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Exam 26: Tax Practice and Ethics

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Question 1

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Silvio,a cash basis,calendar year taxpayer,filed his income tax return 75 days after the due date.Silvio never extended his return,and with the return he paid the full amount of taxes that were due.What penalties will Silvio incur,and how much is the penalty if his additional tax is $5,000? Disregard any additional interest he must pay.

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The penalties cannot...

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Question 2

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According to the IRS,the annual "Tax Gap" totals over $______________________ billion.

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400
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fo...

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Question 3

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A CPA,an attorney,and a(n) ____________________ can represent taxpayers before the IRS in an Appeals conference.

A taxpayer can take a dispute to the ____________________ Division of the Tax Court when the disputed amounts do not exceed $50,000.

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Misstatement of withholding allowances.

Recently,the overall Federal income tax audit rate for the Form 1040 has been under 1%.

Troy Center Ltd.withheld from its employees' paychecks $200,000 in Federal income and Social Security taxes for the Monday,June 30 payroll.It then spent the $200,000 on equipment upgrades,missing altogether the July 2 due date for the tax remittances.How much does Troy now owe the government in taxes and penalties? Ignore interest accruals,and assume that the Treasury can prove that Troy's redirecting of the tax withholdings was willful.

​Young-Eagle files her 2018 Form 1040 on March 1,2019.The Federal tax statute of limitations for this return expires on:

A tax professional needs to know how the IRS is structured and how it works to carry out its mission.Evaluate this statement.

A negligence penalty is assessed when the taxpayer is found to have not made a reasonable attempt to comply with the tax law.

The penalty for substantial understatement of tax liability does not apply if:

In the case of bad debts and worthless securities,the statute of limitations on claims for refund is three years.

Chung's AGI last year was $180,000.Her Federal income tax came to $45,000,which she paid through a combination of withholding and estimated payments.This year,her AGI will be $250,000,with a projected tax liability of $60,000,all to be paid through estimates.Ignore the annualized income method.Compute Chung's quarterly estimated payment schedule for this year.

The general statute of limitations regarding Federal tax returns extends for ____________________ years.It is ____________________ years if a substantial understatement of income is found,and ____________________ years with respect to worthless securities.

The tax penalty imposed on appraisers:

For purposes of tax penalties,a VITA volunteer is not classified as a tax return ____________________.

The AICPA's Statements on Standards for Tax Services provide principles-based guidelines as to how a tax professional should conduct business.

In a criminal tax fraud case,the burden is on the taxpayer to show that he or she was innocent "beyond the shadow of any reasonable doubt."

Concerning a taxpayer's requirement to make quarterly estimated tax payments:

CPA Norma and her client Colin hold a privilege of confidentiality from the IRS,as to their tax planning discussions about completing Colin's tax returns.The IRS cannot successfully subpoena records concerning these discussions.