Test Bank in Conjunction with Federal Tax Research, Sawyers,10e

1. Taxcomplianceistheprocessof:
a. filingnecessarytaxreturns
b. gatheringthefinancialinformationnecessarytoreporttaxableincome
c. representingataxpayeratanIRSaudit
d. alloftheabove


ANSWER: d

POINTS: 1

DIFFICULTY:Easy



2. Taxevasionis:
a. afraudulentactinvolvingillegalnonpaymentoftaxes
b. oneoftheobjectivesoftaxplanning
c. anactofdeferringtaxpaymentstofutureperiods
d. thesameastaxavoidanceasbothofthemresultinnonpaymentoftaxes


ANSWER: a

POINTS: 1

DIFFICULTY:Easy



3. Taxlitigationisaprocessof:
a. participatinginanadministrativeaudit
b. settlingtax-relateddisputesinacourtoflaw
c. filingamendedtaxreturnsasprescribedbytaxlaws
d. arrangingataxpayer’saffairstominimizetaxliabilities


ANSWER: b

POINTS: 1

DIFFICULTY:Easy



4. Regardingopentransactions,whichofthefollowingstatementsisINCORRECT?
a. thetransactionisnotyetcompleted
b. thepractitionercansuggestchangestoachieveabettertaxresult

,c. ataxpractitionerhassomedegreeofcontrolovertheclient’staxliability
d. thepractitionercanfixtheproblembyamendingtheclient’staxreturn


ANSWER: d

POINTS: 1

DIFFICULTY:Easy

,5. WhichofthefollowingstatementsbestdescribesCircular230?
a. Circular230hasbeenadoptedbytheAICPAasitssetofrulesofpracticeforCPAs.
b. Circular230isasetofTreasuryDepartmentethicalandlegalstandardsforthoseengaginginpracticebeforethe
IRS.
c. Circular230isasetofinternalrulesattheIRSdesignedtoprotecttaxpractitionersfromunfairdisciplinebytheI
RS.
d. Circular230isasetofethicalrulesfortaxpayers.


ANSWER: b

POINTS: 1

DIFFICULTY:Moderate



6. WhocanrepresentataxpayerbeforetheIRSAppealsOfficeunderCircular230?
a. ACPA
b. Anofficerofacorporationmayrepresentthecorporation
c. Anattorney
d. Alloftheabove
e. Onlyaandc


ANSWER: d

POINTS: 1

DIFFICULTY:Moderate



7. Inaclosedtransaction,thescopeoftaxplanningis:
a. morelimitedascomparedtoanopentransaction
b. limitedbytheIRSrulesofpractice
c. limitedtopresentingthetaxpayer’sfactstothegovernmentinthemostfavorable,legalmanner
d. Onlyaandc


ANSWER: d

POINTS: 1

DIFFICULTY:Moderate

, 8. Circular230includesrulesonallofthefollowingtopicsEXCEPT:
a. whoisauthorizedtopracticebeforetheIRS
b. standardsfor“coveredopinions”
c. compliancewithstateethicalrequirements
d. asetofbestpracticestoguidepractitioners


ANSWER: c

POINTS: 1

DIFFICULTY:Moderate