Module 2 Final Exam - Part I
Started on Wednesday, October 6, 2021, 9:41 AM
State Finished
Completed on Wednesday, October 6, 2021, 1:58 PM
Time taken 4 hours 17 mins
Points 65.00/74.00
Grade 8.78 out of 10.00 (88%)
Feedback Congratulations!
Question 1 Don is a single parent. His son is 19 (not a student), and his daughter is 17 (still a
Correct student). Don claimed EIC on his tax return for both children. He later received a
letter from the Internal Revenue Service which disallowed EIC for his son. The letter
1.00 points
also stated that Don’s claim was an error due to reckless or intentional disregard of the
out of 1.00
EIC rules. For how many years will Don be denied EIC?
Select one:
a. 2 years Correct. Don did not commit fraud in claiming his son for purposes
of EIC; therefore, he will not be denied the ability to claim the EIC for 10 years.
However, since the IRS determined Don was reckless or intentionally disregarded
the EIC rules, he will be prohibited from claiming EIC for the next two years.
b. 5 years
c. 1 year
d. 10 years
Question 2 Last year Rick fraudulently claimed his cousin’s children as dependents on his return to
Correct receive earned income credit. The IRS discovered this when Rick’s cousin also claimed
the children. Rick’s cousin was able to prove he had the right to claim his children, and
1.00 points
the EIC was denied on Rick’s return. How long will EIC be prohibited if a taxpayer is
out of 1.00
denied EIC due to fraud?
Select one:
a. 5 years
b. 10 years Correct. If the IRS determines that the taxpayer claimed the EIC
fraudulently, then he will be prohibited from claiming the credit for the next 10
years.
c. 2 years
d. 1 year
, Module 2 Final Exam - Part I
Walt was
Question 3 a tax preparer who neglected to complete Form 8867 or record information needed for the return Ric
the IRS proved Rick had committed fraud, it was shown that Walt failed to exercise due diligence. What penalty
Correct
1.00 points out of 1.00
Select one:
$540 per year
$540 per failure to complyCorrect. The penalty amount is $540 per failure to comply.
$540 per taxpayer and per return
$540 per return
In which
Question 4 of the following scenarios does the taxpayer fail to meet the residency test for EIC purposes?
Correct
1.00 points out of 1.00
Select one:
A taxpayer who is 64 years old and lived in the United States for more than half of the year
A taxpayer whose child lived with him all year. He and his spouse separated on May 29.
A taxpayer whose child lived with him for 5 months and 28 daysCorrect. To meet the residency test, the child
A taxpayer whose eligible foster child lived with him all year
Trudy lives
Question 5 with her two children (ages 16 and 12), and her filing status is Head of Household. Trudy’s earned in
Correct
1.00 points out of 1.00
Select one:
No, the taxpayer is not eligible due to her filing status.
No, the taxpayer’s earned income is not within the range to receive EIC.
No, the taxpayer’s children do not meet the age test to be a qualifying child.
YesCorrect. According to the chart for Earned Income Credit Rules, with her two children, Trudy’s income is with
, Module 2 Final Exam - Part I
Jill prepares
Question 6 returns for many clients who can claim the earned income credit. To be certain she is practicing du
Correct
1.00 points out of 1.00
Select one:
Form 1040
Form W-5
Form 8862
Form 8867Correct. The preparer must complete and include Form 8867, Paid Preparer’s Due Diligence Checklis
Danika
Question is
7 a single mother with three children, ages 3, 7, and 9. They all have a valid Social Security number. Dan
earned
Correct income of $32,700 and interest income of $65. She meets the requirements for filing status Head of Hous
1.00 points out of 1.00
Select one:
Danika’s EIC will be the smaller of the two EIC amounts based on her AGI or her earned income.Correct. The
Danika’s EIC will be based on her AGI without considering the earned income amount.
Danika’s EIC will be based on her earned income alone without considering her AGI.
Danika is not eligible to receive EIC.
Lucy had
Question 8 the following income in tax year 2020: Wages $25,900, interest income of
$1,300
Correct and strike benefits paid by the union of $1,700. For purposes of EIC, how much is considered earned inco
1.00 points out of 1.00
Select one:
a. $27,200
b. $27,600Correct. Wages plus strike benefits are earned income for purposes of the EIC.
c. $30,200
d. $25,900
Started on Wednesday, October 6, 2021, 9:41 AM
State Finished
Completed on Wednesday, October 6, 2021, 1:58 PM
Time taken 4 hours 17 mins
Points 65.00/74.00
Grade 8.78 out of 10.00 (88%)
Feedback Congratulations!
Question 1 Don is a single parent. His son is 19 (not a student), and his daughter is 17 (still a
Correct student). Don claimed EIC on his tax return for both children. He later received a
letter from the Internal Revenue Service which disallowed EIC for his son. The letter
1.00 points
also stated that Don’s claim was an error due to reckless or intentional disregard of the
out of 1.00
EIC rules. For how many years will Don be denied EIC?
Select one:
a. 2 years Correct. Don did not commit fraud in claiming his son for purposes
of EIC; therefore, he will not be denied the ability to claim the EIC for 10 years.
However, since the IRS determined Don was reckless or intentionally disregarded
the EIC rules, he will be prohibited from claiming EIC for the next two years.
b. 5 years
c. 1 year
d. 10 years
Question 2 Last year Rick fraudulently claimed his cousin’s children as dependents on his return to
Correct receive earned income credit. The IRS discovered this when Rick’s cousin also claimed
the children. Rick’s cousin was able to prove he had the right to claim his children, and
1.00 points
the EIC was denied on Rick’s return. How long will EIC be prohibited if a taxpayer is
out of 1.00
denied EIC due to fraud?
Select one:
a. 5 years
b. 10 years Correct. If the IRS determines that the taxpayer claimed the EIC
fraudulently, then he will be prohibited from claiming the credit for the next 10
years.
c. 2 years
d. 1 year
, Module 2 Final Exam - Part I
Walt was
Question 3 a tax preparer who neglected to complete Form 8867 or record information needed for the return Ric
the IRS proved Rick had committed fraud, it was shown that Walt failed to exercise due diligence. What penalty
Correct
1.00 points out of 1.00
Select one:
$540 per year
$540 per failure to complyCorrect. The penalty amount is $540 per failure to comply.
$540 per taxpayer and per return
$540 per return
In which
Question 4 of the following scenarios does the taxpayer fail to meet the residency test for EIC purposes?
Correct
1.00 points out of 1.00
Select one:
A taxpayer who is 64 years old and lived in the United States for more than half of the year
A taxpayer whose child lived with him all year. He and his spouse separated on May 29.
A taxpayer whose child lived with him for 5 months and 28 daysCorrect. To meet the residency test, the child
A taxpayer whose eligible foster child lived with him all year
Trudy lives
Question 5 with her two children (ages 16 and 12), and her filing status is Head of Household. Trudy’s earned in
Correct
1.00 points out of 1.00
Select one:
No, the taxpayer is not eligible due to her filing status.
No, the taxpayer’s earned income is not within the range to receive EIC.
No, the taxpayer’s children do not meet the age test to be a qualifying child.
YesCorrect. According to the chart for Earned Income Credit Rules, with her two children, Trudy’s income is with
, Module 2 Final Exam - Part I
Jill prepares
Question 6 returns for many clients who can claim the earned income credit. To be certain she is practicing du
Correct
1.00 points out of 1.00
Select one:
Form 1040
Form W-5
Form 8862
Form 8867Correct. The preparer must complete and include Form 8867, Paid Preparer’s Due Diligence Checklis
Danika
Question is
7 a single mother with three children, ages 3, 7, and 9. They all have a valid Social Security number. Dan
earned
Correct income of $32,700 and interest income of $65. She meets the requirements for filing status Head of Hous
1.00 points out of 1.00
Select one:
Danika’s EIC will be the smaller of the two EIC amounts based on her AGI or her earned income.Correct. The
Danika’s EIC will be based on her AGI without considering the earned income amount.
Danika’s EIC will be based on her earned income alone without considering her AGI.
Danika is not eligible to receive EIC.
Lucy had
Question 8 the following income in tax year 2020: Wages $25,900, interest income of
$1,300
Correct and strike benefits paid by the union of $1,700. For purposes of EIC, how much is considered earned inco
1.00 points out of 1.00
Select one:
a. $27,200
b. $27,600Correct. Wages plus strike benefits are earned income for purposes of the EIC.
c. $30,200
d. $25,900
