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

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Question 31

Multiple Choice

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Leslie made a mathematical mistake in computing her tax liability.Which audit program will likely catch Leslie's mistake?

A) DIF System.
B) Mathematical correction.
C) Document perfection.
D) Information matching.
E) None of these.

F) A) and B)
G) All of the above

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Question 32

Multiple Choice

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Which of the following audits is the most common and typically less comprehensive?

A) Correspondence.
B) Random.
C) Office.
D) Field.
E) None of these.

F) B) and E)
G) None of the above

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Question 33

Multiple Choice

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Edie would like to better understand a new code section enacted four weeks ago.Which of the following authorities will help Edie understand the newly enacted code section?

Mel recently received a 30-day letter from the IRS.Although his tax return being audited has several potential large issues (potential tax consequences of $70,000 - $80,000) ,the IRS agent auditing his return only identified one item that will require a more modest adjustment ($10,000) .Mel feels strongly that the $10,000 adjustment would not hold in court and was surprised that the IRS agent did not identify some of the other potential larger issues.What are Mel's choices with the 30 day letter and what factors should influence his decisions?

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 11^th 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.

Lindy,a tax intern,is beginning her 1^st tax research case for her employer.Her manager has given her a basic understanding of the facts and has identified the basic research question.Lindy is now ready to begin searching for relevant tax authorities.Describe the different types of research tools available to help a tax researcher locate relevant authority and identify which type may be especially useful for Lindy.

Which of the following has the highest authoritative weight?

Ramon's tax return was randomly selected for audit.Which IRS program likely selected Ramon's return for audit?

In a planning context,

If April 15^th falls on a Saturday,the due date for individual tax returns will be on Monday,April 17^th.

Corporations are required to file a tax return only if their taxable income is greater than:

Circular 230 was issued by:

Andy filed a fraudulent 2013 tax return on May 1,2014.The statute of limitations for IRS assessment on Andy's 2013 tax return should end:

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

If the President vetoes tax legislation,Congress:

Which of the following committees typically initiates for tax legislation?

Basu received a letter from the IRS that gave him the choice of (1) paying a proposed deficiency or (2) filing a petition with the U.S.Tax Court.Basu received the:

Dominic earned $1,500 this year,and his employer withheld $200 of federal income tax from his salary.Assuming that Dominic will have zero tax liability this year,he:

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

If a taxpayer has little cash and a very technical tax case that she feels very strongly that the tax rules are "on her side," she should prefer to have her case tried in the U.S.Tax Court.