Enrolled Agent - Part 2 Questions and
Answers Rated A+
What is the purpose of an enrolled agent?
✔✔To represent taxpayers before the IRS
What form is used to file for an extension of time to file an individual tax return?
✔✔Form 4868
What is the statute of limitations for the IRS to assess additional taxes in most cases?
✔✔Three years
What is the allowable mileage rate for business travel purposes?
✔✔The rate set annually by the IRS
What does the term "basis" refer to in tax terminology?
✔✔The value used to determine gain or loss on a sale of an asset
1
,What form must a taxpayer file to report self-employment income?
✔✔Schedule C
What does depreciation allow a business to do?
✔✔Recover the cost of an asset over its useful life
What is the tax treatment of a gift to an employee exceeding $25?
✔✔It must be included in the employee’s taxable income
What form is used to report interest and ordinary dividends?
✔✔Schedule B
What is the income threshold for mandatory electronic filing of a corporate tax return?
✔✔$10 million or more
What is the penalty for failing to file a tax return by the deadline?
✔✔5% of the unpaid taxes per month, up to 25%
2
,What is the IRS definition of gross income?
✔✔All income from whatever source derived, unless excluded by law
What form is used for amending an individual income tax return?
✔✔Form 1040-X
What is the alternative minimum tax (AMT) designed to do?
✔✔Ensure that taxpayers with high incomes pay at least a minimum amount of tax
What form is used to apply for an Employer Identification Number (EIN)?
✔✔Form SS-4
What is the tax treatment of a capital gain from the sale of an asset held for more than one year?
✔✔It is taxed at long-term capital gains rates
What is the purpose of estimated tax payments?
✔✔To pay taxes on income not subject to withholding
3
, What is the penalty for underpayment of estimated taxes?
✔✔An additional amount based on the interest rate set by the IRS
What form is used to report a business's annual profit or loss?
✔✔Form 1120 for corporations or Form 1065 for partnerships
What is the standard deduction?
✔✔A fixed dollar amount that reduces taxable income
What is the tax consequence of a forgiven debt?
✔✔It is generally treated as taxable income
What is the deadline for filing a partnership tax return?
✔✔March 15th, or the 15th day of the third month after the end of the tax year
What is the maximum amount of net capital losses an individual can deduct in a tax year?
✔✔$3,000
4
Answers Rated A+
What is the purpose of an enrolled agent?
✔✔To represent taxpayers before the IRS
What form is used to file for an extension of time to file an individual tax return?
✔✔Form 4868
What is the statute of limitations for the IRS to assess additional taxes in most cases?
✔✔Three years
What is the allowable mileage rate for business travel purposes?
✔✔The rate set annually by the IRS
What does the term "basis" refer to in tax terminology?
✔✔The value used to determine gain or loss on a sale of an asset
1
,What form must a taxpayer file to report self-employment income?
✔✔Schedule C
What does depreciation allow a business to do?
✔✔Recover the cost of an asset over its useful life
What is the tax treatment of a gift to an employee exceeding $25?
✔✔It must be included in the employee’s taxable income
What form is used to report interest and ordinary dividends?
✔✔Schedule B
What is the income threshold for mandatory electronic filing of a corporate tax return?
✔✔$10 million or more
What is the penalty for failing to file a tax return by the deadline?
✔✔5% of the unpaid taxes per month, up to 25%
2
,What is the IRS definition of gross income?
✔✔All income from whatever source derived, unless excluded by law
What form is used for amending an individual income tax return?
✔✔Form 1040-X
What is the alternative minimum tax (AMT) designed to do?
✔✔Ensure that taxpayers with high incomes pay at least a minimum amount of tax
What form is used to apply for an Employer Identification Number (EIN)?
✔✔Form SS-4
What is the tax treatment of a capital gain from the sale of an asset held for more than one year?
✔✔It is taxed at long-term capital gains rates
What is the purpose of estimated tax payments?
✔✔To pay taxes on income not subject to withholding
3
, What is the penalty for underpayment of estimated taxes?
✔✔An additional amount based on the interest rate set by the IRS
What form is used to report a business's annual profit or loss?
✔✔Form 1120 for corporations or Form 1065 for partnerships
What is the standard deduction?
✔✔A fixed dollar amount that reduces taxable income
What is the tax consequence of a forgiven debt?
✔✔It is generally treated as taxable income
What is the deadline for filing a partnership tax return?
✔✔March 15th, or the 15th day of the third month after the end of the tax year
What is the maximum amount of net capital losses an individual can deduct in a tax year?
✔✔$3,000
4
