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

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Question 61

True/False

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Corporations are required to file a tax return annually regardless of their taxable income.

A) True
B) False

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Question 62

Multiple Choice

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Which of the following audits is the least common, broadest in scope, and typically most complex?

A) Correspondence.
B) Targeted.
C) Office.
D) Field.
E) None of the choices are correct.

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

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Question 63

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?

The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S. Senate.

Temporary regulations have more authoritative weight than revenue rulings.

If Paula requests an extension to file her individual tax return in a timely manner, the latest she could file her return without a failure-to-file penalty is:

Lavonda discovered that the 5^th Circuit (where Lavonda resides) has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:

Under the Statements on Standards for Tax Services, a CPA may recommend a tax return position if the position is frivolous and the position is not disclosed on the tax return.

Raul was researching an issue and found two tax court decisions issued within six months of each other, one for a taxpayer residing in California and the other for a taxpayer residing in New York, whose rulings were inconsistent. Raul knows that the federal tax law does not differ by state and the issue was exactly the same in both cases. Raul is confused because he thought that a basic judicial doctrine was that a court is supposed to rule consistently. Name and describe this judicial doctrine that requires judicial consistency and discuss why the tax court may have intentionally ruled inconsistently in this example.

The regulation with the lowest authoritative weight is the:

Kim has decided to litigate a tax issue with the IRS. Describe the trial - level courts that Kim may use to litigate the case.

Henry filed his 2019 tax return on May 15^th, 2020. The statute of limitations for IRS assessment on Henry's 2018 tax return should end: