INTUIT ACADEMY TAX LEVEL 1 REVIEW
SHEET TESTED QUESTIONS AND ACCURATE
ANSWERS UPDATED
⩥ A tax preparer discovers an omission in a client's prior-year return
related to a tax credit. What should the preparer do?
Answer: Promptly inform the client of the omission and its potential
impact.
⩥ Which of the following items would "carryforward" on a taxpayer's
return, requiring a preparer to see the prior-year return?
Answer: Suspended passive losses
⩥ Which of the following situations might require a preparer to review a
taxpayer's previous year's tax return?
Answer: The taxpayer owns a rental property with prior-year
depreciation.
⩥ Layla is self-employed and expects to owe $2,500 of taxes for 2023.
Her tax liability for the prior tax year was zero because her Schedule C
business had a loss in the prior year. Which of the following statements
is correct?
Answer: Layla is not required to pay estimated taxes.
,⩥ Why is reviewing prior-year tax returns important for tax
professionals?
Answer: It helps them identify potential errors and omissions.
⩥ Why is collecting accurate biographical data from a client so
important for tax preparation?
Answer: Accurate client information helps prevent errors on tax returns.
⩥ The issuance of an ITIN does not:
Answer: A. Give the individual the right to work in the United States.
B. Create a presumption regarding the individual's immigration status.
C. Entitle the recipient to Social Security benefits or the Earned Income
Tax Credit.
D. All of the above.<---
⩥ The IRS has created a system of IP PINs as a step toward combating:
Answer: Identity theft.
⩥ What consequences could a tax preparer face if they wrongfully
disclose a taxpayer's personal biometric information?
Answer: Civil and criminal charges.correct
,⩥ To prepare an accurate tax return, a tax preparer needs all of the
following information about a client except:
Answer: Prior-year AGI
⩥ What is an ATIN, and who needs to request one?
Answer: An ATIN is a temporary taxpayer identification number for a
child in a domestic adoption where the parents are unable to obtain the
child's Social Security Number (SSN).
⩥ Jamila is a nonresident alien that owns a rental property in the US that
she inherited from her brother, who was a green-card holder. Jamila
must file a U.S. tax return, but she is not eligible for a Social Security
Number. What must she do?
Answer: She must fill out a W-7 application form for an ITIN, and
submit it to the IRS along with a completed tax return.
⩥ What is IRS Form W-7 used for?
Answer: It is used to apply for an ITIN.
⩥ Penny was the victim of identity theft last year. She received an IP
PIN from the IRS this year. She plans to use a paid preparer to file her
return. How should the IP PIN be used?
Answer: The preparer should enter Penny's IP PIN on the tax return next
to her signature block.
, ⩥ A month after Franco' filed his 2023 tax return, he received another
Form W-2 in the mail. The amount on the additional Form W-2 was not
included in his original tax return, because he'd forgotten about it. What
is Franco's best course of action?
Answer: Prepare Form 1040X to amend his tax return for the year and
include the additional Form W-2.
⩥ Bernie e-filed his 2023 tax return on April 15, 2024. Two weeks later,
he received another Form W-2 in the mail that he had forgotten about.
What should Bernie do?
Answer: Bernie should prepare Form 1040-X to include the additional
Form W-2.
⩥ A taxpayer who files Form 4868 is requesting:
Answer: An extension of time to file an individual tax return.
⩥ Emilio's 2020 tax return was due April 15, 2021. He filed it early, on
January 23, 2021. Later, he finds an error on the return, and wants to
amend it, expecting the correction to result in a refund. If he gets it
postmarked on or before _____________ he will receive a refund from
the IRS.
Answer: April 15, 2024
⩥ Which of the following statements is correct about individual
extensions?
SHEET TESTED QUESTIONS AND ACCURATE
ANSWERS UPDATED
⩥ A tax preparer discovers an omission in a client's prior-year return
related to a tax credit. What should the preparer do?
Answer: Promptly inform the client of the omission and its potential
impact.
⩥ Which of the following items would "carryforward" on a taxpayer's
return, requiring a preparer to see the prior-year return?
Answer: Suspended passive losses
⩥ Which of the following situations might require a preparer to review a
taxpayer's previous year's tax return?
Answer: The taxpayer owns a rental property with prior-year
depreciation.
⩥ Layla is self-employed and expects to owe $2,500 of taxes for 2023.
Her tax liability for the prior tax year was zero because her Schedule C
business had a loss in the prior year. Which of the following statements
is correct?
Answer: Layla is not required to pay estimated taxes.
,⩥ Why is reviewing prior-year tax returns important for tax
professionals?
Answer: It helps them identify potential errors and omissions.
⩥ Why is collecting accurate biographical data from a client so
important for tax preparation?
Answer: Accurate client information helps prevent errors on tax returns.
⩥ The issuance of an ITIN does not:
Answer: A. Give the individual the right to work in the United States.
B. Create a presumption regarding the individual's immigration status.
C. Entitle the recipient to Social Security benefits or the Earned Income
Tax Credit.
D. All of the above.<---
⩥ The IRS has created a system of IP PINs as a step toward combating:
Answer: Identity theft.
⩥ What consequences could a tax preparer face if they wrongfully
disclose a taxpayer's personal biometric information?
Answer: Civil and criminal charges.correct
,⩥ To prepare an accurate tax return, a tax preparer needs all of the
following information about a client except:
Answer: Prior-year AGI
⩥ What is an ATIN, and who needs to request one?
Answer: An ATIN is a temporary taxpayer identification number for a
child in a domestic adoption where the parents are unable to obtain the
child's Social Security Number (SSN).
⩥ Jamila is a nonresident alien that owns a rental property in the US that
she inherited from her brother, who was a green-card holder. Jamila
must file a U.S. tax return, but she is not eligible for a Social Security
Number. What must she do?
Answer: She must fill out a W-7 application form for an ITIN, and
submit it to the IRS along with a completed tax return.
⩥ What is IRS Form W-7 used for?
Answer: It is used to apply for an ITIN.
⩥ Penny was the victim of identity theft last year. She received an IP
PIN from the IRS this year. She plans to use a paid preparer to file her
return. How should the IP PIN be used?
Answer: The preparer should enter Penny's IP PIN on the tax return next
to her signature block.
, ⩥ A month after Franco' filed his 2023 tax return, he received another
Form W-2 in the mail. The amount on the additional Form W-2 was not
included in his original tax return, because he'd forgotten about it. What
is Franco's best course of action?
Answer: Prepare Form 1040X to amend his tax return for the year and
include the additional Form W-2.
⩥ Bernie e-filed his 2023 tax return on April 15, 2024. Two weeks later,
he received another Form W-2 in the mail that he had forgotten about.
What should Bernie do?
Answer: Bernie should prepare Form 1040-X to include the additional
Form W-2.
⩥ A taxpayer who files Form 4868 is requesting:
Answer: An extension of time to file an individual tax return.
⩥ Emilio's 2020 tax return was due April 15, 2021. He filed it early, on
January 23, 2021. Later, he finds an error on the return, and wants to
amend it, expecting the correction to result in a refund. If he gets it
postmarked on or before _____________ he will receive a refund from
the IRS.
Answer: April 15, 2024
⩥ Which of the following statements is correct about individual
extensions?
