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Exam 26: Tax Practice and Ethics

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Question 41

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Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Failure to pay a tax.

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Question 42

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The Statements on Standards for Tax Services are issued by the:

A) IRS.
B) AICPA.
C) ABA.
D) SEC.

E) B) and D)
F) B) and C)

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Question 43

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With respect to the Small Cases Division of the Tax Court,

A registered tax return preparer who is not also a CPA,attorney,or Enrolled Agent:

The tax professional can do more than just tax compliance work.He or she can work with the client in consultation over the strategy and tactics of dealing with a Federal tax audit.

The Commissioner of the IRS is appointed by the:

The IRS can waive the penalty for a substantial understatement of a tax liability if the taxpayer shows ____________________ for the position taken on the tax return.

In a letter ruling,the IRS responds to a taxpayer request concerning the tax treatment of a proposed transaction.

CPA Shearer is required by AICPA tax ethics rules to inform her client Martinez of significant changes in the Federal income tax laws.

An individual is not subject to an underpayment penalty until more than $____________________ is due and unpaid through estimated taxes.

The Treasury document regulating the professional conduct of tax return preparers is the Regulation known as _________________________.

A negligence penalty is assessed when the taxpayer is found to have not made a reasonable attempt to comply with the tax law.

If the taxpayer shows ____________________ for an underpayment of tax,the failure to pay penalty can be reduced or eliminated.

Which statement is incorrect as to the conduct of IRS income tax audits?

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Improper refund claim.

Jenny prepared Steve's income tax returns for no compensation for 2013 and 2014.Jenny is Steve's mother.In 2016,the IRS notifies Steve that it will audit his returns for 2013 and 2014.Jenny cannot represent Steve during the audit of the returns,as she is not a "registered tax return preparer."

After a tax audit,the taxpayer receives the Revenue Agent's Report as part of the "30-day letter."

A CPA can take a tax return position for a client that is contrary to current IRS interpretations of the law.

According to the IRS,the annual "Tax Gap" totals about $______________________ billion.

Which of the following statements correctly reflects the rules governing interest to be paid on an individual's Federal tax deficiency or claim for refund?