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.