Study Unit 3 Flashcards
What are the three sources of federal tax law?
- Legislative law
- Administrative law
- Judicial law
What is the primary source of federal legislative tax law?
The Internal Revenue Code of 1986 (IRC)
Give examples of Federal administrative law.
Administrative law implemented and enforced by the Treasury Department includes
* Treasury regulations * Revenue rulings * Revenue procedures * Private Letter rulings (PLRs) * Technical Advice Memoranda (TAMs) * Internal Revenue Bulletins (IRBs) * IRS Publications
What is a writ of certiorari?
A writ if certiorari is a order by the Supreme Court to hear a case. A denial of such an order means the lower court’s opinion on the case stands.
What are the different courts in the federal tax court system?
Appellate Courts:
U.S. Supreme Court
U.S. Circuit Court of Appeals U.S. Court of Appeals for the Federal Circuit
Trial or courts of origin:
U.S. Tax Court U.S. District Court U.S. Court of Federal Claims
What are the due dates or estimated tax payments for a calendar-year taxpayer?
Estimated tax payments should be made in quarterly installments that are due by
* April 15 * June 15 * September 15 * January 15 of the next year
How is the amount of estimated tax payment of an individual taxpayer determined?
Each installment must be at least 25% of the lowest of
- 100% [110% of AGI > $150,000 ($75,000 for MFS)] of the prior year’s tax
- 90% of the current year’s tax
- 90% of the annualized current year’s tax (when income is uneven)
When is the penalty not imposed on underpaying the estimated tax payments?
The penalty is not imposed when
- Actual tax liability for the current year is less that’s $1,000
- No tax liability in the prior tax year
- The IRS waives it for reasonable causes
What are the penalties for (1) failing to file a return and (2) failing to pay tax?
Offense Penalty
Failing to file a tax return 5% per month of unpaid liability (up to 25%)
Failing to pay tax 0.5% per month of unpaid liability (up to 25%)
What are the original and extended tax return due dates for C corporations?
Tax Year Type Due dates through 2025 June 30 Fiscal year Original: 3rd Month (Sept 15) Extended: 10th month (April 15) Due dates beginning in 2026 Original: 4th month (Oct 15) Extended: 10th month (April 15)
Calendar/other fiscal year Original: 4th month after year end
Extended: 10th month after year end
What are the original and extended due dates for (1) S corporations, (2) partnerships, (3) individuals?
Return Type Original Due Date Extended Due Date
S corporation March 15 September 15
Partnership March 15 September 15
Individual April 15 October 15
What is the statute of limitations for a claim for refund?
Situation A claim for refund must be filed
Return filed By the later of
* 3 years for the due date (April 15, plus the filing extension time) * 2 years after the tax was paid
Return not filed Within 2 years from the time the tax was paid
What are 30-day letters and 90-day letters?
30 Day Letter A letter sent to a taxpayer proposing in addition to tax. Taxpayers have 30 days to decide whether to
- Accept and pay the deficiency or - Appeal the proposed adjustments.
90 day letter If taxpayer appeal the proposed adjustments in a 30 day letter, a 90-day letter is mailed. Tax payers
(Notice of deficiency) have 90 days to institute a petition to the U.S. Tax Court.
What is the statute of limitations for the assessment of a deficiency?
General Statute of limitations - 3 years from the date the return was filed
Omission of items of more than 25% of gross income - 6 years from the date the return was filed
Deficiency for fraud - No statute of limitations/unlimited assessment period
What are the three types of tax planning?
- Timing of income recognition
- Shifting of income among taxpayers and jurisdictions
- Conversion of income among high- and low-rate activities