Question
QUESTION 1 Mary Jones files her 2014 federal income tax return at an IRS office on February 4, 2016. Her return was on extension until
QUESTION 1
Mary Jones files her 2014 federal income tax return at an IRS office on February 4, 2016. Her return was on extension until 10/15/15. When does the Statute of Limitations (SOL) expire?
| A. | February 4, 2018 |
| B. | April 15, 2018 |
| C. | October 15, 2018 |
| D. | February 4, 2019 |
QUESTION 2
Your client's 2014 federal income tax return was filed on 4/15/15. Recently your client received an audit adjustment attributable to the basis of an investment asset, the adjustment of which represents an adjustment of 35% of the gross income reported on the return. At no time has the service secured a statute extension from the client. Here it is July 3, 2018 and your client presents you with the 30 day letter on the proposed adjustment. What do you advise?
| A. | The statute of limitations remains open for six years under IRC 6501(e). |
| B. | The statute of limitations has expired under IRC 6501(a) |
| C. | The statute of limitations remains open under IRC 6501(c) |
| D. | The statute of limitations is open under IRC 6501(c)(4) because your client didn't raise the statute of limitations defense earlier. |
QUESTION 3
Under IRC 6501(c)(4) a taxpayer may agree to extend the statute of limitations for assessment. Identify the statement that is true.
| A. | To terminate the 872-A statute of limitations (SOL), a taxpayer may submit a form 872-T to the IRS. |
| B. | The 872 and 872-A may not be restricted to specific items or issues. |
| C. | An 872 will never be secured if the statute of limitations in open under IRC 6501(e)(1) |
| D. | An estate tax return (chapter 11) statute of limitation may be extended by agreement. |
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