R5 Flashcards
What are Primary Tax Sources?
•IRC, Regulations, Rev Rulings and Rev Procedures, Court Cases.
What is Substantial Authority?
•>33%
What is a Tax Shelter?
•Any (I) partnership or other entity; (ii) investment plan or arrangement; or (iii) other plan or arrangement if a significant purpose of such activity is avoidance or evasion of tax.
When is a tax preparer Liable for positions? In terms of Disclosure.
- Reasonable Basis: Must Disclose.
- Substantial: Do not need to Disclose
- More Likely Than Not: No Need to disclose unless a tax shelter.
What is a tax preparer’s penalty for understatement of taxpayer liability?
Greater of 1K or 50% of income received.
How long must a tax preparer retain records?
3 Years
Who has the burden of proof in a civil penalty?
The IRS.
Who does IRS Circular 230 apply to?
Practitioners in front of the IRS.
When can a tax practitioner charge a contingent fee?
- IRS examination or audit
- Claim solely for a refund of interest and/or penalties; or
- A judicial proceeding arising under the IRC.
What basis is required to sign a position under the IRC?
•Reasonable Basis standard.
What organization has the power to revoke licenses?
•State Board of Accountancy.
Who makes up the PCAOB? What are their duties?
- 2 CPAs, 3 Non CPAs
* Register Firms, Establish Rules, Conduct Inspections.
How often are firms inspected by the PCAOB?
- Large Firms: Annually
* Small Firms: Tri Annually
What is the failure to file penalty? Failure to Pay Penalty?
- Failure to File: 5% Per Month
* Failure to Pay: .5% Per Month
When are Individual Estimated Income Tax Payments made? When are corporate estimated income tax payments made?
- April 15, June 15, September 15, January 15
* April 15, June 15, September 15, December 15
Who has to make estimated tax payments?
-If Tax liability > 1K
- 90% CY
- 100% of PY, 110% PY if AGI >150K
