Question 1

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

Accepted Answer

The answer of According to the IRS,the annual "Tax Gap"...

Question 2

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

Accepted Answer

A) True 
 B)False

Question 3

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

Accepted Answer

The IRS has engaged in the fol...

Question 4

Gloria,a calendar year taxpayer subject to a 35% marginal income tax rate,claimed a charitable contribution deduction of $800,000 for a sculpture that the IRS later valued at $100,000.The applicable overvaluation penalty is:

Accepted Answer

A)  $245,000.
B)  $98,000.
C)  $49,000.
D)  $10,000 (maximum penalty) .E) B) and C)
F) None of the above

Question 5

Latrelle prepares the tax return for Whitehall Corporation.Latrelle includes a $5,000 deduction on the return.This type of deduction previously has been disallowed by the Tax Court,although there is a 15% chance that the holding will be reversed on an appeal.The return does not make any special disclosure that the deduction is being claimed.Whitehall paid Latrelle a fee of $3,000 for preparing the Form 1120.Latrelle will be assessed a preparer penalty of $1,000 for taking an unreasonable position on the Whitehall return.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  An estate is not required to make estimated payments.
B)  A trust must make estimated payments if its Federal income tax liability for the year will exceed $500.
C)  A C corporation must make estimated payments if its Federal income tax liability for the year will exceed $250.
D)  An individual must make estimated payments if his or her balance due for the Federal income tax for the year will exceed $1,000.E) A) and B)
F) A) and C)

Question 7

With respect to the audit process,which of the following statements is incorrect?

Accepted Answer

A)  Only the Appeals Division of the IRS has the authority to settle tax disputes based on the hazards of litigation.
B)  The IRS does not publish the factors it uses for audit selection purposes annually in the Commissioner's Report.
C)  For a Form 1040 that is filed on April 11,2011,if the taxpayer has not received an audit notification from the IRS by the end of 2011,the return may still be audited.
D)  If the taxpayer makes a math error on the Form 1040,an office audit automatically is triggered.E) All of the above
F) C) and D)

Question 8

George,a calendar year taxpayer subject to a 45% marginal gift tax rate,made a gift of a sculpture to Redd,valuing the property at $100,000.The IRS later valued the gift at $140,000.The applicable undervaluation penalty is:

Accepted Answer

A)  $7,200.
B)  $3,600.
C)  $1,000 (minimum penalty) .
D)  $0.E) A) and D)
F) A) and C)

Question 9

The privilege of confidentiality applies to a CPA tax preparer concerning the client's information relative to:

Accepted Answer

A)  Financial accounting tax accrual workpapers.
B)  A tax research memo used to determine an amount reported on the tax return.
C)  Building a defense against a penalty assessed for the use of a tax shelter.
D)  Building a defense against a charge brought by the SEC.E) A) and B)
F) A) and C)

Question 10

Under Circular 230,a return must be signed as a preparer,even if it was completed for no charge as a favor to a friend or relative.

Accepted Answer

A) True 
 B)False

Question 11

With respect to the audit process,which statement is correct?

Accepted Answer

A)  Office audits are conducted at the office of the taxpayer.
B)  The most common type of Federal income tax audit is the correspondence audit.
C)  An office audit typically is used for a business taxpayer.
D)  A correspondence audit usually is concluded after a meeting with the taxpayer at the IRS auditor's office.E) A) and C)
F) C) and D)

Question 12

The rules of Circular 230 need not be followed by:

Accepted Answer

A)  An attorney.
B)  A CPA.
C)  A Wal-Mart cashier who e-files 15 tax returns for her paying clients per filing season.
D)  An enrolled agent.
E)  All of the above are subject to the Circular 230 rules.F) C) and D)
G) A) and B)

Question 13

A C corporation is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

Accepted Answer

The answer of A C corporation is not subject to...

Question 14

The Statements on Standards for Tax Services are issued by the:

Accepted Answer

A)  IRS.
B)  Sarbanes-Oxley Commission.
C)  AICPA.
D)  SEC.E) A) and C)
F) B) and C)

Question 15

To file for a tax refund,a C corporation generally uses Form ____________________.

Accepted Answer

The answer of To file for a tax refund,a C...

Exam 26: Tax Practice and Ethics

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

Correct Answer
verified

The privilege of confidentiality applies to a CPA tax preparer concerning the client's information relative to:

Correct Answer
verified

A C corporation is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

Correct Answer
verified

With respect to the audit process,which statement is correct?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

George,a calendar year taxpayer subject to a 45% marginal gift tax rate,made a gift of a sculpture to Redd,valuing the property at $100,000.The IRS later valued the gift at $140,000.The applicable undervaluation penalty is:

Correct Answer
verified

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

Correct Answer
verified
The IRS has engaged in the fol...
View Answer

Under Circular 230,a return must be signed as a preparer,even if it was completed for no charge as a favor to a friend or relative.

Correct Answer
verified

The rules of Circular 230 need not be followed by:

Correct Answer
verified

The Statements on Standards for Tax Services are issued by the:

Correct Answer
verified

Gloria,a calendar year taxpayer subject to a 35% marginal income tax rate,claimed a charitable contribution deduction of $800,000 for a sculpture that the IRS later valued at $100,000.The applicable overvaluation penalty is:

Correct Answer
verified

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

Correct Answer
verified

With respect to the audit process,which of the following statements is incorrect?

Correct Answer
verified

To file for a tax refund,a C corporation generally uses Form ____________________.

Correct Answer
verified

Exam 26: Tax Practice and Ethics

A tax preparer cannot disclose to a mortgage banker the client's income level,or other information acquired by preparing the return,without the client's permission.

Correct AnswerverifiedShow Answer

The privilege of confidentiality applies to a CPA tax preparer concerning the client's information relative to:

Correct AnswerverifiedShow Answer

A C corporation is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

Correct AnswerverifiedShow Answer

With respect to the audit process,which statement is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

George,a calendar year taxpayer subject to a 45% marginal gift tax rate,made a gift of a sculpture to Redd,valuing the property at $100,000.The IRS later valued the gift at $140,000.The applicable undervaluation penalty is:

Correct AnswerverifiedShow Answer

List several current initiatives that the IRS has undertaken in its effort to enforce the revenue laws of the U.S.

Correct AnswerverifiedThe IRS has engaged in the fol...View AnswerShow Answer

Under Circular 230,a return must be signed as a preparer,even if it was completed for no charge as a favor to a friend or relative.

Correct AnswerverifiedShow Answer

The rules of Circular 230 need not be followed by:

Correct AnswerverifiedShow Answer

The Statements on Standards for Tax Services are issued by the:

Correct AnswerverifiedShow Answer

Gloria,a calendar year taxpayer subject to a 35% marginal income tax rate,claimed a charitable contribution deduction of $800,000 for a sculpture that the IRS later valued at $100,000.The applicable overvaluation penalty is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

With respect to the audit process,which of the following statements is incorrect?

Correct AnswerverifiedShow Answer

To file for a tax refund,a C corporation generally uses Form ____________________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The IRS has engaged in the fol...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified