpayer received a notice from the IRS saying a prior year’s tax return had been examined, creating a tax assessment of $2,560. The taxpayer disagrees with the amount of tax assessed. The taxpayer could request an audit reconsideration in all of the following situations EXCEPT
A. The full amount owed has already been paid.
B. There is new documentation for the examination.
C. They neither appeared for the examination nor sent information to the IRS.
D. They moved and never received the examination notice.
The full amount owed has already been paid.
In order for a request of an audit reconsideration to be accepted, the liability must be unpaid. If you have paid the amount due in full, you must file a formal claim. There are four reasons a taxpayer may request the audit reconsideration, but by default of the “acceptance” requirements, full payment of liability is not one of them.
In which of the following ways may an interview for an IRS examination be procured?
A. The IRS may notify the taxpayer that the IRS will conduct an examination through a personal interview.
B. The taxpayer may request that the examination be conducted through a personal interview.
C. Either the IRS may notify the taxpayer that the IRS will conduct an examination through a personal interview or the taxpayer may request that the examination be conducted through a personal interview.
D. None of the answers are correct.
Either the IRS may notify the taxpayer that the IRS will conduct an examination through a personal interview or the taxpayer may request that the examination be conducted through a personal interview.
If the IRS notifies the taxpayer that the IRS will conduct an examination of the taxpayer’s return through a personal interview or the taxpayer requests such an interview, the taxpayer has the right to ask that the examination take place at a reasonable time and place that is convenient for both the taxpayer and the IRS.
Which of the following is NOT an acceptable reason to transfer an IRS examination from one IRS district office to another?
A. The taxpayer’s books and records are kept in another district.
B. Taxpayer B has moved to a new home in a new district.
C. Taxpayer X, an executor, has moved to another district.
D. The taxpayer requests a transfer for his or her convenience.
The taxpayer requests a transfer for his or her convenience.
When a request is received to transfer a return to another district for examination, the district director having jurisdiction may transfer the case to the district director of such other district. The IRS will determine the time and place of the examination. In determining whether a transfer should be made, circumstances considered include
1. The change of the taxpayer’s domicile,
2. Discovery that the taxpayer’s books and records are kept in another district,
3. Change of domicile of an executor or administrator to another district, and
4. The effective administration of the tax laws.
No such rule exists that permits the transfer of an IRS examination for the sole purpose of the taxpayer’s convenience.
Which of the following statements is false regarding an IRS examination?
A. The taxpayer can be represented by a federally authorized practitioner or the person who prepared and signed the return.
B. In the event of a joint return, both spouses must meet with the IRS.
C. The examination may be moved to another district IRS office if the taxpayer’s books and records are kept in another district.
D. Prior to the examination, the IRS must furnish to the taxpayer an explanation of the audit or collection process.
In the event of a joint return, both spouses must meet with the IRS.
A taxpayer may act on his or her own behalf or have someone represent or accompany him or her. In the event that a joint return is filed, both spouses can, but are not required to, meet with the IRS.
Which of the following statements concerning the preparation of a case for appeal before an IRS appeals office is false?
A. A written protest is required if the proposed increase in tax is more than $25,000.
B. A written protest is not required for refunds.
C. Partnerships must submit written protests.
D. A protest prepared by a representative must declare whether (s)he knows personally that the statement of facts in the protest and the accompanying documents is true and correct.
A written protest is not required for refunds.
A written protest is required if the proposed increase or decrease in tax, including penalties or claimed refund, is more than $25,000.
Sam is the sole shareholder in an S corporation. The S corporation was examined and the IRS proposed a $20,000 deficiency. What must Sam do to request an appeals conference?
A. File a formal written protest.
B. Pay the deficiency.
C. Hire a federally authorized tax practitioner to represent the S corporation.
D. Nothing because he is eligible for the small case procedure.
File a formal written protest.
In order to request an appeals conference, the taxpayer must follow the instructions in the letter received from the IRS. The taxpayer needs to file a formal written protest in all partnership and S corporation cases without regard to the dollar amount.
Peter’s return was examined, and the result was additional tax of $36,000 due to unreported lottery winnings. Peter has received a letter notifying him of his right to appeal the proposed changes within 30 days. Which of the following should Peter do in preparing his appeal?
A. Call the examiner and request a conference.
B. Provide a brief written statement of the disputed issues.
C. Submit a written protest within the time limit specified.
D. Submit a written protest explaining additional expenses not previously claimed.
Submit a written protest within the time limit specified.
If a taxpayer wants an appeals conference, (s)he must follow the instructions in the IRS letter sent to him or her. A taxpayer whose proposed increase or decrease in tax, including penalties or claimed refund, is more than $25,000 must submit a written protest of disputed issues.
At the conclusion of an audit, the taxpayer can appeal the tax decision to a local appeals office. Which statement regarding appeal procedures is false?
A. If the total amount for any tax period is not more than $25,000, a formal written protest is not required.
B. A taxpayer may represent himself at an appeals conference.
C. Written protests do not require a signature.
D. All partnership and S corporation cases require formal written protests.
Written protests do not require a signature.
Publication 5 states that a taxpayer must sign a written protest stating that it is true, under the penalties of perjury.
Read the following statements regarding the Internal Revenue Service’s appeals system:
Because people sometimes disagree on tax matters, the IRS has an administrative appeals process.
Most differences can be settled within this system without expensive and time-consuming court trials.
A taxpayer cannot appeal his or her case based only on moral, religious, political, constitutional, conscientious, or similar grounds.
If a taxpayer does not want to appeal his or her case within the IRS, (s)he can take the case directly to court.
Select the best answer from the following options:
A. 1 and 2 are true; 3 and 4 are false.
B. 1, 2, and 3 are true; 4 is false.
C. All of the statements are true.
D. All of the statements are false.
All of the statements are true.
Because people sometimes disagree on tax matters, the IRS has established an appeals system. The IRS has concluded that most disagreements can be settled within this system without expensive and time-consuming court trials. However, the disagreements must arise within the scope of the tax laws. For example, a case cannot be appealed based only on moral, religious, political, constitutional, conscientious, or similar grounds. If a taxpayer wishes to bypass the IRS appeals system, (s)he may take his or her case directly to court.
Wesley timely filed his tax year 2016 Form 1040 tax return on April 15, 2017, and paid the $2,000 tax as shown on the return at the time of filing. The return was subsequently examined, and Wesley signed an agreement form for the proposed changes on January 31, 2018. He paid the additional tax due of $10,000 on March 31, 2018. In 2019, Wesley located missing records that he believes would make $5,000 of the additional assessment erroneous. Which of the following statements accurately states the date by which Wesley must file a claim for refund?
A. January 31, 2020, 2 years from signing the agreement form.
B. April 15, 2020, 3 years from the due date of the original return.
C. March 31, 2020, 2 years from when the additional tax was paid.
D. No claim for refund can be filed since an examination agreement form was signed.
April 15, 2020, 3 years from the due date of the original return.
Sections 6511(a) and (b) state that a claim for refund must be filed within 3 years from the time the return was due or 2 years from the time the tax was paid, whichever is later. Thus, the deadline would either be April 15, 2020 (3 years from the time the return was due), or March 31, 2020 (2 years from the time the tax was paid). Because April 15, 2020, is later, this is the date by which the claim for refund must be filed.
Which of the following statements relating to the statutory Notice of Deficiency is false?
A. If a taxpayer receives a Notice of Deficiency and sends money to the IRS without written instructions, the IRS will treat it as a payment, and the taxpayer will not be able to petition the Tax Court.
B. A Notice of Deficiency is not an assessment.
C. If the taxpayer consents, the IRS can withdraw any Notice of Deficiency. However, after the notice is withdrawn, the taxpayer cannot file a petition with the Tax Court based on the withdrawn notice, and the IRS may later issue a Notice of Deficiency greater or less than the amount in the withdrawn deficiency.
D. The Notice of Deficiency provides the taxpayer 90 days (150 days if the taxpayer lives outside the United States) to either agree to the deficiency or file a petition with the Tax Court for a redetermination of the deficiency.
If a taxpayer receives a Notice of Deficiency and sends money to the IRS without written instructions, the IRS will treat it as a payment, and the taxpayer will not be able to petition the Tax Court.
Normally, once a taxpayer pays the tax, the Tax Court does not have jurisdiction, and the taxpayer must file a claim for a refund in U.S. District Court or the U.S. Court of Federal Claims. However, Sec. 6213(b)(4) provides that payment of additional tax due after the mailing of a Notice of Deficiency does not deprive the Tax Court of jurisdiction over the deficiency. Section 6213(a) provides that a taxpayer may file a petition with the Tax Court for a redetermination of the deficiency within 90 days (or 150 if the taxpayer lives outside the U.S.) after the Notice of Deficiency is mailed. If 90 (or 150) days pass and a petition is not filed, taxes may be assessed, and the taxpayer must pay the tax and file a claim for refund.
D’s tax return for 2017 was examined by the IRS for contributions and medical expenses. The examination resulted in “no change” to his tax liability. He received notification of an examination for the same items for his 2019 tax return. What action should he take?
A. Notify the IRS of the prior year’s examination as soon as possible.
B. Do not respond to the audit notification.
C. Set up an appointment for the current examination and do not discuss the prior examination.
D. Call the IRS Problem Resolution Office.
Notify the IRS of the prior year’s examination as soon as possible.
If the same items were examined in either of the previous 2 years and the examination resulted in no change to the tax liability, the taxpayer should notify the person whose name and phone number appear in the appointment letter. The IRS will suspend but not cancel an audit (while reviewing its files to determine whether to proceed) so as to avoid repetitive examinations of the same items (Publication 556).
Which of the following statements concerning the procedure for a formal written protest submitted by a representative to obtain an appeals office conference is false?
A. A formal written protest is required when the tax due, including penalties, is more than $25,000.
B. A formal written protest must contain the tax years involved and a statement that the taxpayer wants to appeal to the appeals office.
C. A formal written protest must contain a statement of facts for each disputed issue and a statement of law or other authority relied upon for each issue.
D. A formal written protest must contain a declaration under penalties of perjury, signed by the taxpayer, that the statement of facts is true and correct.
A formal written protest must contain a declaration under penalties of perjury, signed by the taxpayer, that the statement of facts is true and correct.
Generally, a formal written protest must contain a sworn statement made by the taxpayer under penalty of perjury declaring that the statement of facts presented in the protest is true, correct, and complete. However, a substitute declaration may be submitted by the taxpayer’s representative stating that the representative prepared the protest and accompanying documents, and whether the representative knows personally that the statement of facts in the protest and the accompanying documents is true and correct.
The examination of Greta’s tax return for 2017 resulted in adjustments creating a tax liability in the amount of $30,000. Greta does not believe she owes anything. A Notice of Proposed Income Tax Deficiency is issued to Greta, who wants to appeal the Revenue Agent’s adjustments to the IRS Office of Appeals. Greta must file a written protest letter no later than which of the following periods? A. 10 days. B. 30 days. C. 90 days. D. None of the answers are correct.
30 days.
In order to request an appeals conference with the IRS, both Publication 5 and Publication 556 state that the taxpayer must follow the instructions in the letter received from the IRS. This letter should specify a time limit during which the taxpayer may file a protest. Publication 556 also states that, within a few weeks after the closing conference with the examiner and/or supervisor, the taxpayer will receive a package with a letter (known as a “30-day letter”) notifying him or her of his or her right to appeal the proposed changes within 30 days. The taxpayer generally has 30 days from the date of the 30-day letter to tell the IRS whether (s)he will accept or appeal the proposed changes.
A claim for refund must be filed
A. No later than 3 years after the due date.
B. No later than 2 years from the date you paid the tax.
C. No later than 3 years after the return due date (plus extension) or no later than 2 years from the date you paid the tax, whichever is later.
D. 4 years after making estimated payments.
No later than 3 years after the return due date (plus extension) or no later than 2 years from the date you paid the tax, whichever is later.
A claim for refund must be filed within 3 years from the due date (plus the filing extension time) or 2 years from the time the tax was paid, whichever is later. Section 6511(a) states that if no return was filed, the claim for refund is due within 2 years from the time the tax was paid.
Marty timely filed his federal income tax return for 2015. It was selected for examination. During the course of the examination, the Revenue Agent first assigned to the case retired. A second Revenue Agent proposed adjustments to the tax return that Marty believed were erroneous. The second Revenue Agent was assigned to an extended training assignment. Before going on training, Marty and the second Revenue Agent orally agreed that the statute of limitations could be extended to December 31, 2019. Which of the following statements is applicable in order for the IRS to protect its rights?
A. An assessment of income taxes must be made before December 31, 2019.
B. A Statutory Notice of Deficiency must be mailed on or before December 31, 2019.
C. A Statutory Notice of Deficiency must be mailed on or before April 15, 2019.
D. The assessment of tax can be made at any time.
A Statutory Notice of Deficiency must be mailed on or before April 15, 2019.
Because an agreement to extend the statute of limitations is not valid if it is not in writing, the IRS must mail the Statutory Notice of Deficiency within the statute of limitations period. Marty’s tax return for 2015 would have been due on April 15, 2016. Therefore, the IRS must mail the notice by April 15, 2019.
Which of the following statements with respect to the preparation of a case for appeal before an IRS appeals office is false?
A. The appeals office is the only level of appeal within the Internal Revenue Service.
B. A written protest of disputed issues is required in a situation in which the proposed increase in tax determined by examination is $2,300.
C. An S corporation must submit a written protest.
D. A written protest must contain a statement stating the law or other authority on which the taxpayer is relying.
A written protest of disputed issues is required in a situation in which the proposed increase in tax determined by examination is $2,300.
A written protest is required with the office named in the letter to the taxpayer if the total amount for any tax period is $25,000 or more. If the total amount for any tax period is not more than $25,000, a taxpayer may make a small case request instead of filing a formal written protest. The taxpayer must include a statement of facts supporting the taxpayer’s position on all disputed issues.
With respect to preparation of a case for IRS appeals, the following statements are true EXCEPT
A. A brief written statement of the disputed issue(s) is not required if the increase or decrease in tax, including penalties, or refund, determined by examination is more than $2,500 but not more than $10,000.
B. If the proposed increase or decrease in tax, including penalties or claimed refund is more than $25,000, the taxpayer must submit a written protest of the disputed issues, including a statement of facts supporting the taxpayer’s position on all disputed issues.
C. A declaration that the statement of facts is true under penalties of perjury must be added and signed by the taxpayer.
D. If a representative submits the protest for the taxpayer, (s)he must submit a declaration stating that (s)he submitted the protest and accompanying documents and whether (s)he knows personally that the statement of facts in the protest and accompanying documents are true and correct.
A brief written statement of the disputed issue(s) is not required if the increase or decrease in tax, including penalties, or refund, determined by examination is more than $2,500 but not more than $10,000.
A written protest is required with the office named in the letter to the taxpayer if the total amount for any tax period is $25,000 or more. If the total amount for any tax period is not more than $25,000, a taxpayer may make a small case request instead of filing a formal written protest. The taxpayer must include a statement of facts supporting the taxpayer’s position on all disputed issues.
On April 21, 2019, Vern, a calendar-year taxpayer, filed his 2014 through 2018 income tax returns. His tax was paid through withholding. The following was shown on the tax returns:
2014—amount owed—$300
2015—refund————-$500
2016—refund————-$400
2017—refund————-$100
2018–amount owed—$200
The taxpayer had not filed any extensions. What is the amount of refund due or tax owed by Vern?
A. $0
B. $500 refund.
C. $300 refund.
D. $400 tax owed.
$0
There is a 3-year statute of limitations on refunds of taxes paid. Any refunds for tax years with due dates before April 21, 2016, would be lost. Thus, the $500 refund for the 2015 return is lost. The refunds for the 2016 and 2017 tax years will exactly offset the amounts due for the 2014 and 2018 returns.
Joe, a calendar-year taxpayer, filed his federal income tax return, with a refund due, for tax year 2019 on April 1, 2020. The last day to timely file a claim for refund with respect to that return is
A. April 1, 2022.
B. April 15, 2022.
C. April 1, 2023.
D. April 15, 2023.
April 15, 2023.
A claim for a refund must be made within the statute of limitations periods for refunds. A claim must be filed by the later of 3 years from filing the return or 2 years after the tax was paid. An early return is treated as filed on the due date. Therefore, the due date for the 2019 tax year was April 15, 2020. Even though the return was filed early, the early return is treated as filed on the due date. Three years after the due date of April 15, 2020, is April 15, 2023.
Barry’s individual income tax return for 2018 was examined by the IRS, which resulted in a tax assessment in the amount of $10,000. Thereafter, Barry discovered papers which he believed would show that the IRS determination was erroneous. Barry can claim a refund of income taxes as follows:
A. Take a credit for the amount on his 2019 return.
B. File Form 1045, Application for Tentative Refund.
C. File an amended return within 3 years from the date he filed his original return for 2018 or 2 years from the date he paid the tax, whichever is later.
D. Immediately sue for a refund in court.
File an amended return within 3 years from the date he filed his original return for 2018 or 2 years from the date he paid the tax, whichever is later.
A claim for a credit or refund must be filed within 3 years of the due date (plus extension) of the original return, or 2 years from the date the tax was paid, whichever is later. Barry must file a claim–the amended return–by 3 years from April 15, 2019, or 2 years from the date he paid the assessment.
Charlie had income tax withheld from his wages during 2016 in the amount of $5,000. Charlie filed an automatic extension of time to file his tax return for that year to October 15, 2017, together with making an additional payment in the amount of $2,000 with the extension. Charlie filed his tax return on November 15, 2017, and paid the balance shown to be due on the return of $1,000 on that date. Charlie discovered an error in his return on November 1, 2019. On that same date, he filed a claim for refund in the amount of $6,000. Assuming the grounds set forth in the claim are proper, what refund can Charlie recover for 2016?
A. $6,000
B. $2,000
C. $1,000
D. $0
$1,000
Publication 556 states, “If you file your claim within 3 years after filing your return, the credit or refund cannot be more than the part of the tax paid within 3 years (plus any extension of time for filing your return) before you filed the claim.” The $5,000 withholding and the $2,000 paid with the extension do not fall within 3 years of a request for a refund. However, the $1,000 balance paid with the return was paid within the 3-year period for requesting a refund and is eligible for the refund.
If your tax return was examined for the same items in either of the 2 previous years and no change was proposed to your tax liability
A. You may ignore the examination notice.
B. You should call the Taxpayer Advocate Office (TAO) and file a complaint.
C. You should call the IRS as soon as possible to see if the examination should be discontinued.
D. You should write a letter to the Service Center and complain that the Revenue Agents are harassing you.
You should call the IRS as soon as possible to see if the examination should be discontinued.
The IRS should be notified to determine if the examination should be discontinued (Publication 556).
Mr. K, who lives in Dallas, Texas, received a letter from the IRS stating that the result of a recent field examination is a tax deficiency of $26,000. The examination was handled at Mr. K’s place of business by a revenue agent. The letter also states that Mr. K has a right to file a protest if he does not agree with the proposal. Generally, how many days does K have to file a written protest?
A. 15 days.
B. 30 days.
C. 60 days.
D. 90 days.
30 days.
If a formal written protest is required, it must be filed within the 30-day period granted in the letter transmitting the report of examination. A formal written protest is required when the change exceeds $25,000 for any taxable period.
All of the following should be contained in a written protest letter EXCEPT
A. A statement that the taxpayer wants to appeal the findings of the examiner to the appeals office.
B. The date and symbols from the letter showing the proposed adjustments and findings being protested.
C. Tax periods or years involved.
D. A statement indicating whether the examination was originally handled through correspondence, by a tax auditor, or by an IRS agent.
A statement indicating whether the examination was originally handled through correspondence, by a tax auditor, or by an IRS agent.
Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don’t Agree, provides that a written protest should contain a statement that the taxpayer wants to appeal the findings of the examining officer, the date and symbols from the letter transmitting the proposed adjustments and findings protested, the taxpayer’s name and address, the tax periods or years involved, an itemized schedule of the adjustments with which the taxpayer does not agree, a statement of facts supporting the taxpayer’s position on any contested factual issue, and a statement outlining the law or authority relied upon. A statement indicating whether the examination was originally handled through correspondence, by a tax auditor, or by an IRS agent is not required.
The Statutory Notice of Deficiency is also known as
A. A 30-day letter because the taxpayer generally has 30 days from the date of the letter to file a petition with the Tax Court.
B. A 90-day letter because the taxpayer generally has 90 days from the date of the letter to file a petition with the Tax Court.
C. An Information Document Request (IDR) because the taxpayer is asked for information to support its position regarding its liability for tax.
D. A notice and demand because the taxpayer is put on notice that the tax liability is due and owing.
A 90-day letter because the taxpayer generally has 90 days from the date of the letter to file a petition with the Tax Court.
Generally, the Tax Court hears cases before any tax has been assessed or paid. In order to petition, the taxpayer must first receive a notice of deficiency. A notice of deficiency is a 90-day letter (150-day letter if it is addressed to a taxpayer outside the U.S.) that requires a petition to be filed within 90 days (150 days for a taxpayer outside the U.S.) from the date the notice is mailed to the taxpayer. If the petition is not filed on time, the tax will be due within 10 days, and the case cannot be taken to Tax Court.
After the issuance of a Statutory Notice of Deficiency, failure to timely file a petition with Tax Court will result in which of the following?
A. The Internal Revenue Service will issue a 30-day letter.
B. The Internal Revenue Service will assess the tax it says the taxpayer owes.
C. The Internal Revenue Service will issue a 90-day letter.
D. You will be required to post a deposit before being allowed to request an extension for time to file a petition.
The Internal Revenue Service will assess the tax it says the taxpayer owes.
A notice of deficiency is a 90-day letter that requires a petition to be filed within 90 days from the date the notice is mailed to the taxpayer. If the petition is not filed on time, the tax will be due within 10 days, and the case cannot be taken to Tax Court. Thus, the IRS will assess the tax that it says the taxpayer owes.
In response to a preliminary (30-day) letter, a written statement discussing the facts and legal arguments must accompany a written request for an appeals conference in which of the following cases?
A. A $2,000 tax increase was proposed.
B. The tax return examination was made in an IRS office by a tax auditor.
C. The tax return examination was made by correspondence.
D. A disallowance of a $30,000 refund claim was proposed.
A disallowance of a $30,000 refund claim was proposed.
A brief written statement of disputed issues is required to obtain an appeals office conference in a field examination case if the change (i.e., additional taxes, interest, and penalties) exceeds $25,000 [26 CFR 601.106(a)(1)(iii)]. The statement must be filed within the 30-day period granted in the letter transmitting the report of examination.
