ITX - 33

Question 0

Personal exemption amount per person

Answer 0

$3950

Question 1

You must file a tax return for any year in which your gross income exceeds?

Answer 1

The standard deduction amount plus the applicable personal exemption amount

Question 2

Federal tax filing date: individual returns

Answer 2

File by April 15th (15th Day of the fourth month after the year ends)

Question 3

Federal tax filing date: Corporation returns

Answer 3

File by 15th day of the third month after the tax year ends

Question 4

Federal tax filing date: partnership returns, trusts, and estates

Answer 4

File by 15th day of the fourth month after the tax year ends

Question 5

Federal tax filing date: estimated tax payments are paid in four installments

Answer 5

April 15
June 15
September 15
January 15

Question 6

Federal tax filing date: Extensions for individuals

Answer 6

6 months until October 15th

Question 7

Federal tax filing date: Extensions for corporations

Answer 7

6 months after the original due date

Question 8

Federal tax filing date: Extensions for partnerships

Answer 8

5 months after the original due date

Question 9

Failure to file any tax return: the penalty is___. The maximum penalty amount is___.

Answer 9

5% per month (or fraction thereof) during which a return is not filed

25% of the tax due

Question 10

Individual: If the tax return is more than 60 days late, the penalty will not be less than the lesser of___.

Answer 10

$135 or 100% of the tax due

Question 11

Taxes: Which entity qualifies for an automatic six-month extension for filing returns from time for filing due date? Which entities must file an application for extension in order to qualify for an automatic six-month extension for filing returns from time for filing due date, if filed by the original return due date?

Answer 11

• Corporations

- Individuals, trusts, and estates

Question 12

The tax penalty for failing to file S corporation or partnership returns on time is___.

Answer 12

$195 per quarter or shareholder per month or part of a month that the failure continues (up to maximum of 12 months)

Question 13

Amended income tax returns are filed on___.

Answer 13

Form 1040X

Question 14

Amended returns: the general limitations period on assessments is___from the date the return was filed.

Answer 14

Three years

Question 15

Who can represent clients before the IRS? Who can represent clients before the Tax Court?

Answer 15

Attorneys, enrolled actuaries, CPAs, and enrolled agents

Attorney and CPAs

Question 16

A client must designate a representative in dealing with the IRS by using Form___.

Answer 16

2848

Question 17

Tax Audit: A taxpayer must provide a power of attorney (Form___) for representation in the absence of the taxpayer.

Answer 17

2848

Question 18

Appeals from assessments: either the disagreement will be settled at the supervisor level, or the IRS will send a___.

Answer 18

30-day letter

Question 19

The statute of limitations on unfiled tax returns is___years. If the tax liability was understated by___, the statute of limitations extends to___years, and if fraud is shown, there is no statute of limitations.

Answer 19

3
25%
6

Question 20

A disagreement with the findings on a 30-day letter may be appealed to the___.

Answer 20

IRS office of appeals

Question 21

Taxpayers who disagree with the result of an audit conference or notice of deficiency have___days (___days if their address is outside the US) from the date of the letter or the conference to appeal to the US Tax Court.

Answer 21

90

150

Question 22

The main advantage of taking the case to the Tax Court is?

Answer 22

The taxpayer does not have to first pay the outstanding tax liability in dispute

Question 23

If the tax payer wants a jury trial, this will take place at the?

Answer 23

District Court

Question 24

Alternative routes for appeal involve payment of the amount in dispute and then filing for a tax refund in the ___, if the taxpayer paid the taxes and the IRS denied the refund claim.

Answer 24

US District Court or the US Court of Federal Claims

Question 25

A taxpayer who prevails in court proceedings may collect reasonable litigation costs, including attorneys fees (___per hour) from the IRS if all alternatives exhausted prior to litigation, and the litigation was not unduly postponed by the taxpayer. A request for these costs must be filed within___days of the final determination of tax liability.

Answer 25

$190

90 days

Question 26

A penalty of___(or, if greater, 50% of preparer’s fee) per incident may be assessed against a tax preparer who takes an unrealistic position on a tax issue, which results in an understatement of tax liability. This penalty increases to___ (or, if greater, 50% of preparer’s fee) if the tax preparer acted willfully. The___penalty is also assessed against those promoting abusive tax shelters.

Answer 26

$1000
$5000
$5000

Question 27

Misuse of confidential information in relation to tax return information and preparation, the IRS can assess up to___per disclosure (maximum of___per year). If done recklessly, a planner could face a jail sentence.

Answer 27

$250

$10,000

Question 28

When professionals knowingly prepare returns with the intent to deceive and derive benefit from these fraudulent returns, they may be prosecuted criminally, with penalties up to ___ per return.

Answer 28

$100,000

Question 29

A professional preparing a tax return for a client who fails to follow the three procedures can result in fines___per incident.

Answer 29

$50

Question 30

The penalty is 20% of the understatement of tax if the discrepancy is due to the client’s:

Answer 30

1) disregard of tax rules
2) substantial understatement of income tax (more than either 10% of the tax shown on the return or $5000 – whichever is greater)
3) substantial valuation misstatement (150% or more of the determined amount)

Question 31

The penalty for fraud is ___ of the understatement attributable to the fraud and takes the place of the accuracy-related penalty.

Answer 31

75%

Question 32

Decisions of the tax court and the District Court may be appealed to the___.

Answer 32

Circuit court of appeals

Question 33

The only appeal from the appeals court is the ___.

Answer 33

Supreme Court

Question 34

Taxes: failure to file timely applies to___, not to___.

Answer 34

Individuals and corporations

S corporations or partnerships

Question 35

Interest and penalties: failure to pay

Answer 35

1/2% of tax due per month; maximum of 25%

Question 36

Interest and penalties: negligence or understatement (“accuracy-related”)

Answer 36

20% of understatement

Question 37

Interest and penalties: failure to file timely

Answer 37

5% of tax due per month, maximum of 25%; minimum penalty if over 60 days late

Question 38

Interest and penalties: Fraud

Answer 38

75% of understatement

Question 39

Interest and penalties: underpayment

Answer 39

Interest (not penalty) is keyed to the short-term federal rate

Question 40

For dependent children, a return must be filed if there is any ___ income and gross income exceeds $___, or if there is only earned income and it excess___.

Answer 40

unearned
$1,000
the standard deduction amount for single taxpayers

Question 41

Any taxpayer with $___ or more of self-employment income must file a return.

Answer 41

$400