Expert Answer :CHAPTER 17—TAX PRACTICE AND ETHICS

Solved by verified expert :1962. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #16 Neither the taxpayer nor the government can appeal a decision of the Tax Court Small Cases Division.a. Trueb. False1963. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #17 Babs filed an amended return in 2011, claiming a refund relative to her 2009 tax computation. When the IRS approves the amended return, it will pay Babs interest with respect to the overpayment.a. Trueb. False1964. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #18 During any month in which both the failure-to-file and failure-to-pay penalties apply, both penalties must be paid in full.a. Trueb. False1965. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #19 Maria and Miguel Blanco are in the midst of negotiating a divorce. Because both parties are unwilling to share any current financial information, their joint Form 1040 for 2011 is not filed until October 31, 2012, when the respective divorce attorneys forced them to cooperate. The Blancos should not be subject to any Federal late-filing penalties, because of the reasonable cause exception.a. Trueb. False1966. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #20 A negligence penalty is 20% of the underpayment attributable to negligence.a. Trueb. False1967. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #21 Jaime’s negligence penalty will be waived, under the reasonable cause exception. He told the court, “My taxes were wrong because I couldn’t understand the tax law.”a. Trueb. False1968. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #22 Because he undervalued property that he transferred by gift, Dan owes additional gift taxes of $8,000. The penalty for undervaluation does not apply in this situation, because the tax understatement was too small.a. Trueb. False1969. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #23 In the context of civil tax fraud, the burden of proof is on the IRS to show by a “preponderance of the evidence” that the taxpayer had a specific intent to evade a tax.a. Trueb. False1970. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #24 In a criminal fraud case, the burden is on the taxpayer to show that he or she was innocent “beyond the shadow of any reasonable doubt.”a. Trueb. False1971. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #25 Yang, a calendar year taxpayer, did not file a tax return for 2005 because she honestly believed that no additional tax was due. In 2011, Yang is audited by the IRS and the agent assesses a deficiency of $17,000 for tax year 2005. Yang need not pay this deficiency, since the statute of limitations expired on April 15, 2009.a. Trueb. False1972. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #26 Keepert uses “two sets of books.” She only reports one-half of her cash sales on the records that she uses to complete her Federal income tax return. The statute of limitations for Keepert’s return is six years.a. Trueb. False1973. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #27 In the case of bad debts and worthless securities, the statute of limitations on claims for refund is seven years.a. Trueb. False1974. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #28 Jenny prepared Steve’s income tax returns for no compensation for 2008 and 2009. Jenny is Steve’s mother. In 2011, the IRS notifies Steve that it will audit his returns for 2007-2009. If Steve so desires, Jenny may represent him during the audit of all three returns.a. Trueb. False1975. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #29 Circular 230 applies to all tax practitioners. This includes attorneys, CPAs, and enrolled agents, even though each of the groups has its own code of conduct.a. Trueb. False1976. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #30 Circular 230 requires that a tax preparer be aware of changes in the tax law. Furthermore, office practices of the preparer must be up to industry standards.a. Trueb. False1977. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #31 Under Circular 230, Burke cannot complete a client’s original Form 1040 and charge a fee equal to one-third of the resulting refund.a. Trueb. False