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7/21/2018
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Course 641001- IRS Audits
  Final Exam
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641001v - IRS Audits

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Taxation
20 CPE Credit Hours

7/21/2018
Final Exam
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Read 'Chapter 1: Inside the IRS: What You Need to Know About IRS operations' & answer the following question(s):
1. The IRS is a branch of the US Treasury Department.
2. The IRS Examination unit is the police force of the IRS and its employees are called Special Agents
3. Major problems you may encounter when dealing with the IRS include:
4. Your transcript of your accounts with the IRS is called a(n):
5. A tax return transcript furnished by the IRS is actually just a copy of your tax return as filed.
6. The IRS writes the tax laws.
7. In 1913 the tax rate on individuals and corporations was:
8. The IRS' job is to determine whether or not you obeyed the self-assessment principle by:
9. IRS Service Centers annually process about 200 million tax returns per year.
10. The IRS is characterized by low morale and high employee turnover.
11. Bureaucracy is a problem you will encounter with the IRS?
Read 'Chapter 2: Filing Tax Returns: If You Haven't Filed and Other Concerns' & answer the following question(s):
12. A TDI is an IRS search for a taxpayer to find out why he didn't file a tax return.
13. The IRS is most likely to notify a non-filer by:
14. The IRS has the power to prepare and file a tax return for you whenever you don't file.
15. If you're late filing, it's better to wait for the IRS to contact you before filing yourself.
16. If you owe taxes, a willful failure to file a tax return is a misdemeanor.
17. If your late tax return shows taxes due, you may also be charged:
18. Interest paid on a personal tax bill is deductible in the year in which it is paid.
19. The tax practitioner - client privilege prohibits the IRS from forcing the tax practitioner to disclose client information in criminal tax proceedings.
20. The IRS may not deny a refund if you file your return late.
21. The time limit for criminally prosecuting a non-filer is seven years.
22. Suggestion(s) for reducing your chance of being audited include:
Read 'Chapter 3: Winning Your Audit' & answer the following question(s):
23. The statute of limitations starts to run only if and when you file your tax return.
24. As a rule, your tax return cannot be audited after three years from its original filing date (with a few exceptions).
25. The Market Segment Specialization Program (MSSP) focuses on specific industries or groups of taxpayers believed to be in significant noncompliance with the tax law.
26. The first step in dealing with an automated IRS adjustment notice is to go to court.
27. Do not bring anything to an audit not directly related to the year being audited.
28. As a rule during an audit, you can't hurt yourself when your mouth is shut. Don't say more than is required.
29. Extension agreements should be limited to only specific items and should be no longer than six months.
30. If an audit is not going well, you should demand a recess to consult a tax professional.
Read 'Chapter 4: Appealing Your Audit Within the IRS' & answer the following question(s):
31. Pros for appealing a tax audit include:
32. When appealing an audit, it's impossible for an appeals officer to raise issues the auditor missed.
33. Penalties and interest do not continue to run during the appeals process.
34. The time limit for an appeal is within 30 days from the date you received the appeal notice letter.
35. The IRS is not legally required to let you have an administrative appeal after an audit.
36. The Freedom of Information Act entitles you to get copies of an IRS auditor's notes and workpapers showing how the auditor arrived at conclusions.
37. The original auditor generally plays no part in the appeals process other than the fact that their audit file is before the Appeals Officer.
38. Appeals Officers are given discretion in dealing with taxpayers that auditors do not have.
39. Appeals Officers often settle cases because they don't want the courts to set any precedents unfavorable to the IRS.
40. An Appeals Officer is likely to settle with you to:
41. Your first request in a settlement negotiation should be for the IRS to drop any penalties.
42. Appeals often reduce liabilities, but seldom are auditors totally reversed.
43. It's wise to negotiate tax issues, not tax dollars, in an appeal.
44. If you don't appeal, you lose the option of going to tax court.
Read 'Chapter 5: Going to Tax Court: No Lawyer Necessary' & answer the following question(s):
45. Well over 90% of all cases settle before the trial.
46. The chances of getting a tax bill reduced in Tax Court or a settlement before trial is 50-50.
47. When a taxpayer sues the IRS in court, the burden of proof with regard to factual issues is on the IRS.
48. Only 5% of taxpayers win outright and eliminate the tax bill.
49. Small cases under $50,000 heard in Tax Court are final and cannot be appealed.
50. Prepare for a small case in Tax Court as you would for an appeals hearing.
Read 'Chapter 6: When You Owe the IRS: Keeping the Tax Collector at Bay' & answer the following question(s):
51. Ninety days is the maximum time period that can be entered into the IRS computer to suspend the collection notice cycle.
52. At last report, the amount of income taxes owed but uncollected exceeded $200 billion.
53. There is a formal process for submitting an Offer in Compromise (OIC)?
54. Generally the statute of limitations on the collection of a tax debt is 7 years.
55. Collection of a tax bill can be delayed by:
56. Whenever you pay the IRS, the agency records your bank account number in its computer.
57. An IRS Revenue Officer may try to collect a tax debt by:
58. The advantages of an Offer in Compromise include:
59. According to the IRS, the five common errors taxpayers make when submitting an Offer in Compromise includes:
60. The moment you file for bankruptcy, the automatic stay stops all creditors and bill collectors, including the IRS.
Read 'Chapter 7: IRS Enforced Collection: Liens and Levies' & answer the following question(s):
61. No money is taken by the filing of a tax lien.
62. Although the IRS usually records a tax lien before levying on property, it does not have to.
63. You may neutralize a recorded federal tax lien by:
64. Legally, the IRS must notify you in writing and give you a chance to pay or prevent the lien being recorded before sending notice to the public records offices.
65. You do not have to voluntarily move out of your home after the IRS has sold it.
66. It is illegal to actively conceal assets from the IRS.
67. Assets exempt from IRS seizure include:
68. IRS policies discourage the seizure of retirement accounts and residences.
69. Once a levy on your income takes effect, it remains as long as:
70. You can stop or minimize a wage levy by:
71. You may be able to avoid an IRS levy by:
Read 'Chapter 8: The Taxpayer Advocate: A Friend at the IRS' & answer the following question(s):
72. Taxpayer advocates have the power - mandated by Congress - to cut through the red tape and help you.
73. An IRS taxpayer advocate cannot help if:
74. According to the IRS, significant hardship is:
75. Form 911 is used to request a taxpayer assistance order.
Read 'Chapter 9: Family, Friends, Heirs and the IRS' & answer the following question(s):
76. The only qualification for filing jointly is that:
77. The innocent spouse rule is strictly applied.
78. The IRS cannot deny innocent spouse relief even if it concludes that the spouse had actual knowledge of the understatement and still voluntarily singed the return.
79. Alimony is tax deductible to the payer and taxable income to the recipient.
80. An informal oral agreement constitutes alimony that is deductible to the payer and taxable to the recipient.
81. The IRS is not bound by joint liability agreements specified in marital settlements.
82. The deductibility of child support payments is similar to that of alimony.
83. Past taxes can be collected from an estate or from heirs who inherit the property of an estate.
84. With regard to estate taxes, the IRS can seize money or property from the heirs and executors if the tax isn't paid, for up to ten years after the tax is determined.
85. The parent with the children the most days always gets the exemption.
86. Attaching copies of appraisals and other documents supporting valuations to the estate tax return may reduce your chances of audit.
Read 'Chapter 10: Fraud and Tax Crimes: Do You Really Have to Worry?' & answer the following question(s):
87. Fraud is defined as a willful act done with the intent to defraud the IRS.
88. Tax fraud comes with a 75% civil penalty.
89. Tax evasion is defined as intentional conduct to defeat the income tax laws.
Read 'Chapter 11: Small Businesses / Self-Employed: When IRS Trouble Comes' & answer the following question(s):
90. A worker is generally considered an employee if you establish set hours of work.
91. Food and laundry drivers are automatically considered employees.
92. The Trust Fund Recovery Penalty is 100% of taxes owed.
Read 'Chapter 12: Penalties and Interest' & answer the following question(s):
93. If you file late, but don't owe any taxes, you are still charged a late filing of return penalty.
94. If the interest on a tax bill is for a business related tax debt, designating a payment to interest might give you a deductible business expense on this year's tax return.
Read 'Chapter 13: Help Beyond the Book: Tax Professionals and Tax Information' & answer the following question(s):
95. An EA is licensed to practice before the IRS
96. IRS auditors and collectors prefer dealing with experienced tax professionals.
97. Unclefed.com features many tax links and articles.
Read 'Chapter 14: When You Owe State Income Taxes' & answer the following question(s):
98. State statutes of limitation vary from one to five years.
99. Many states will consider settling a tax bill for less than what is owed.
Read 'Chapter 15: The Taxpayers' Bill of Rights' & answer the following question(s):
100. You can't legally videotape or record telephone conversations with the IRS.
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