R2- Statue of Limitations and Estimated Taxes

Question 1

What is the statute of limitations for Assessment?

Answer 1

3 yrs from later of -

1. due date of return OR
2. date return is filed

Question 2

What is the statute of limitations for Assessment for 25% understatement of Gross Income?

Answer 2

6 yrs

Question 3

What is the statute of limitations for Assessment for Fraud?

Answer 3

Forever

Question 4

What is the statute of limitations for Refunds?

Answer 4

Use Form 1040x
3 yrs from the date of return was filed or original due date of the return
OR
two yrs from the time tax was not paid

Question 5

What is the statute of limitations for Bad Debts, Worthless Stock?

Answer 5

7 yrs bad luck

Question 6

Tax payments include?

Answer 6

1. Taxes withheld from paychecks
2. estimated taxes paid
3. excess FICA withheld from two or more employers

Question 7

Estimated Taxes - Req’d Minimum

Answer 7

1. 1000 or more tax liability
2. Inadequate tax estimates
   a. 90% of current year tax
   OR
   b.100% of last year’s tax
3. even if 0 tax liability last yr
4. exception: if gross income of 150,000 in the prior yr, 110% of prior yr tax as estimated payments

Question 8

Failure to pay estimated taxes?

Answer 8

Penalty

No Penalty if tax due under 1000

Question 9

Witholding tax

Answer 9

treated as estimated payments