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

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Question 1

Multiple Choice

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Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

A) judicial hierarchy
B) the Goldman rule
C) judicial consistency
D) stare decisis
E) None of these

F) C) and D)
G) A) and B)

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Question 2

Multiple Choice

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Which of the following audits is the most common and typically less comprehensive?

A) Correspondence.
B) Random.
C) Office.
D) Field.
E) None of these.

F) A) and B)
G) C) and D)

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Question 3

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Carey was researching a tax issue and located what appears to be a favorable IRS regulation. He knows that regulations serve different purposes and are issued in different forms. Which purpose and which form of regulation would provide Carey the most confidence that he has found an authority that carries a lot of weight for the long term? How could Carey check the status of this regulation?

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to the proposed IRS adjustment.

Andy filed a fraudulent 2014 tax return on May 1, 2015. The statute of limitations for IRS assessment on Andy's 2014 tax return should end:

For the following taxpayers indicate whether the taxpayer should file a tax return and why. a. Robert earned $50,000 this year as a staff accountant. His estimated tax liability is $4,500, and he expects to receive a $500 tax refund. b. Amy earned $4,000 this year working part-time. She will have no federal tax liability and has not made any federal tax payments. c. Ty earned $2,500 this summer and had $200 of federal taxes withheld from his paycheck. He will have no federal tax liability this year. d. Startup Corporation had a $50,000 loss this year. e. The Walker Family Trust earned $500 of income this year.

If a taxpayer has little cash and a very technical tax case that she feels very strongly that the tax rules are "on her side," she should prefer to have her case tried in the U.S. Tax Court.

For the 2014 tax returns, indicate when the statute of limitation expires and why. a. Phoenix filed his tax return on February 28, 2015. b. Jill and Randy filed their tax return on August 16, 2015. c. Although required to file, Catherine chose not to file a tax return this year because she was expecting a tax refund and could not pull together all the information needed to file the return. d. Jerry filed his tax return on May 22, 2015 but has accidentally underreported his taxable income by 30%.

For the 2014 tax returns, indicate when the statute of limitation expires and why. a. Simon filed his tax return on April 10, 2015. b. Billy and Barbara filed their tax returns late on December 1, 2015. c. Pearson earns a living through various illegal activities. He filed his tax return on March 14, 2015 but did not report his illegal income on his tax return. d. Luther filed his tax return on July 17, 2015 but has accidentally underreported his taxable gross income by 20%.

Rowanda could not settle with the IRS at the appeals conference. If she wants to litigate the issue but does not have sufficient funds to pay the proposed tax deficiency, Rowanda should litigate in the:

If a taxpayer is unable to file a tax return by its original due date, the taxpayer can request an automatic 9-month extension to file the return.

Which of the following is not considered a secondary authority?

Which of the following is a false statement? A taxpayer filing a fraudulent tax return:

The Internal Revenue Code of 1986 is the name of the current tax code.

Bill filed his 2014 tax return on March 15th, 2015. The statute of limitations for IRS assessment on Bill's 2014 tax return should end:

Lavonda discovered that the U.S. Circuit Court of Appeals for the Federal Circuit 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:

Which of the following has the highest authoritative weight?

Which of the following types of tax services are arranged by code section?

The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing status.

Ramon's tax return was randomly selected for audit. Which IRS program likely selected Ramon's return for audit?