DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th
Edition Spilker
Chapter 02
Tax Compliance, the IRS, and Tax Authorities
True / False Questions
1. Corporations are required to file a tax return annually regardless of their taxable income.
True False
2. The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing
status.
True False
3. If a taxpayer is due a refund, she does not have to file a tax return.
True False
4. If April 15th falls on a Saturday, the due date for individual tax returns will be on Monday, April
17th.
True False
5. If an individual 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.
True False
6. An extension to file a tax return does not extend the due date for tax payments.
True False
2-1
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7. The statute of limitations for IRS assessment generally ends four years after the date a tax return 14. The "90-day" letter gives the taxpayer the opportunity to pay a proposed IRS tax adjustment or
is filed. file a petition in the U.S. District Court to contest the adjustment and hear the case.
True False True False
8. For fraudulent tax returns, the statute of limitations for IRS assessment is ten years. 15. 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.
True False
True False
9. The IRS DIF system checks each tax return for mathematical mistakes and errors.
16. In researching a tax issue, Eric finds that the U.S. Circuit Court of Appeals for the Federal Circuit
True False previously has ruled in favor of his tax position, whereas the 11th Circuit (Eric's circuit) previously
has ruled against his tax position. If Eric is contemplating litigating his tax position with the IRS,
10. Joel reported a high amount of charitable contributions as a deduction on his individual tax return he should prefer to have his case first tried by the U.S. Tax Court.
relative to taxpayers with similar income levels. The information matching program is the IRS
program most likely to identify Joel's tax return for audit. True False
True False 17. If a taxpayer loses a case at the Circuit Court level, he is granted an automatic appeal hearing
with the Supreme Court.
11. Office examinations are the most common type of IRS audit.
True False
True False
18. Secondary authorities are official sources of the tax law with a lesser "weight" than primary
12. The three basic types of IRS examinations are computer exams, office exams, and business authorities.
exams.
True False
True False
19. Revenue rulings and revenue procedures are examples of primary authorities.
13. The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree
to a proposed IRS adjustment on the taxpayer's income tax return. True False
True False 20. The Internal Revenue Code and tax treaties are examples of statutory authorities.
True False
2-2 2-3
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21. Because the U.S. District Court hears a broader set of cases, decisions by the U.S. District Court 29. Of the two basic types of tax services, beginning tax researchers often prefer topical tax
may be considered to have more authoritative weight than the U.S. Court of Federal Claims. services.
True False True False
22. Temporary Regulations have more authoritative weight than revenue rulings. 30. In researching a question of fact, the researcher should focus her efforts on identifying authorities
with fact patterns similar to her client's facts.
True False
True False
23. Proposed and Temporary Regulations have the same authoritative weight.
31. Under the Statement on Standards for Tax Services, a CPA may recommend a tax return position
True False if the position is frivolous and the position is not disclosed on the tax return.
24. An acquiescence indicates that the IRS lost a court case and that it has decided to follow the True False
court's ruling in the future.
32. In general, a CPA will satisfy his professional responsibilities under the Statement on Standards
True False for Tax Services when recommending a tax return position if he complies with the standards
imposed by the applicable tax authority.
25. The Internal Revenue Code of 1986 is the name of the current income tax code of the United
States of America. True False
True False 33. Under the tax law, taxpayers may be subject to both civil and criminal penalties for underpaying
their tax liability (e.g., due to fraud).
26. As required by the Constitution, all tax bills are supposed to originate in the House of
Representatives. True False
True False 34. A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her
tax return position.
27. The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S. Senate.
True False
True False
35. If the IRS assesses additional tax on a tax return upon audit, a taxpayer may be subject to
28. Closed facts are especially conducive to tax planning. interest and penalties on the underpayment.
True False True False
2-4 2-5
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39. Corporations are required to file a tax return only if their taxable income is greater than:
Multiple Choice Questions
A. $0.
36. Which of the following is not a factor that determines whether a taxpayer is required to file a tax
B. $1,000.
return?
C. $600.
D. $750.
A. Filing status. E. None of the above. Corporations are always required to file a tax return.
B. Taxpayer's gross income.
40. This year April 15th falls on a Saturday. Individual tax returns will be due on:
C. Taxpayer's employment.
D. Taxpayer's age.
E. None of the above. A. April 14th.
B. April 15th.
37. If Paula requests an extension to file her individual tax return, the latest she could file her return
C. April 16th.
without a failure-to-file penalty is:
D. April 17th.
E. None of the above.
A. September 15th.
41. Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his
B. October 15th.
salary. Assuming that Dominic will have zero tax liability this year, he:
C. August 15th.
D. November 15th.
E. None of the above. A. is required to file a tax return.
B. is not required to file a tax return but should file a return anyway.
38. If Lindley requests an extension to file her individual tax return, the latest she could pay her tax
C. is required to file a tax return but should not file because he owes no tax.
due without penalty is:
D. is not required to file a tax return and should not file a return.
E. None of the above.
A. April 15th.
B. October 15th.
C. August 15th.
D. November 15th.
E. None of the above.
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Edition Spilker
Chapter 02
Tax Compliance, the IRS, and Tax Authorities
True / False Questions
1. Corporations are required to file a tax return annually regardless of their taxable income.
True False
2. The tax return filing requirements for individual taxpayers only depend on the taxpayer's filing
status.
True False
3. If a taxpayer is due a refund, she does not have to file a tax return.
True False
4. If April 15th falls on a Saturday, the due date for individual tax returns will be on Monday, April
17th.
True False
5. If an individual 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.
True False
6. An extension to file a tax return does not extend the due date for tax payments.
True False
2-1
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
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,DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th
Edition Spilker Edition Spilker
7. The statute of limitations for IRS assessment generally ends four years after the date a tax return 14. The "90-day" letter gives the taxpayer the opportunity to pay a proposed IRS tax adjustment or
is filed. file a petition in the U.S. District Court to contest the adjustment and hear the case.
True False True False
8. For fraudulent tax returns, the statute of limitations for IRS assessment is ten years. 15. 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.
True False
True False
9. The IRS DIF system checks each tax return for mathematical mistakes and errors.
16. In researching a tax issue, Eric finds that the U.S. Circuit Court of Appeals for the Federal Circuit
True False previously has ruled in favor of his tax position, whereas the 11th Circuit (Eric's circuit) previously
has ruled against his tax position. If Eric is contemplating litigating his tax position with the IRS,
10. Joel reported a high amount of charitable contributions as a deduction on his individual tax return he should prefer to have his case first tried by the U.S. Tax Court.
relative to taxpayers with similar income levels. The information matching program is the IRS
program most likely to identify Joel's tax return for audit. True False
True False 17. If a taxpayer loses a case at the Circuit Court level, he is granted an automatic appeal hearing
with the Supreme Court.
11. Office examinations are the most common type of IRS audit.
True False
True False
18. Secondary authorities are official sources of the tax law with a lesser "weight" than primary
12. The three basic types of IRS examinations are computer exams, office exams, and business authorities.
exams.
True False
True False
19. Revenue rulings and revenue procedures are examples of primary authorities.
13. The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree
to a proposed IRS adjustment on the taxpayer's income tax return. True False
True False 20. The Internal Revenue Code and tax treaties are examples of statutory authorities.
True False
2-2 2-3
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education. McGraw-Hill Education.
mynursytest.store mynursytest.store
,DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th
Edition Spilker Edition Spilker
21. Because the U.S. District Court hears a broader set of cases, decisions by the U.S. District Court 29. Of the two basic types of tax services, beginning tax researchers often prefer topical tax
may be considered to have more authoritative weight than the U.S. Court of Federal Claims. services.
True False True False
22. Temporary Regulations have more authoritative weight than revenue rulings. 30. In researching a question of fact, the researcher should focus her efforts on identifying authorities
with fact patterns similar to her client's facts.
True False
True False
23. Proposed and Temporary Regulations have the same authoritative weight.
31. Under the Statement on Standards for Tax Services, a CPA may recommend a tax return position
True False if the position is frivolous and the position is not disclosed on the tax return.
24. An acquiescence indicates that the IRS lost a court case and that it has decided to follow the True False
court's ruling in the future.
32. In general, a CPA will satisfy his professional responsibilities under the Statement on Standards
True False for Tax Services when recommending a tax return position if he complies with the standards
imposed by the applicable tax authority.
25. The Internal Revenue Code of 1986 is the name of the current income tax code of the United
States of America. True False
True False 33. Under the tax law, taxpayers may be subject to both civil and criminal penalties for underpaying
their tax liability (e.g., due to fraud).
26. As required by the Constitution, all tax bills are supposed to originate in the House of
Representatives. True False
True False 34. A taxpayer can avoid an underpayment penalty if there is substantial authority that supports her
tax return position.
27. The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S. Senate.
True False
True False
35. If the IRS assesses additional tax on a tax return upon audit, a taxpayer may be subject to
28. Closed facts are especially conducive to tax planning. interest and penalties on the underpayment.
True False True False
2-4 2-5
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McGraw-Hill Education. McGraw-Hill Education.
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, DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th DOWNLOAD THE Test Bank for Essentials of Federal Taxation 2017 8th
Edition Spilker Edition Spilker
39. Corporations are required to file a tax return only if their taxable income is greater than:
Multiple Choice Questions
A. $0.
36. Which of the following is not a factor that determines whether a taxpayer is required to file a tax
B. $1,000.
return?
C. $600.
D. $750.
A. Filing status. E. None of the above. Corporations are always required to file a tax return.
B. Taxpayer's gross income.
40. This year April 15th falls on a Saturday. Individual tax returns will be due on:
C. Taxpayer's employment.
D. Taxpayer's age.
E. None of the above. A. April 14th.
B. April 15th.
37. If Paula requests an extension to file her individual tax return, the latest she could file her return
C. April 16th.
without a failure-to-file penalty is:
D. April 17th.
E. None of the above.
A. September 15th.
41. Dominic earned $1,500 this year, and his employer withheld $200 of federal income tax from his
B. October 15th.
salary. Assuming that Dominic will have zero tax liability this year, he:
C. August 15th.
D. November 15th.
E. None of the above. A. is required to file a tax return.
B. is not required to file a tax return but should file a return anyway.
38. If Lindley requests an extension to file her individual tax return, the latest she could pay her tax
C. is required to file a tax return but should not file because he owes no tax.
due without penalty is:
D. is not required to file a tax return and should not file a return.
E. None of the above.
A. April 15th.
B. October 15th.
C. August 15th.
D. November 15th.
E. None of the above.
2-6 2-7
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