Question 1

One of the motivations for making a gift is to save on income taxes.

Accepted Answer

A) True 
 B)False

Question 2

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

Accepted Answer

A) True 
 B)False

Question 3

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

Accepted Answer

A) True 
 B)False

Question 4

The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the U.S.

Accepted Answer

A) True 
 B)False

Question 5

Even though a client refuses to correct an error on a past return, it may be possible for a practitioner to continue to prepare returns for the client.

Accepted Answer

A) True 
 B)False

Question 6

As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

Accepted Answer

A) True 
 B)False

Question 7

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the
U.S. Supreme Court.

Accepted Answer

A) True 
 B)False

Question 8

The civil fraud penalty can entail large fines and possible incarceration.

Accepted Answer

A) True 
 B)False

Question 9

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

Accepted Answer

A) True 
 B)False

Question 10

For individual taxpayers, the interest rate for income tax refunds overpayments) is the same as that applicable to assessments underpayments).

Accepted Answer

A) True 
 B)False

Question 11

Under what conditions is it permissible, from an ethical standpoint, for a CPA firm to outsource tax return preparation to a third party?

Accepted Answer

First, the clients' confidenti

Question 12

A use tax is imposed by:

Accepted Answer

A)  The Federal government and all states. 
B)  The Federal government and a majority of the states. 
C)  All states and not the Federal government. 
D)  Most of the states and not the Federal government. 
E)  None of these. 
A)  The Federal government and all states. 
B)  The Federal government and a majority of the states. 
C)  All states and not the Federal government. 
D)  Most of the states and not the Federal government. 
E)  None of these.

Question 13

Which of the following is a characteristic of the audit process?

Accepted Answer

A)  Most taxpayer audits involve "special" agents. 
B)  Self-employed taxpayers are less likely to be selected for audit than employed taxpayers. 
C)  Less important issues are handled by means of a correspondence audit. 
D)  If a taxpayer disagrees with the IRS auditor's finding, the only resort is to the courts. 
E)  None of these. 
A)  Most taxpayer audits involve "special" agents. 
B)  Self-employed taxpayers are less likely to be selected for audit than employed taxpayers. 
C)  Less important issues are handled by means of a correspondence audit. 
D)  If a taxpayer disagrees with the IRS auditor's finding, the only resort is to the courts. 
E)  None of these.

Question 14

Federal excise taxes that are no longer imposed include:

Accepted Answer

A)  Tax on air travel. 
B)  Tax on wagering. 
C)  Tax on the manufacture of sporting equipment. 
D)  Tax on alcohol. 
E)  None of these. 
A)  Tax on air travel. 
B)  Tax on wagering. 
C)  Tax on the manufacture of sporting equipment. 
D)  Tax on alcohol. 
E)  None of these.

Question 15

If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.

Accepted Answer

A) True 
 B)False

Question 16

In an office audit, the audit by the IRS takes place at the office of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 17

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Accepted Answer

Tracy might save herself time and expens

Question 18

Which, if any, of the following is a typical characteristic of an ad valorem tax on personalty?

Accepted Answer

A)  Taxpayer compliance is greater for personal use property than for business use property. 
B)  The tax on automobiles sometimes considers the age of the vehicle. 
C)  Most states impose a tax on intangibles. 
D)  The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid. 
E)  None of these. 
A)  Taxpayer compliance is greater for personal use property than for business use property. 
B)  The tax on automobiles sometimes considers the age of the vehicle. 
C)  Most states impose a tax on intangibles. 
D)  The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid. 
E)  None of these.

Question 19

A calendar year taxpayer files his 2017 Federal income tax return on March 4, 2018. The return reflects an overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2018. The refund need not include interest.

Accepted Answer

A) True 
 B)False

Question 20

For Federal income tax purposes, there never has been a general amnesty period.

Accepted Answer

A) True 
 B)False

One of the motivations for making a gift is to save on income taxes.

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the U.S.

Even though a client refuses to correct an error on a past return, it may be possible for a practitioner to continue to prepare returns for the client.

As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the U.S. Supreme Court.

The civil fraud penalty can entail large fines and possible incarceration.

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

For individual taxpayers, the interest rate for income tax refunds overpayments) is the same as that applicable to assessments underpayments).

Under what conditions is it permissible, from an ethical standpoint, for a CPA firm to outsource tax return preparation to a third party?

A use tax is imposed by:

Which of the following is a characteristic of the audit process?

Federal excise taxes that are no longer imposed include:

If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.

In an office audit, the audit by the IRS takes place at the office of the taxpayer.

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Which, if any, of the following is a typical characteristic of an ad valorem tax on personalty?

A calendar year taxpayer files his 2017 Federal income tax return on March 4, 2018. The return reflects an overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2018. The refund need not include interest.

For Federal income tax purposes, there never has been a general amnesty period.

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters

Exam 1: An Introduction to Taxation and Understanding the Federal Tax Law

One of the motivations for making a gift is to save on income taxes.

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the U.S.

Even though a client refuses to correct an error on a past return, it may be possible for a practitioner to continue to prepare returns for the client.

As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the U.S. Supreme Court.

The civil fraud penalty can entail large fines and possible incarceration.

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

For individual taxpayers, the interest rate for income tax refunds overpayments) is the same as that applicable to assessments underpayments).

Under what conditions is it permissible, from an ethical standpoint, for a CPA firm to outsource tax return preparation to a third party?

A use tax is imposed by:

Which of the following is a characteristic of the audit process?

Federal excise taxes that are no longer imposed include:

If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.

In an office audit, the audit by the IRS takes place at the office of the taxpayer.

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Which, if any, of the following is a typical characteristic of an ad valorem tax on personalty?

A calendar year taxpayer files his 2017 Federal income tax return on March 4, 2018. The return reflects an overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2018. The refund need not include interest.

For Federal income tax purposes, there never has been a general amnesty period.

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters