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Exam 2: Tax Compliance, the Irs, and Tax Authorities

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Question 51

Multiple Choice

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Rowanda could not settle her tax dispute with the IRS at the appeals conference.If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency,Rowanda should litigate in the:

A) U) S.District Court.
B) U) S.Circuit Court of Appeals.
C) U) S.Court of Federal Claims.
D) Tax Court.
E) None of the choices are correct.

F) A) and D)
G) B) and D)

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Question 52

Multiple Choice

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Martin has never filed a 2018 tax return despite earning approximately $30,000 providing landscaping work in the community.In what tax year,will the statute of limitations expire for Martin's 2018 tax return?

A) 2021.
B) 2022.
C) 2025.
D) 2026.
E) None of the choices are correct.

F) B) and C)
G) B) and E)

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Question 53

Multiple Choice

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Jaime recently found a "favorable" trial level court opinion directly on point for her tax question.Which trial level court would she prefer to have issued the opinion?

Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?

Carey was researching a tax issue and located what appears to be a favorable IRS regulation.He knows that regulations serve different purposes and are issued in different forms.Which purpose and which form of regulation would provide Carey the most confidence that he has found an authority that carries a lot of weight for the long term? How could Carey check the status of this regulation?

As required by the Constitution,all tax bills are supposed to originate in the House of Representatives.

For fraudulent tax returns,the statute of limitations for IRS assessment is ten years.

In researching a tax issue,Eric finds that the U.S.Circuit Court of Appeals for the Federal Circuit previously has ruled in favor of his tax position,whereas the 11ᵗʰ Circuit (Eric's circuit)previously has ruled against his tax position.If Eric is contemplating litigating his tax position with the IRS,he should prefer to have his case first tried by the U.S.Tax Court.

Kodak is a beginning tax researcher.He knows that the 1ˢᵗ step of the research process is to get an understanding of the facts surrounding the transaction being researched.Describe the two basic types of facts,the sources of facts for a research project,and any advice that may help Kodak.

The regulation with the lowest authoritative weight is the:

Tyrone claimed a large amount of charitable contributions as a tax deduction relative to taxpayers with similar levels of income.If Tyrone's tax return is chosen for audit because of his large charitable contributions,which audit program likely identified Tyrone's tax return for audit?

The IRS DIF system checks each tax return for mathematical mistakes and errors.

A taxpayer can avoid a substantial understatement of tax penalty:

Which of the following committees typically initiates tax legislation?

Mary Ann is working on a pretty big research project.Her manager has alerted her to the possibility that some of her research questions are likely to be questions of fact,whereas others are likely to be questions of law.Explain the difference between the two types of questions and how this would influence her research.

Houston has found conflicting authorities that address a research question for one of his clients.The majority of the authorities provide a favorable answer for his client.Nonetheless,there are several authorities that provide an unfavorable answer.Houston estimates that if the client takes the more favorable position on its tax return that there is approximately a 60 percent chance that the position will be sustained upon audit or judicial proceeding.If the client takes this position on its tax return,will Houston be subject to penalty? Will the client potentially be subject to penalty?

Andy filed a fraudulent 2018 tax return on May 1,2019.The statute of limitations for IRS assessment on Andy's 2018 tax return should end:

Closed facts are especially conducive to tax planning.

The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing status.

A tax practitioner can avoid IRS penalty relating to a tax return position: