AC 371- Chapter 2 Homework
Latoya filed her tax return on February 10 this year. When will the statute of limitations expire for this tax return?
3 years from April 15th
Juanita, a Texas resident (5th Circuit), is researching a tax question and finds a 5th Circuit case ruling that is favorable and a 9th Circuit case that is unfavorable. Which circuit case has more "authoritative weight"?
5th Circuit
Latoya filed her tax return on February 10 this year. When will the statute of limitations expire for this tax return if Latoya understated her income by 40 percent?
6 years from April 15th
PLR 9727004
Administrative
Reg. Sec. 1.111-1(b)
Administrative
Rev. Rul. 82-204, 1982-2 C.B. 192
Administrative
Randy deducted a high level of itemized deductions two years ago relative to his income level. He recently received an IRS notice requesting documentation for his itemized deductions. What audit procedure likely identified his tax return for audit?
Discriminant Function System
A textbook is an example of a primary authority.
False
Which of the following committees is not involved in enacting tax legislation?
House Tax Committee
How would your answer change if Latoya intentionally failed to report as taxable income any cash payments she received from her clients?
Indefinite period from April 15th
Jackie's return was selected for audit because she did not report her salary (from her Form W-2 from her employer) on her tax return. Which IRS program likely identified Jackie's oversight?
Information matching
Which of the following has the highest authoritative weight?
Internal Revenue Code
Jamarcus, a full-time student, earned $3,650 this year from a summer job. He had no other income this year and will have zero federal income tax liability this year. His employer withheld $438 of federal income tax from his summer pay. Is Jamarcus required to file a tax return? Should Jamarcus file a tax return?
Jamarcus is not required to file an income tax return because his gross income of $3,650 is well below the gross income threshold for a single taxpayer. However, he should file a taxreturn to receive a refund of the $438 previously withheld.
Amdahl Corp., 108 TC 507 (1997)
Judicial
Hills v. Comm., 50 AFTR2d 82-6070 (11th Cir., 1982)
Judicials
The estate of Monique Chablis earned $550 of income this year. Is the estate required to file an income tax return?
No, because the estate's gross income is less than $600 the estate is not required to file an income tax return.
Jamareo has found a "favorable" authority directly on point for his tax question. b. Which administrative authority would he least prefer to answer his question?
Private Letter Ruling
Sophia recently won a tax case litigated in the 7th Circuit. She has just heard that the Supreme Court denied the writ of certiorari. Should she be happy or not, and why?
Sophia should feel happy as the denial of the writ of certiorari means the Supreme Court will not hear her tax case.
IRC Sec. 469(c)(7)(B)(i)
Statutory
Meeting which of the following standards for tax return positions would allow both taxpayers and tax practitioners to avoid a penalty with respect to a tax return position?
Substantial authority
Which of the following is not considered a primary authority?
Tax Law Review article
Jamareo has found a "favorable" authority directly on point for his tax question. a. If the authority is an administrative authority, which specific type of authority would he prefer to answer his question?
Treasury Department Regulation
Private Letter Rulings have less authoritative weight than Revenue Rulings.
True
The "30-day" letter gives the taxpayer the opportunity to pay the proposed tax adjustment or file a petition in the U.S. District Court to hear the case.
True
The tax return filing requirements for individual taxpayers depend on the taxpayer's gross income
True
U.S. District Courts appeal to U.S. Circuit Courts.
True
Robert has found a "favorable" authority directly on point for his tax question. b. Which court would he least prefer to have issued the opinion?
U.S. District Courts in jurisdictions other than his own
Robert has found a "favorable" authority directly on point for his tax question. a. If the authority is a court case, which court would he prefer to have issued the opinion?
U.S. Supreme Court
Molto Stancha Corporation had zero earnings this fiscal year; in fact, it lost money. Must the corporation file a tax return?
Yes, all corporations are required to file an income tax return regardless of their taxable income.