Question 1

Cite two instances that would lead to imposition of criminal penalties on the return preparers.

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Question 2

"In case of both civil and criminal frauds, the burden of proof is on the IRS." Explain.

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Question 3

What is the procedure for claiming refund or credit for overpayment of tax?

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Question 4

If a taxpayer never files a tax return then there is an endless Statute of Limitations on assessment.

Accepted Answer

According to the Internal Revenue Service (IRS), if a taxpayer fails to file a tax return, there is no statute of limitations on assessment. This means that the IRS can come after the taxpayer at any time to assess taxes, penalties, and interest on the unreported income. Therefore, it is very important for taxpayers to file their tax returns on time to avoid any potential legal and financial implications.

Question 5

Some taxpayers may request to have their taxes assessed in 18 months.

Accepted Answer

Taxpayers can request to have their taxes assessed in 18 months through the Extended Payment Plan offered by the IRS. This plan allows taxpayers to pay their tax bill in monthly installments over a longer period of time. A request for this plan must be made within 120 days of the tax filing deadline.

Question 6

Could a taxpayer make such a small amount of income that a tax return not be filed and still have an unlimited Statute of Limitations on Assessment?

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Question 7

What are the two types of statutory agreements that may be used to resolve tax disputes? Describe each one of them in detail.

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Question 8

What is the statute of limitations? Explain the nature of statutes of limitations. List the circumstances in which the statute of limitations can be suspended.

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Question 9

List some of the possible defenses that a tax payer may resort to against a charge of criminal tax offense.

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Question 10

If a taxpayer mistakenly overstates itemized deductions which results in an understatement of adjusted gross income of 25 percent, the IRS has a 6-year Statute of Limitations on assessment.

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Question 11

If the Statute of Limitations on assessment is about to expire, the IRS may request an extension, but the taxpayer is not required to agree to such extension.

Accepted Answer

The IRS may request an extension, but the taxpayer is not obligated to agree to it.

Question 12

What are the requirements to be satisfied for the issue of an injunction by the IRS against a TRP who is guilty of misconduct to prohibit him or her from engaging in such misconduct or from practicing as a return preparer?

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Quiz 14: Tax Practice and Administration: Sanctions, Agreements, and Disclosures