11) Treasury Department Circular 230 regulates the practice of attorneys, CPAs, enrolled agents, and enrolled actuaries before the IRS.
12) Anyone who prepares a tax return is subject to the provisions of Circular 230.
13) The Internal Revenue Service is part of the
B) Treasury Department.
C) Federal Bureau of Investigation.
D) U.S. Customs Department.
14) The program specifically designed to identify returns with a high potential for a deficiency assessment is the
B) DIF program.
C) instant audit program.
D) 1040 program.
15) Identify which of the following statements is false.
A) The majority of the individual tax returns that are audited are selected under the DIF program.
B) The TCMP audit program has been temporarily suspended by the IRS and replaced in part by lifestyle audits.
C) The IRS is authorized to pay a reward to individuals who provide information resulting in increased collections.
D) All of the above are false.
16) Identify which of the following statements is true.
A) If a taxpayer has been audited in at least one of the two previous years on the same item and the earlier audit did not result in any additional tax owed, the taxpayer may qualify for the special audit relief rule.
B) A taxpayer can request and always receive an exemption from an audit by the IRS if his return was audited in at least one of the two previous years and the previous audit did not result in any change to his tax liability.
C) The signing of Form 870 allows the taxpayer to wait for 30 interest-free days after the billing date to pay the tax.
D) All of the above are true.
17) Identify which of the following statements is false.
A) A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue.
B) If the taxpayer being audited does not concur with the proposed assessment, the Service is required to send the taxpayer a 30-day letter detailing the proposed changes and the available appeals process.
C) During the audit process, if the taxpayer concurs with the assessment of tax by the IRS and signs Form 870 (Waiver of Restrictions on Assessment and Collection of Deficiency in Tax), then the taxpayer is precluded from filing a refund suit.
D) Interest on a deficiency accrues from the due date of the return through the payment date.
18) Identify which of the following statements is false.
A) Appeals officers usually have the operating authority to settle disputes with taxpayers based on the “hazards of litigation.”
B) When an appeals officer is dealing with an “appeals coordinated issue,” he has the authority to settle with the taxpayer based on the “hazards of litigation.”
C) A Technical Advice Memorandum may be requested by an IRS auditor if the transaction in question involves an especially complex tax issue.
D) If the taxpayer and the appeals officer fail to reach agreement, the IRS issues a 90-day letter.
19) The IRS provides advice concerning an issue that arises during an audit by issuing
A) a revenue ruling.
B) an audit memorandum.
C) a technical advice memorandum.
D) a private letter ruling.
20) In order to appeal to the Appeals Division, a taxpayer must submit a protest letter to the IRS
A) if an office audit is involved.
B) as a response to receiving a 30-day letter.
C) in a field audit involving a assessment of taxes, interest, and penalties in excess of $25,000.
D) if a TCMP audit is involved.