H&R Block Income Tax Course Question and
Answer | Latest Update Complete Exam Prep
with Accurate Solutions | Grade A+
• Disclosure . Answer: The release of tax information by an IRS employee.
• Due Diligence . Answer: Requirements that tax professionals must follow when
preparing income tax returns.
• Noncompliance . Answer: Failure or refusal to comply with the tax code.
• Privilege . Answer: Protection from being required to disclose confidential
communications between two parties, such as attorney and client.
• Estimated Tax . Answer: The amount of tax a taxpayer expects to owe for the
year after subtracting expected amounts withheld and certain refundable credits.
• Estimated Tax Voucher . Answer: A statement by an individual of (1) the amount
of income tax he estimates he will incur during the current taxable year on income
that is not subject to withholding, (2) the excess amount over that withheld on
income which is subject to withholding, and (3) his estimated self-employment tax.
• Exemption from Withholding . Answer: Status claimed on Form W-4 directing
the employer not to withhold federal income taxes from the employee.
• Underpayment Penalty . Answer: If a taxpayer did not pay enough tax on a timely
basis during the year, he may be required to pay an underpayment penalty.
,• Withholding Allowances . Answer: An increase by which income tax
withholding on certain income is reduced.
• Two Ways to Pay as You Go . Answer: Withholding and Estimated Tax
Payments
• Form W-4 . Answer: Employee's Withholding Allowance Certificate
• Form 8815 . Answer: Exclusion of Interest From Series EE and I U.S. Savings
Bonds Issued After 1989
• Form 2210 . Answer: Underpayment of Estimated Tax by Individuals, Estates,
and Trusts
• Form 4868 . Answer: Application for Automatic Extension of Time To File U.S.
Individual Income Tax Return
• Form 8888 . Answer: Allocation of Refund
• Form 9465 . Answer: Installment Agreement Request
• Amended Return . Answer: A tax return filed on Form 1040X after the original
return has been filed.
• Closed Year . Answer: A tax year for which the statute of limitations has expired.
• Open Year . Answer: A taxable year for which the statute of limitations has not
yet expired.
,• Failure-to-File Penalty . Answer: Generally 5% for each month or part of a month
the return is late, but not more than 25% of the tax not paid.
• Failure to File . Answer: Taxpayer fails to file the return by the due date, and
there is a balance due.
• Failure to Pay . Answer: Taxpayer fails to pay the tax owed by the due date.
• Failure-to-Pay Penalty . Answer: 0.5% of the unpaid taxes for each month or part
of a month after the due date, but not more than 25%.
• Negligence or Intentional Disregard . Answer: Taxpayer shows negligence or
disregard of the rules or regulations causing an underpayment.
• Negligence-or-Intentional-Disregard Penalty . Answer: 20% of the
underpayment.
• Substantial Understatment . Answer: Taxpayer understates their tax by the larger
of $5,000 or 10% of the correct tax.
• Substantial-Understatement Penalty . Answer: 20% of the underpayment.
• Form 1040X . Answer: Amended U.S. Individual Income Tax Return
• When can an amended return be filed? . Answer: Within three years of the date
the original return was filed, or within two years of the date the tax was paid,
whichever is later.
, • Can the 1040X be e-filed? . Answer: No.
• Household Employee . Answer: An individual who performs nonbusiness
services in a taxpayer's home.
• Active Income and Losses . Answer: Those for which a taxpayer performs
services.
• Partnership . Answer: A form of business in which two or more persons join their
money and skills in conducting the business as co-owners.
• Passive Income and Losses . Answer: Those from business activities in which the
taxpayer does not materially participate, and all rental activities.
• Portfolio Income and Losses . Answer: Those from such sources as dividends,
interest, capital gains and losses, and royalties.
• Rental Income . Answer: Income received by the taxpayer for allowing another
person's use of the taxpayer's property.
• Royalty . Answer: (1) A payment received for the right to exploit a taxpayer's
ownership of natural resources or a taxpayer's literary, musical, or artistic creation.
(2) An interest in the oil and gas in place that entitles the holder to a specified
fraction, in kind or in value, of the total production from the property, free of any
expenses of development and operation.
• S Corporation . Answer: A qualified small business corporation that has elected
special tax treatment under subchapter S of the Internal Revenue Code. S
Answer | Latest Update Complete Exam Prep
with Accurate Solutions | Grade A+
• Disclosure . Answer: The release of tax information by an IRS employee.
• Due Diligence . Answer: Requirements that tax professionals must follow when
preparing income tax returns.
• Noncompliance . Answer: Failure or refusal to comply with the tax code.
• Privilege . Answer: Protection from being required to disclose confidential
communications between two parties, such as attorney and client.
• Estimated Tax . Answer: The amount of tax a taxpayer expects to owe for the
year after subtracting expected amounts withheld and certain refundable credits.
• Estimated Tax Voucher . Answer: A statement by an individual of (1) the amount
of income tax he estimates he will incur during the current taxable year on income
that is not subject to withholding, (2) the excess amount over that withheld on
income which is subject to withholding, and (3) his estimated self-employment tax.
• Exemption from Withholding . Answer: Status claimed on Form W-4 directing
the employer not to withhold federal income taxes from the employee.
• Underpayment Penalty . Answer: If a taxpayer did not pay enough tax on a timely
basis during the year, he may be required to pay an underpayment penalty.
,• Withholding Allowances . Answer: An increase by which income tax
withholding on certain income is reduced.
• Two Ways to Pay as You Go . Answer: Withholding and Estimated Tax
Payments
• Form W-4 . Answer: Employee's Withholding Allowance Certificate
• Form 8815 . Answer: Exclusion of Interest From Series EE and I U.S. Savings
Bonds Issued After 1989
• Form 2210 . Answer: Underpayment of Estimated Tax by Individuals, Estates,
and Trusts
• Form 4868 . Answer: Application for Automatic Extension of Time To File U.S.
Individual Income Tax Return
• Form 8888 . Answer: Allocation of Refund
• Form 9465 . Answer: Installment Agreement Request
• Amended Return . Answer: A tax return filed on Form 1040X after the original
return has been filed.
• Closed Year . Answer: A tax year for which the statute of limitations has expired.
• Open Year . Answer: A taxable year for which the statute of limitations has not
yet expired.
,• Failure-to-File Penalty . Answer: Generally 5% for each month or part of a month
the return is late, but not more than 25% of the tax not paid.
• Failure to File . Answer: Taxpayer fails to file the return by the due date, and
there is a balance due.
• Failure to Pay . Answer: Taxpayer fails to pay the tax owed by the due date.
• Failure-to-Pay Penalty . Answer: 0.5% of the unpaid taxes for each month or part
of a month after the due date, but not more than 25%.
• Negligence or Intentional Disregard . Answer: Taxpayer shows negligence or
disregard of the rules or regulations causing an underpayment.
• Negligence-or-Intentional-Disregard Penalty . Answer: 20% of the
underpayment.
• Substantial Understatment . Answer: Taxpayer understates their tax by the larger
of $5,000 or 10% of the correct tax.
• Substantial-Understatement Penalty . Answer: 20% of the underpayment.
• Form 1040X . Answer: Amended U.S. Individual Income Tax Return
• When can an amended return be filed? . Answer: Within three years of the date
the original return was filed, or within two years of the date the tax was paid,
whichever is later.
, • Can the 1040X be e-filed? . Answer: No.
• Household Employee . Answer: An individual who performs nonbusiness
services in a taxpayer's home.
• Active Income and Losses . Answer: Those for which a taxpayer performs
services.
• Partnership . Answer: A form of business in which two or more persons join their
money and skills in conducting the business as co-owners.
• Passive Income and Losses . Answer: Those from business activities in which the
taxpayer does not materially participate, and all rental activities.
• Portfolio Income and Losses . Answer: Those from such sources as dividends,
interest, capital gains and losses, and royalties.
• Rental Income . Answer: Income received by the taxpayer for allowing another
person's use of the taxpayer's property.
• Royalty . Answer: (1) A payment received for the right to exploit a taxpayer's
ownership of natural resources or a taxpayer's literary, musical, or artistic creation.
(2) An interest in the oil and gas in place that entitles the holder to a specified
fraction, in kind or in value, of the total production from the property, free of any
expenses of development and operation.
• S Corporation . Answer: A qualified small business corporation that has elected
special tax treatment under subchapter S of the Internal Revenue Code. S
