FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 17: Tax Practice and Ethics

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 81

Multiple Choice

Review LaterAdd Note

Review Later

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s) .

A) No return at all is filed.
B) An investment in a marketable security is worthless.
C) Taxpayer inadvertently omits an amount of gross income equal to 30% of the gross income stated on the return.
D) Taxpayer discovers an inadvertent overstatement of deductions equal to 30% of gross income.

E) B) and C)
F) A) and C)

Correct Answer

verified

Show Answer

Question 82

Multiple Choice

Review LaterAdd Note

Review Later

Ming (a calendar year taxpayer) donates a painting to a local art museum (a qualified charity) .The painting cost Ming $2,000 ten years ago and,according to one of Ming's friends (an amateur artist) ,is worth $40,000.On his income tax return,Ming deducts $40,000 as a Form 1040 charitable contribution.Upon later audit by the IRS,it is determined that the true value of the painting was $30,000.Assuming that Ming is subject to a 30% marginal Federal income tax rate,his penalty for overvaluation is:

A) $5,000.
B) $2,000.
C) $1,000.
D) $0.
E) $10,000 (minimum penalty) .

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

Correct Answer

verified

Show Answer

Question 83

Multiple Choice

Review LaterAdd Note

Jake,an individual calendar year taxpayer,incurred the following transactions. Assuming that any error in timely reporting these amounts was inadvertent,how much omission from gross income would be required before the six-year statute of limitations would apply?

Harold,a calendar year taxpayer subject to a 35% marginal income tax rate,claimed a Form 1040 charitable contribution deduction of $20,000 for a sculpture that the IRS later valued at $10,000.The applicable overvaluation penalty is:

Marco,a cash basis,calendar year taxpayer,filed his income tax return 50 days after the due date.Marco never extended his return,and with the return he paid the taxes that were due.What penalties will Marco incur,and how much is the penalty if his additional tax is $5,000? Disregard any additional interest he must pay.

The ____________________,a presidential appointee,is the "IRS's attorney."

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

Maria and Miguel Blanco are in the midst of negotiating a divorce.Because both parties are unwilling to share any current financial information,their joint Form 1040 for 2012 is not filed until October 31,2013,when the respective divorce attorneys forced them to cooperate.The Blancos should not be subject to any Federal late-filing penalties,because of the reasonable cause exception.

Quon filed an amended return,claiming a $100,000 refund.The IRS disallowed the refund,and it can assess a penalty if there was no reasonable basis of support for the refund claim,in the amount of ____________________% of the disallowed amount. or

The IRS targets high-income individuals for an audit rate that is much higher than that of the general populace.

About ____________________% of all Forms 1040 are audited each year.The rate is about ____________________% if income exceeds $1 million. or

Which of the following statements is incorrect as to the conduct of IRS income tax audits?