FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 17: Tax Practice and Ethics

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

The Treasury issues "private letter rulings" and other determinations, usually in response to a taxpayer request. What is the purpose of the rulings program? Answer from both the taxpayer and the government points of view.

Correct Answer

verified

From the taxpayer's point of view, the I...

View Answer

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

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

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Harold, a calendar year taxpayer subject to a 35% marginal tax rate, claimed a Form 1040 charitable contribution deduction of $20,000 for a sculpture that the IRS later valued at $10,000. The applicable overvaluation penalty is:

According to AICPA rules, the CPA cannot take an aggressive tax return position on the basis of the "audit ____________________."

Freddie has been assessed a preparer penalty for willful and reckless conduct. When he completed Peggy's Federal income tax return (who is in the 35% tax bracket) , Freddie purposely omitted $100,000 of cash receipts that should have been reported as gross income. Freddie charged Peggy $6,000 to prepare the return. What is Freddie's preparer penalty?

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

Maureen, a calendar year taxpayer subject to a 35% marginal tax rate, claimed a Form 1040 charitable contribution deduction of $250,000 for a sculpture that the IRS later valued at $200,000. The applicable overvaluation penalty is:

What are the chief responsibilities of the IRS Commissioner, and of the Chief Counsel of the IRS?

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

Ron, a calendar year taxpayer subject to a 35% marginal tax rate, claimed a Form 1040 charitable contribution deduction of $250,000 for a sculpture that the IRS later valued at $150,000. The applicable overvaluation penalty is:

Carole, a CPA, feels that she cannot act as an aggressive advocate for tax clients in today's environment. What aspects of the ethical conduct of a tax practice might have influenced Carole's attitude?

A taxpayer penalty may be waived if there is shown to be reasonable cause for the misstatement on the tax return. The courts have applied this standard strictly. List three or more assertions for a waiver of a taxpayer penalty that courts have found not to constitute reasonable cause. Example: Ignorance of the tax law.

George, a calendar year taxpayer subject to a 45% marginal gift tax rate, made a gift of a sculpture to Redd, valuing the property at $100,000. The IRS later valued the gift at $140,000. The applicable undervaluation penalty is:

The penalty for substantial understatement of tax liability does not apply if:

Clara underpaid her taxes by $50,000. Of this amount, $15,000 was due to negligence on her part, as her record-keeping system is highly inadequate. Determine the amount of any negligence penalty

A letter ruling is issued by the IRS at no charge.

As part of a tax return engagement for XYZ Partnership, Enrolled Agent Wang can draft an amendment to the XYZ partnership agreement.

A ____________________% penalty may result when a taxpayer overstates by _____________________ percent or more the value of an asset contributed to a charity. or

About ____________________% of all Forms 1040 are audited each year. The rate is about ____________________% if income exceeds $1 million. or

The general statute of limitations regarding Federal tax returns extends for ____________________ years. It is ____________________ years if a substantial understatement of income is found, and ____________________ years with respect to worthless securities. or