Taxpayer Supporting Documentation

Question 1

Taxpayers must keep records until

Answer 1

the period of limitations expire

Question 2

Period of Limitations

Answer 2

time that Tax payer can amend a return or the IRS can go after additional taxes

Question 3

Most things by a Tax Payer Period of Limitations is for 3 years except

Answer 3

Taxpayer with employees (4 Years)

Not reporting income in excess of 25% (6 Years)

Claim for bad debt or worthless securities (7 years)

Question 4

What is period of limitations for Filing a Claim for refund after original return was filed

Answer 4

LATER of

3 years after return was due OR

2 years after Tax was paid

Question 5

How is a payment proved

Answer 5

Cash Receipt

Financial Account Statement

Credit Card Statements

Canceled Checks

Substitute Checks

Question 6

A Tax Preparer is not required to verify each document provided by the tax payer BUT

Answer 6

should advise the taxpayer that the IRS can request and examine any documents.

Question 7

What are the 2 methods for maintaining Records?

Answer 7

Checkbook Method

Electronic Method

Question 8

Under Electronic Method what does the IRS require?

Answer 8

Electronic Storage Method

Question 9

All Electronic Storage Systems MUST

Answer 9

convert stored books into readable format

provide complete and accurate data that is accessible to the IRS

Subject to the same guidelines as hard copy books. (IRS pub 552).

Question 10

To get a FULL Refund

Answer 10

must request amended return within 3 years from the ORIGINAL DUE DATE

Question 11

Only payment made during the 3 year period

Answer 11

are claims that a Taxpayer is eligible for.