1. Which of the following is a responsibility of a local office of the IRS?
a. Advising the Treasury Department on legislation
b. Intelligence operations
c. Appellate procedures
d. Developing IRS rules and regulations
e. None of the above
2. Which of the following is the most common type of audit for an individual taxpayer who conducts no significant business activities?
a. Office audit
b. Correspondence audit
c. Telephone audit
d. Field audit
e. Service center audit
3. In which of the following ways are tax returns selected for most audits?
a. Through the Discriminant Function System
b. Through informants
c. Through news sources
d. Through information from other government agencies
4. Which of the following is not a penalty that may be imposed by the IRS?
a. Failure-to-file penalty
b. Failure-to-pay penalty
c. Penalty for negligence
d. Fraud penalty
e. All of the above may be imposed by the IRS
5. If a taxpayer’s 2014 individual income tax return was filed on February 1, 2015, the statute of limitations would normally run out on:
a. April 15, 2018
b. February 1, 2016
c. February 1, 2017
d. February 1, 2018
e. None of the above
6. Which of the following deductions has a 6-year statute of limitations?
a. Depreciation
b. Salaries
c. Travel and entertainment
d. A return in which the taxpayer omitted gross income in excess of 25 percent of the gross income shown on the return
e. Worthless securities
7. Which of the following tax preparers may not represent their clients in all IRS proceedings?
a. An enrolled agent
b. A certified public accountant
c. An attorney
d. All of the above may represent their clients in IRS proceedings
8. After the 2015 filing season, of the following is not required to participate in the Annual Filing Season Program?
a. 18 total hours of continuing education from an approved provider
b. An annual federal tax refresher course lasting at least 6 hours
c. A comprehensive oral exam administered by the IRS that tests preparer knowledge
d. A PTIN if the preparer wishes to prepare and file tax returns.
e. All of the above are required
9. The Registered Tax Return Preparer program:
a. Has been abandoned for the time being barring any legislative action
b. Remains in force for the 2015 filing season
c. Is continuing to be litigated by the IRS
d. Required all types of preparers, including CPAs and attorneys, to comply with its requirements
e. All of the above are true with respect to the RTRP
10. In which of the following situations does the burden of proof in a tax matter not automatically shift to the IRS?
a. The IRS uses statistics to reconstruct an individual’s income.
b. A court proceeding against an individual taxpayer involves a penalty or addition to tax.
c. A taxpayer who did not maintain records.
d. a and b are correct.
e. a, b, and c are correct.
11. Which of the following have privileged communication with a client in a noncriminal tax matter?
a. CPAs
b. Enrolled agents
c. Attorneys
d. a and c
e. a, b, and c