Question 1

Mrs.Hepp completed her 2016 Form 1040 on April 13,2017.The return showed a $923 balance due.Mrs.Hepp needed more time to double check all her computations.What can Mrs.Hepp do to give herself more time?

Accepted Answer

Mrs. Hepp can file a request for an automatic extension of time to file her Form 1040 by April 15 and pay the estimated balance due with the extension request to avoid penalties.

Question 2

Mr.Fiocchi filed his unextended 2016 Form 1040 on July 22,2017,and had no reasonable cause for the delinquency.The return showed a $1,906 overpayment of tax (refund due).Compute Mr.Fiocchi's late-filing and late-payment penalty.

Accepted Answer

Since Mr. Fiocchi's return showed an overpayment of tax, there is no unpaid tax liability. Therefore, there are no late-filing or late-payment penalties applicable.

Question 3

Only one spouse must sign a jointly filed Form 1040.

Accepted Answer

Both spouses must sign a jointly filed Form 1040.

Question 4

A taxpayer who is disputing a deficiency of $50,000 or less may request an informal hearing by the Small Tax Case Division of the Tax Court.

Accepted Answer

This is true, according to IRS rules. Taxpayers can request an informal hearing with the Small Tax Case Division of the Tax Court if they are disputing a deficiency of $50,000 or less. This process is designed to be less formal and less expensive than a traditional court hearing.

Question 5

Only the government may appeal a tax case to the U.S.Supreme Court.

Accepted Answer

Both the taxpayer and the government have the right to appeal a tax case to the U.S. Supreme Court if the case involves significant legal issues.

Question 6

A taxpayer who wants a jury trial must pay the tax deficiency and then sue the government for a refund in U.S.District Court.

Accepted Answer

This is true. A taxpayer cannot request a jury trial in a tax court case, but can file a lawsuit for a refund in U.S. District Court and request a jury trial. However, they must first pay the tax deficiency assessed by the IRS before filing the lawsuit.

Question 7

If the IRS assesses additional tax against a corporation after it has liquidated,the shareholders can't be held liable for the tax due.

Accepted Answer

The answer of If the IRS assesses additional tax against...

Question 8

If a taxpayer has insufficient financial means to pay a deficiency,the IRS may make an offer in compromise to settle for a lesser amount.

Accepted Answer

This statement is true. The IRS may offer an offer in compromise if a taxpayer cannot afford to pay the full amount owed.

Question 9

Mr.and Mrs.Chung filed their unextended 2016 Form 1040 on May 30,2017,and had no reasonable cause for the delinquency.The return showed a $10,479 balance of tax due.Compute the Chungs' late-filing and late-payment penalty.

Accepted Answer

The answer of Mr.and Mrs.Chung filed their unextended 2016 Form...

Question 10

A professional tax return preparer must attach his or her signature and identifying number to each return prepared.

Accepted Answer

According to the IRS, a professional tax return preparer must sign and include their identifying number (usually a PTIN or Preparer Tax Identification Number) on each tax return they prepare for a client. This helps to ensure accountability and accuracy in tax preparation.

Question 11

Which of the following statements about taxpayer responsibility is false?

Accepted Answer

All of the statements are true, therefore none of them are false.

Question 12

Which of the following statements about federal tax return filing dates is false?

Accepted Answer

The answer of Which of the following statements about federal...

Question 13

A person can't be relieved of liability for a tax deficiency under the innocent spouse rule unless that person was forced to sign the tax return under duress.

Accepted Answer

Although duress can be a factor in determining eligibility for innocent spouse relief, it is not the only factor. The IRS looks at a variety of factors, including whether the innocent spouse had knowledge of the tax deficiency and whether it would be unfair to hold the innocent spouse liable for the deficiency.

Question 14

The geographic location of the trial court in a tax dispute determines which of the appellate courts will hear an appeal.

Accepted Answer

The geographic location of the trial court determines which district of the appellate court will hear an appeal in a tax dispute. For example, if the trial court was in California, the appeal would go to the Ninth Circuit Court of Appeals.

Question 15

Tony Curtis filed her 2016 income tax return on May 2,2017.Which of the following statements is false?

Accepted Answer

All the statements provided are true, so none of them is false.

Question 16

Ms.Dela filed her unextended 2016 Form 1040 on November 2,2017,and had no reasonable cause for the delinquency.The return showed a $22,840 balance of tax due.Compute Ms.Dela's late-filing and late-payment penalty.

Accepted Answer

The answer of Ms.Dela filed her unextended 2016 Form 1040...

Question 17

Taxpayers who win their case in court are automatically entitled to recover litigation expenses from the government.

Accepted Answer

Taxpayers who win their case in court are not automatically entitled to recover litigation expenses from the government. The recovery of such expenses is subject to specific legal criteria and court discretion.

Question 18

Ms.Hepp filed her 2016 Form 1040 on February 19,2017.The return showed a $2,730 overpayment of tax,and Ms.Hepp received her refund check from the IRS on April 30.Which of the following statements is true?

Accepted Answer

The IRS does not pay interest on refunds issued within 45 days of the return's due date or the date filed, whichever is later. Since Ms. Hepp filed on February 19 and received her refund on April 30, the refund was issued within this 45-day window.

Question 19

If a taxpayer fails to pay a deficiency,the IRS can garnish the taxpayer's salary or wage to settle the liability.

Accepted Answer

The IRS can garnish a taxpayer's salary or wage if they fail to pay a deficiency. This is a form of enforced collection action that can be taken by the IRS to collect unpaid taxes.

Question 20

A person can't be relieved of liability for a tax deficiency under the innocent spouse rule if that person enjoyed significant financial benefit from taxable income omitted from the return.

Accepted Answer

The innocent spouse rule is designed to relieve an individual of liability for a tax deficiency if he or she meets certain criteria, including not knowing about the omission of taxable income and not benefiting significantly from that income. If the individual did benefit significantly from the omitted income, he or she cannot be relieved of liability under the innocent spouse rule.

Quiz 18: The Tax Compliance Process