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Exam 26: Tax Practice and Ethics

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Question 31

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Describe the following written determinations that are issued by the IRS.

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Question 32

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CPA Jennifer has heard about the AICPA's Statements on Standards for Tax Services.Although Jennifer is a licensed CPA in her state,she is not a member of the AICPA.How do the Statements affect Jennifer's tax practice?

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The Statements are enforceable standards...

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Question 33

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Debbie,a calendar year taxpayer,did not file a tax return for 2004 because she honestly believed that no additional tax was due.In 2010,Debbie is audited by the IRS and the agent assesses a deficiency of $7,000 for tax year 2004.Debbie need not pay this deficiency,since the statute of limitations expired on April 15,2008.

Failure to file and failure to pay penalties can be reduced if the taxpayer shows ____________________ for the omission.

A tax preparer is in violation of Circular 230 if he or she:

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

The Statements on Standards for Tax Services apply to members of the AICPA.

Why should the tax practitioner study the workings of the IRS?

In connection with the taxpayer penalty for substantial understatement of tax liability,what defenses (if any)are available?

During any month in which both the failure-to-file and failure-to-pay penalties apply,both penalties must be paid in full.

A CPA cannot take a tax return position for a client that is contrary to current IRS interpretations of the law.

A(n)___________________ member is required to follow the Statements of Standards for Tax Services in conducting a tax practice.

The IRS uses document matching programs to keep the audit rate low.

How is the tax law affected by Federal criminal statutes?

As a result of undervaluing property transferred by gift,Dan owes additional gift taxes of $3,000.The penalty for undervaluation does not apply in this situation,because the tax understatement was too small.

The IRS can pay an informant's fee of up to ____________________% of the recovered tax,interest,and penalty amounts.In the typical year,about ____________________ such rewards are paid.The reward can be as high as __________% for information provided by a "whistle blower."

After a tax audit,the taxpayer receives the Revenue Agent's Report and a "30-day letter."

The IRS need not pay the taxpayer interest on a refund if the IRS' payment is made within ____________________ days of the due date of a timely filed return.

The Code's scope of privileged communications for a CPA extends only to ____________________ advice given.

Which statement appearing below does not correctly describe the IRS letter ruling process?