Tax Research and Practice Flashcards
Nonfiling penalty
5% per month, max of 25% of tax due
Underpayment penalty
None if tax due $1,000
No penalty if tax payments during year:
- at least 90% current year taxes
- 100% last years taxes. (110% for AGI >$150K)
Nonpayment penalty
Penalty AND Interest
Starts on due date for filing
0.5% of underpayment per month (up to 25% in total)
If both nonpayment and nonfiling penalties are in effect, then man penalty is 5% of tax due per month
Neither penalties are imposed if TP has reasonable cause for failing to file or pay
Accuracy penalty
20% of tax due
40% for “gross misvaluation”
75% for fraud + 50% interest
Statue of Limitations
Primarily 3 years from the
Later of due date or filing date
Extended to 6 years if >25% gross income understated
Never expires if fraud or TP fails to file return
Statute of Limitations for Claiming a Refund
Form 1040X
Later of:
2 years from payment of tax, or
3 years from filing date (April 15)
Filing deadline & extension for Individual (1040)
15th day of 4th month (April 15)
6 month extension
Filing deadline & extension for partnership (1065)
15th day of 4th month
5 month extension
Filing deadline & extension for Corporation (1120) & S Corporation (1120S)
15th day of 3rd month (March 15)
6 month extension
Filing deadline & extension for Fiduciaries (Estates and Trusts)
15th day of 4th month
5 month extension
Estate INCOME TAX Return: 9 months from DOD, 6 month extension
Filing deadline for Estate Tax Return
9 months after DOD
6 month extension
Who may practice before the IRS?
Attorneys
CPAs
Agents
Must a TP respond to a 30-day letter?
No.
Weighting of Authority
Legislative
- U.S. Constitution
- IRC
- Treaty
Administrative
- Regulations
- Revenue Rulings
- Private Letter Rulings
Judicial
- Level of court
- Legal residence of TP
- Date of decision
Courts of Original Jurisdiction. Pay first? Jury?
Tax Court - No pay, no jury
District Court - Pay, Jury
Court of Federal Claims - Pay, no jury
Tax Court - Small Cases Division
- $50,000 or less
- No appeal
Administrative Authority (order of authority)
*Regulations
-Legislative
-Interpretive
-Procedural
each may be:
-proposed
-temporary (3 years)
-final
- Revenue Rulings
- Private Letter Rulings (PLRs)
- Revenue Procedures
- Technical Advice Memos
Where must all tax bills originate? Which committee of the Senate reviews the bill after the House of Reps?
Originate in the House Ways and Means Committee
Then moves to House of Reps
Then to Senate FINANCE Committee
Joint Conference Committee
President
-Congress can override president veto with 2/3 vote
