Fall 2025 ACCT 3353 02 Federal Taxation
Concepts - Exam 1 UPDATED Exam
Questions and CORRECT Answers
Which of the following are components of the FICA tax? - CORRECT ANSWER - Social
Security tax and Medicare tax
Who must use the tax table method to calculate their tax liability? - CORRECT ANSWER -
Bill Johnson whose taxable income is $36,000
Stephanie, a calendar year taxpayer, filed her 2019 tax return on February 12, 2020. If her return
does not omit gross income in excess of 25%, what is the latest date the IRS could assess an
additional 2019 tax liability against her? - CORRECT ANSWER - April 15, 2023
Which of the following is the primary goal of studying taxation? - CORRECT ANSWER -
Being able to recognize issues (or transactions) that have tax implications
Which of the following taxpayers is most likely NOT to be audited by the IRS? - CORRECT
ANSWER - Danny whose gross income of $36,000 was from wages that were in substantial
agreement with the amount reported to the IRS by his employer
Using the 2019 Tax Rate Schedule, calculate the liability for Thomas Jackson. Mr. Jackson is a
single taxpayer and has taxable income of $87,454. - CORRECT ANSWER - $15,163.46
(Response Feedback:
$87,454 - $84,200 = $3,254
$3,254 x 24% = $780.96 + $14,382.50 = $15,163.46)
While preparing your client's 2019 taxes, you discover that the client materially overstated the
amount paid for large piece of equipment in 2018. This error caused 2018 depreciation expense
to be materially overstated and will materially overstate 2019 depreciation expense. When you
call the client and advise him to amend the 2018 return, he informs you that he is unwilling to
amend the 2018 return and wants to play the audit lottery. To ensure compliance with the Code
, of Professional Conduct, what course of action should you take? - CORRECT ANSWER -
Withdraw from the engagement
What is the Federal income tax base? - CORRECT ANSWER - Taxable income
Which of the following is required to become a paid tax preparer? - CORRECT ANSWER -
Obtaining a Preparer Identification Number (PTIN) from the IRS
Which type of regulations provide the least amount of legal authority? - CORRECT
ANSWER - Proposed Regulations
Where does Dr. England suggest beginning tax research? - CORRECT ANSWER - Google
Search
Who is the client in a Kovel engagement? - CORRECT ANSWER - Attorney
Which court does not require the taxpayer to pay the tax deficiency before filing a lawsuit? -
CORRECT ANSWER - U.S. Tax Court
Your client resides in Huntsville, Texas. She is currently involved in a dispute with the IRS.
While performing research, you discovered several court cases that support her treatment of the
transaction is question. Of the court cases, which of the following provides the greatest legal
support for her treatment of the transaction? - CORRECT ANSWER - U.S. Court of Appeals
for the Fifth Circuit
Which type of IRS pronouncement provides an interpretation on how to comply with the tax
law? - CORRECT ANSWER - Revenue Procedures
In which of the following situations does Texas' accountant-privilege rule apply? - CORRECT
ANSWER - A request received by an accountant from a local newspaper asking for a copy of
the mayor's last tax return
Concepts - Exam 1 UPDATED Exam
Questions and CORRECT Answers
Which of the following are components of the FICA tax? - CORRECT ANSWER - Social
Security tax and Medicare tax
Who must use the tax table method to calculate their tax liability? - CORRECT ANSWER -
Bill Johnson whose taxable income is $36,000
Stephanie, a calendar year taxpayer, filed her 2019 tax return on February 12, 2020. If her return
does not omit gross income in excess of 25%, what is the latest date the IRS could assess an
additional 2019 tax liability against her? - CORRECT ANSWER - April 15, 2023
Which of the following is the primary goal of studying taxation? - CORRECT ANSWER -
Being able to recognize issues (or transactions) that have tax implications
Which of the following taxpayers is most likely NOT to be audited by the IRS? - CORRECT
ANSWER - Danny whose gross income of $36,000 was from wages that were in substantial
agreement with the amount reported to the IRS by his employer
Using the 2019 Tax Rate Schedule, calculate the liability for Thomas Jackson. Mr. Jackson is a
single taxpayer and has taxable income of $87,454. - CORRECT ANSWER - $15,163.46
(Response Feedback:
$87,454 - $84,200 = $3,254
$3,254 x 24% = $780.96 + $14,382.50 = $15,163.46)
While preparing your client's 2019 taxes, you discover that the client materially overstated the
amount paid for large piece of equipment in 2018. This error caused 2018 depreciation expense
to be materially overstated and will materially overstate 2019 depreciation expense. When you
call the client and advise him to amend the 2018 return, he informs you that he is unwilling to
amend the 2018 return and wants to play the audit lottery. To ensure compliance with the Code
, of Professional Conduct, what course of action should you take? - CORRECT ANSWER -
Withdraw from the engagement
What is the Federal income tax base? - CORRECT ANSWER - Taxable income
Which of the following is required to become a paid tax preparer? - CORRECT ANSWER -
Obtaining a Preparer Identification Number (PTIN) from the IRS
Which type of regulations provide the least amount of legal authority? - CORRECT
ANSWER - Proposed Regulations
Where does Dr. England suggest beginning tax research? - CORRECT ANSWER - Google
Search
Who is the client in a Kovel engagement? - CORRECT ANSWER - Attorney
Which court does not require the taxpayer to pay the tax deficiency before filing a lawsuit? -
CORRECT ANSWER - U.S. Tax Court
Your client resides in Huntsville, Texas. She is currently involved in a dispute with the IRS.
While performing research, you discovered several court cases that support her treatment of the
transaction is question. Of the court cases, which of the following provides the greatest legal
support for her treatment of the transaction? - CORRECT ANSWER - U.S. Court of Appeals
for the Fifth Circuit
Which type of IRS pronouncement provides an interpretation on how to comply with the tax
law? - CORRECT ANSWER - Revenue Procedures
In which of the following situations does Texas' accountant-privilege rule apply? - CORRECT
ANSWER - A request received by an accountant from a local newspaper asking for a copy of
the mayor's last tax return
