BUSA 319 Chapter 1 Exam 2026
Questions and Answers
Which of the following is correct with respect to Private Letter Rulings?
=Issued when a taxpayer wants to know the tax treatment of a specific tax
situation.
=Can be relied upon by all taxpayers in a similar tax situation.
=Provides tax authority only to the taxpayer to whom it is issued.
=Both issued when a taxpayer wants to know the tax treatment of a specific tax
situation and provides tax authority only to the taxpayer to whom it is issued. -
Correct answer-Both issued when a taxpayer wants to know the tax treatment of a
specific tax situation and provides tax authority only to the taxpayer to whom it is
issued.
Which of the following statements is correct?
=Individuals who prepare their own tax returns are subject to Circular 230.
=Under Circular 230, contingent fees are permitted if disclosed in writing.
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,=Paid preparers must inform the client if the client has made an error in a
document submitted to the IRS.
=All of the statements are correct. - Correct answer-Paid preparers must inform the
client if the client has made an error in a document submitted to the IRS.
Under a flat tax, the marginal tax rate and the average tax rate are different.
=True
=False - Correct answer-Guess True/
Tameka has taxable income of $84,125 that is taxed as follows:
$9,225 × 10% = $922.50
($37,450 - $9,225) × 15% = 4,233.75
($84,125 - $37,450) × 25% = 11,668.75
Total Tax $16,825.00
Her average tax rate is:
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, =25%.
=20%.
=15%.
=10%. - Correct answer-20%
A single taxpayer cannot file a Form 1040EZ if she is age 65 or older.
=True
=False - Correct answer-True
Under the provisions of Circular 230, paid tax preparers must:
=Pass a competency examination.
=Inform the client if the client has made an error in a document submitted to the
IRS.
=Provide a covered opinion.
=Be an Enrolled Agent. - Correct answer-Inform the client if the client has made an
error in a document submitted to the IRS.
The marginal tax rate is the proportion of tax paid on the first dollar of taxable
income.
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Questions and Answers
Which of the following is correct with respect to Private Letter Rulings?
=Issued when a taxpayer wants to know the tax treatment of a specific tax
situation.
=Can be relied upon by all taxpayers in a similar tax situation.
=Provides tax authority only to the taxpayer to whom it is issued.
=Both issued when a taxpayer wants to know the tax treatment of a specific tax
situation and provides tax authority only to the taxpayer to whom it is issued. -
Correct answer-Both issued when a taxpayer wants to know the tax treatment of a
specific tax situation and provides tax authority only to the taxpayer to whom it is
issued.
Which of the following statements is correct?
=Individuals who prepare their own tax returns are subject to Circular 230.
=Under Circular 230, contingent fees are permitted if disclosed in writing.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,=Paid preparers must inform the client if the client has made an error in a
document submitted to the IRS.
=All of the statements are correct. - Correct answer-Paid preparers must inform the
client if the client has made an error in a document submitted to the IRS.
Under a flat tax, the marginal tax rate and the average tax rate are different.
=True
=False - Correct answer-Guess True/
Tameka has taxable income of $84,125 that is taxed as follows:
$9,225 × 10% = $922.50
($37,450 - $9,225) × 15% = 4,233.75
($84,125 - $37,450) × 25% = 11,668.75
Total Tax $16,825.00
Her average tax rate is:
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
, =25%.
=20%.
=15%.
=10%. - Correct answer-20%
A single taxpayer cannot file a Form 1040EZ if she is age 65 or older.
=True
=False - Correct answer-True
Under the provisions of Circular 230, paid tax preparers must:
=Pass a competency examination.
=Inform the client if the client has made an error in a document submitted to the
IRS.
=Provide a covered opinion.
=Be an Enrolled Agent. - Correct answer-Inform the client if the client has made an
error in a document submitted to the IRS.
The marginal tax rate is the proportion of tax paid on the first dollar of taxable
income.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
