The Internal Revenue Service may impose intermediate sanctions on a tax-exempt organization that gives an officer:A) Excessive compensation.B) More than the fair rental value for property owned by the officer.C) A bargain on the sale of assets.D) All of the above are transactions that may result in intermediatesanctions.

The correct answer is:D) All of the above are transactions that may result in intermediate…

Answered: The Internal Revenue Service may impose…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter12: Tax Administration And Tax Planning

Section: Chapter Questions

Problem 5MCQ

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Similar questions

Which of the following is not an administrative remedy available to the government? a. Assessment b. Distraint C. Tax Avoidance D. Tax Lien
Which of the following statements about the Commissioner’s powers is most correct? a. The Commissioner cannot request a taxpayer to provide information in writing. b. The Commissioner can remove documents from a taxpayer’s premises. c. The Commissioner is entitled to access a taxpayer’s premises at any reasonable time without notice. d. The Commissioner needs to obtain a search warrant in order to enter a taxpayer’s premises.
According to the AICPA's Statements on Standards for Tax Services, what duties does the tax practitioner owe the client? (If an input field is not used leave the input field(s) empty.) not to disclose tax-related errors without the client's consent. to inform the client of corrective measures to be taken. C to inform the client of errors in a previously filed tax return. to inform the client of how the client can avoid a penalty through disclosure. to inform the client of the potential adverse consequences of a tax return position. to inquire of the client when information provided by him or her appears incorrect, incomplete, or inconsistent on its face. to inquire of the client when the client must satisfy conditions to take a deduction. to instruct the client to file an extension based on refunds that are expected. to instruct the client whether or not to file a tax return.
An example of an expense not allowed as a deduction under Code Sec. 162(a) would be: a, a speeding ticket. b, expense incurred while operating an illegal gambling business. c, a government imposed penalty. d, both a and c. e, all of the above.
The following reasons may be given by a taxpayer in refusing to pay his tax liability. Which is not acceptable for legally refusing to pay the tax? o That he will derived no benefit from the tax. o That he has been deprived of due process of law o That the prescription period for the collection of tax has lapsed. o That there is lack of territorial jurisdiction (And please explain the reason why, thank you)
True or False. The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is "ordinary and necessary"
If a U.S. Tax Court agrees with the taxpayer on appeal that the IRS position was largely unjustified, which of the following is correct? The taxpayer must still pay administrative and litigation costs. The taxpayer may recover administrative but not litigation costs. The taxpayer may recover litigation but not administrative costs. To be eligible to recover some of the administrative and litigation costs, the taxpayer must have tried to resolve the case administratively, including going through the appeals process, and must have given the IRS the information necessary to resolve the case. None of the above.
Circular 230, Subpart B: Prohibits practitioners from advertising tax preparation services. Requires practitioners to provide the Secretary of the Treasury with information to investigate possible tax identity theft. Prohibits practitioners from charging unconscionable fees. Prohibits practitioners from providing financial planning services.
Indicate whether the following statements are "True" or "False" regarding the administrative powers of the IRS. a. If the taxpayer meets the record-keeping requirement and substantiates income and deductions properly, the IRS bears the burden of proof in establishing a tax deficiency during litigation. b. The Code permits the IRS to assess a deficiency and to demand payment for the tax. However, no assessment or effort to collect the tax may be made until 30 days after a statutory notice of a deficiency (a 30-day letter) is issued. c. If the taxpayer neglects or refuses to pay the tax after receiving the demand for payment, a lien in favor of the IRS is placed on all property (realty and personalty, tangible and intangible) belonging to the taxpayer.
For a cash basis taxpayer, income that has not actually been received by the taxpayer is taxed as though it had been received, thus income is considered constructively received when (mark apply that apply): A. The constructive receipt doctrine does not apply to income the taxpayer is not yet entitled to receive. B. The purpose of the constructive receipt doctrine is to prevent a cash basis taxpayer from deferring the recognition of income that, although not yet received, has been made practically available to the taxpayer. OC. The taxpayer's actual receipt is not subject to substantial limitations or restrictions. D. The amount is made readily available to the taxpayer. E. None of these are true.
Indicate whether the following statements are "True" or "False" regarding letter rulings. a. Letter rulings have the force and effect of law and provide guidance and support for taxpayers in similar transactions. b. A letter ruling represents the current opinion of the IRS on the tax consequences of a transaction with a given set of facts. c. Letter rulings not only help promote a uniform application of the tax laws but also may reduce the potential for litigation or disputes with IRS agent
4. The Bureau of Internal Revenue filed a case against Prorealty Corporation due to non-compliance with the said agency and delinquent tax payer. What could be the possible action of the Corporation? Discuss and relate it to the Political Risk.

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