Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 12, Problem 2P
To determine
Introduction:
An individual is willing to increase after-tax
To indicate: If the statements are true or false.
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Tax Drill - Types of Audits
Complete the following statements regarding the types of audit conducted by the IRS.
Taxpayers usually are able to settle routine tax disputes (e.g., queries involving the documentation of deductions) through with the IRS. However, are conducted in an office of the IRS. In most instances, the taxpayer is subject to . A is conducted by IRS agents at the office or home of the taxpayer or at the office of the taxpayer's representative.
The Taxpayer Advocate Service (TAS) can help taxpayers with what type of assistance? As a first step, rather than dealing with the IRS, when the taxpayer believes there are unusual circumstances involved. When the taxpayer feels the resolution applied by the IRS is unreasonable. If there is a financial difficulty, emergency, or hardship and the IRS needs to move faster than normal. When an audit results in a significant change and the deadline for appeal has passed.
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.
What is a primary responsibility of taxpayers during a tax audit? a) Providing false information to the tax
authority b) Cooperating with the tax authority by providing requested documentation c) Refusing to
communicate with the tax authority d) Ignoring audit requests and deadlines
Chapter 12 Solutions
Income Tax Fundamentals 2020
Ch. 12 - Which of the following is a responsibility of a...Ch. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQ
Ch. 12 - Prob. 11MCQCh. 12 - Prob. 12MCQCh. 12 - Which of the following have privileged...Ch. 12 - Prob. 14MCQCh. 12 - Prob. 15MCQCh. 12 - Prob. 16MCQCh. 12 - Prob. 17MCQCh. 12 - Taxpayers have the right to have an IRS...Ch. 12 - If a U.S. Tax Court agrees with the taxpayer on...Ch. 12 - If the IRS owes a taxpayer a refund, the law...Ch. 12 - Prob. 21MCQCh. 12 - Melodie's taxable income is $39,000 and she pays...Ch. 12 - Jim has a house payment of $2,000 per month of...Ch. 12 - Indicate which of the following statements are...Ch. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - In the 2019 tax year, Michelle paid the following...Ch. 12 - Prob. 5PCh. 12 - Prob. 6PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11PCh. 12 - Prob. 12P
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Similar questions
- Indicate which of the following statements are true or false: ________The IRS is a division of the Treasury Department. ________The IRS has four major divisions. ________The IRS local offices process most individual tax returns. ________IRS Campus Processing Sites are the locations that taxpayers should call to obtain tax information. ________Taxpayers should have their CPAs keep their tax records to prevent the IRS from being able to summon their records. ________Most IRS audits are conducted through the mail.arrow_forwardExplain who needs to pay estimated taxes, when to file or amend your return, and how to handle an audit.arrow_forwardWhich is NOT a proper exercise of administrative feasibility?a. Electronic Tax Payment System (eTPS)/Land Bank Remittance System (LBRS)b. Payment of tax thru credit/debit/prepaid cards/G-Cashc. Requirement to all taxpayers to file tax returnsd. Substituted Filing of Qualified Compensation Income Earnersarrow_forward
- Describe the nature of the evidence the internal revenue agentwill use in the audit of Jones Company’s tax return.arrow_forwardCPAs understand – far better than most clients do, in fact – that the IRS real-ly audits very few tax returns, so the odds of any particular return being selected for audit are (abysmally) low. According to SSTS No. 1, of what relevance, if any, is that knowledge as to what kind of tax return-related advice a CPA should give a client?arrow_forwardAfter Bill and Mercedes' tax return was selected for audit, Bill read on the Internet speculation that filing a paper tax return (instead of filing electronically) and extending a tax return deadline decrease the chance of IRS audit. Bill has convinced Mercedes that they need to use these strategies in the future and look for other ways to avoid audit. Questions for discussion include: 1. What are the timing requirements for filing a tax return and paying taxes owed? 2. Does Bill's action likely violate any IRS regulation? 3. If Bill's action does not violate IRS rules, it is ethical? Please make sure to respond to other students' discussion answers, especially if they have a different point of view than yours.arrow_forward
- Give the Circular 230 position concerning each of the following situations sometimes encountered in the tax profession. Taking an aggressive pro-taxpayer position on a tax return. Not having a quality review process for a return completed by a partner of the tax firm. Purposely delaying compliance with a document request received from the IRS. Not keeping up with changes in the tax law. Charging $4,500 to complete a simple Form 1040 with no supporting schedules. When representing a taxpayer in a Federal income tax audit, charging a fee equal to one-third of the reduction of the tax proposed by the IRS agent. Representing both the husband and wife when negotiating tax matters pertinent to their divorce. Advertising on the Web for new tax clients and including Se habla español in the text of the ads.arrow_forwardAudit Procedures for Income Taxes and Deferred Tax Assets/Liabilities: Auditing income taxes and deferred tax assets/liabilities involves verifying the accuracy of a company's tax reporting and assessing the timing and amounts of deferred tax assets and liabilities. Here's a detailed breakdown of the audit procedures: 1. Review of Tax Returns and Financial Statements: Impact: Auditors compare the information reported in the company's tax returns with its financial statements to identify any discrepancies or inconsistencies. Procedure: Auditors examine tax returns, schedules, and supporting documentation to ensure that income tax provisions in the financial statements are consistent with tax filings. 2. Evaluation of Deferred Tax Assets and Liabilities: Impact: Deferred tax assets and liabilities represent future tax consequences of transactions that have already occurred but have not yet been recognized for tax purposes. Procedure: Auditors assess the validity…arrow_forwardIn auditing payroll withholding and payroll tax expense, explainwhy emphasis should normally be on evaluating the adequacy of the payroll tax returnpreparation procedures rather than the payroll tax liability. If the preparation proceduresare inadequate, explain the effect this will have on the remainder of the audit.arrow_forward
- Discuss the ethics requirements for tax practitioners. Please discuss both the AICPA Statements of Standards for Tax Practice AND IRS Circular 230. How do ethics requirements differ for tax practice as compared to audit practice? Compare and contrast these.arrow_forwardCircular 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.arrow_forwardStatement 1: Filing reference number is the system developed and maintained by the BIR for electronically filing tax returns, including attachments, if any, and paying taxes due thereon, specifically through the internet Statement 2: Electronic filing and payment system number is the control number issued by the EFPS to acknowledge that a tax return, including attachments, has been successfully filed electronically. This shall serve as evidence of filing and the date of filing of the return Group of answer choices False; False True; True False; True True; Falsearrow_forward
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