11. Which of the following is true with respect to capital gains and losses of a corporation?

a.	A corporation can offset ordinary income with capital losses.
b.	A corporation pays 15 percent long-term capital gains rate, just like an individual.
c.	A corporation can carry a capital loss back 5 years.
d.	A corporation can carry a capital loss forward 5 years.

Indicate whether the statement is true or false.

12. The Wage and Investment Office of the IRS handles small business taxpayers.

a.	True
b.	False

13. Taxpayers who are unable to pay their taxes may enter into a payment plan with the IRS if the amount they owe is within certain limits.

a.	True
b.	False

14. Tax returns are processed at the IRS national office in Washington, DC.

a.	True
b.	False

Indicate the answer choice that best completes the statement or answers the question.

15. If a taxpayer makes all of his income from his job and various investments, which office of the IRS would likely investigate his return if it were audited?

a.	Wage & Investment Division (W&I)
b.	Large & Midsize Business Office
c.	Small Business Office
d.	Criminal Investigation Office
e.	None of these offices would perform the audit

Indicate whether the statement is true or false.

16. The IRS may issue summons for a taxpayer's bank account records.

a.	True
b.	False

17. The tax law is administered by the Federal Trade Commission.

a.	True
b.	False

Indicate the answer choice that best completes the statement or answers the question.

18. At which of the following IRS locations are tax returns processed?

a.	Regional offices
b.	IRS Campus Processing Sites
c.	Local offices
d.	National office
e.	None of these

19. In the following independent situations, is it better to make an installment agreement with the IRS, an offer in compromise with the IRS, or ask for an extension of time to pay any taxes owed? a. A taxpayer is unlikely to pay the tax amount they owe. b. Using monthly payments, a taxpayer can afford to pay off the tax owed within 2 years. c. A taxpayer can pay off their tax owed when they sell their boat which is up for sale.

20. Match the following titles with their descriptions: a. Commissioner of Internal Revenue b. IRS Campus Processing Site c. Large Business and International Division

d. Small Business/Self-Employed Division e. Wage & Investment Division 1. Services taxpayers with assets of $10 million or more 2. Services taxpayers who pay most of their taxes through withholding 3. Establishes policy, supervises the activities of the organization, and acts in an advisory capacity to the Treasury Department on legislative matters 4. Services individuals who file Form 1040 Schedules, C, E, or F 5. Processes the information from tax documents

Indicate whether the statement is true or false.

21. Taxpayers are required by law to maintain records to facilitate an IRS audit.

a.	True
b.	False

Indicate the answer choice that best completes the statement or answers the question.

22. Which of the following is false regarding the return audit process?

a.	The higher DIF score a return gets, the higher the likelihood for audit.
b.	An office audit is performed at an IRS office.
c.	25 percent of taxpayers are audited every year.
d.	None of these is false.

Indicate whether the statement is true or false.

23. An "office audit" is an audit in which the revenue agent visits the taxpayer's office.

a.	True
b.	False

Indicate the answer choice that best completes the statement or answers the question.

24. A tax return with a large casualty loss would be most likely selected for audit through:

a.	The Discriminant Function System
b.	Information from an informant
c.	Information from another governmental agency
d.	The Taxpayer Compliance Measurement Program
e.	None of these

25. Which of the following types of audits was suspended due to protests from taxpayers and lawmakers?

a.	Discriminant Function System selected audit
b.	Taxpayer Compliance Measurement Program selected audit
c.	Correspondence audit
d.	Office audit
e.	None of these