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Chapter 2 Tax Compliance, the IRS, and Tax Authorities




Question;(1);[LO1] Ahmed does not have enough cash on hand;to pay his taxes. He was excited to hear;that he can request an extension to file his tax return. Does this solve his problem? What are the ramifications if he doesn?t pay;his tax liability by April 15?;(2);[LO1] Molto Stancha Corporation;had zero earnings this fiscal year, in fact, they lost money. Must they file a;tax return?;(3);[LO1] The estate of Monique;Chablis earned $450 of income this year. Is the estate required to file an;income tax return?;(4);[LO1] Jamarcus, a full-time;student, earned $2,500 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 $300 of federal income;tax from his summer pay. Is Jamarcus;required to file a tax return? Should;Jamarcus file a tax return?;(5);[LO1] Shane has never filed a;tax return despite earning excessive sums of money as a gambler. When does the statute of limitations expire;for the years in which Shane has not filed a tax return?;(6);[LO1] Latoya filed her tax;return on February 10th this year. When;will the statute of limitations expire for this tax return?;[LO1] Using the facts from the previous problem;how would your answer change if Latoya understated her income by 40 percent?;How would your answer change if Latoya intentionally failed to report as;taxable income any cash payments she received from her clients.;[LO2] Paula could not reach an agreement with;the IRS at her appeals conference and has just received a 90-day letter. If she wants to litigate the issue but does;not have sufficient cash to pay the proposed deficiency, what is her best court;choice?;(7);[LO2] In choosing a trial-level;court, how should a court?s previous rulings influence the choice? How should circuit court rulings influence;the taxpayer?s choice of a trial-level court?;(8);[LO2] Sophia recently won a tax;case litigated in the 7th Circuit. She;recently heard that the Supreme Court denied the writ of certiorari. Should she be happy or not, and why?;(9);[LO2] Campbell?s tax return was;audited because she failed to report interest she earned on her tax;return. What IRS audit selection method;identified her tax return?;(10);[LO2] Yong?s tax return was;audited because he calculated his tax liability incorrectly. What IRS audit procedure identified his tax;return for audit?;(11);[LO2] 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?;(12);[LO2] Jackie has a corporate;client that has recently received a 30 day notice from the IRS with a $100,000;tax assessment. Her client is;considering requesting an appeals conference to contest the assessment. What factors should Jackie advise her client;to consider before requesting an appeals conference?;(13);[LO2] The IRS recently;completed an audit of Shea?s tax return and assessed $15,000 additional;tax. Shea requested an appeals;conference but was unable to settle the case at the conference. She is contemplating which trial court to;choose to hear her case. Provide her a;recommendation based on the following alternative facts.;a.;Shea resides in the 2nd;Circuit, and the 2nd Circuit has recently ruled against the position Shea is;litigating.;b.;The Federal Circuit Court of;Appeals has recently ruled in favor of Shea?s position.;c.;The issue being litigated;involves a question of fact. Shea has a;very appealing story to tell but little favorable case law to support her;position.;d.;The issue being litigated is;highly technical, and Shea believes strongly in her interpretation of the law.;e.;Shea is a local elected;official and would prefer to minimize any local publicity regarding the case.;(14);[LO3] 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? and why? How would your answer;change if Juanita were a Kentucky resident (6th Circuit)?;[LO3] Faith, a resident of Florida (11th Circuit) recently found a circuit;court case that is favorable to her research question. Which two circuits would she prefer to have;issued the opinion?(1);[LO3] Robert has found a;?favorable? authority directly on point for his tax question. If the authority is a court case, which court;would he prefer to have issued the opinion?;Which court would he least prefer to have issued the opinion?="msonormal">(1);[LO3] Jamareo has found a;?favorable? authority directly on point for his tax question. If the authority is an administrative;authority, which specific type of authority would he prefer to answer his;question? Which administrative authority;would he least prefer to answer his question?;(2);="msonormal">


Paper#38193 | Written in 18-Jul-2015

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