Filing Requirements and Preparer's Penalties Flashcards
When are quarterly estimated tax payments due for corporations?
15th day of the 4th, 6th, 9th, and 12th months of its taxable year
When does underpayment penalty NOT apply for corporations?
Underpayment =100% of prior year tax liability
What is the time limit for claim of refund for individuals and corporations?
3 years after original tax return was filed or due
2 years after actual tax was paid
When are estimated payments due for individuals if required?
4th, 6th, 9th months of taxable year and by 15th of January
When does underpayment penalty NOT apply for individuals?
Underpayment =100% of prior year tax liability (110% if AGI >$150K)
Annualized income - payments in proportion to income to date
Current year - payments >=90% current tax liability
What are penalties for late payment and filing?
.5% per month for late payment
5% per month for late filing
Max = 25% of net tax owed
What is accuracy related penalty?
20% penalty if underpayment due to negligence, substantial understatement of income tax, substantial valuation overstatement, substantial overstatement of pension liabilities, or substantial gift or estate tax valuation understatement
What are statute of limitations once tax return is filed?
Starts running the day after the later of:
When return is due
When it is actually filed
Usually 3 years, increased to 6 years for gross negligence or >=25% income not included
Unlimited for fraud or failure to file
What are obligations of paid tax preparers?
Must sign return and provide tax ID number
Filed timely and copy provided to taxpayer
Must keep copy for 3 years
Make reasonable inquiries about taxpayer documentation
When are penalties assessed against preparers?
Knowingly do the following: Understate tax liability Give erroneous advice Endorse or negotiate refund check to own account Adopt frivolous position on tax issue
When can preparer escape liability based on exceptions of good faith and reasonable cause?
When error results from:
Using computerized tax service
Advice from another professional
Following advice from IRS
What are different likelihood standards?
More likely than not >50% success
Substantial authority - approximately 40% success
Realistic possibility - approximately 33% success
Reasonable basis - approximately 20% success
What are exceptions to confidential nature of tax information obtained from clients?
Respond to valid government order
Peer review
Permit electronic preparation or submission of return
What are tax return due dates?
Assuming 12/31 fiscal year end: 1040, 709, 1041 - 4/15 1065, 1120S - 3/15 with 6 month extension 1120 - 4/15 with 5 month extension 990 - 5/15 706 - 9 months after death
What are UDITPA rules?
Rent and royalty from real property - where located
Rent and royalty from personal property - where used
Capital G/L on real property - where located
Capital G/L on personal property - where located
Interest and dividends - where domiciled
Patents and copyrights - where used
