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Question;36. For state;income tax purposes, a majority of states allow a deduction for Federal income;taxes.;a. True;b. False;37. Some;states use their state income tax return as a means of collecting unpaid sales;and use taxes.;a. True;b. False;38. No state;has offered an income tax amnesty program more than once.;a. True;b. False;39. For;Federal income tax purposes, there never has been a general amnesty period.;a. True;b. False;c.;40. Under;state amnesty programs, all delinquent and unpaid income taxes are forgiven.;a. True;b. False;41. When a;state decouples from a Federal tax provision, it means that this provision will;not apply for state income tax purposes.;a. True;b. False;?;42. The;principal objective of the FUTA tax is to provide some measure of retirement;security.;a. True;b. False;43. Currently;the tax base for the Social Security component of the FICA is not limited to a;dollar amount.;a. True;b. False;44. A parent employs;his twin daughters, age 17, in his sole proprietorship. The daughters are not;subject to FICA coverage.;a. True;b. False;45. Unlike;FICA, FUTA requires that employers comply with state as well as Federal rules.;a. True;b. False;46. A major;advantage of a flat tax type of income tax is its simplicity.;a. True;b. False;47. The value;added tax (VAT) has not had wide acceptance in the international community.;a. True;b. False;?;48. If more;IRS audits are producing a greater number of no change results, this indicates;increased compliance on the part of taxpayers.;a. True;b. False;49. The amount;of a taxpayer?s itemized deductions will increase the chance of being audited;by the IRS.;a. True;b. False;50. In an;office audit, the audit by the IRS takes place at the office of the taxpayer.;a. True;b. False;51. The IRS;agent auditing the return will issue an RAR even if the taxpayer owes no;additional taxes.;a. True;b. False;52. If a;?special agent? becomes involved in the audit of a return, this indicates that;the IRS suspects that fraud is involved.;a. True;b. False;53. If a;taxpayer files early (i.e., before the due date of the return), the statute of;limitations on assessments begins on the date the return is filed.;a. True;b. False;?;54. For;omissions from gross income in excess of 25% of that reported, there is no;statute of limitations on additional income tax assessments by the IRS.;a. True;b. False;55. If an;income tax return is not filed by a taxpayer, there is no statute of;limitations on assessments of tax by the IRS.;a. True;b. False;56. If fraud;is involved, there is no time limit on the assessment of a deficiency by the;IRS.;a. True;b. False;57. The IRS is;required to redetermine the interest rate on underpayments and overpayments;once a year.;a. True;b. False;58. A calendar;year taxpayer files his 2013 Federal income tax return on March 5, 2014. The;return reflects an overpayment of $6,000, and the taxpayer requests a refund of;this amount. The refund is paid on May 16, 2014. The refund need not include;interest.;a. True;b. False;59. For;individual taxpayers, the interest rate for income tax refunds (overpayments);is the same as that applicable to assessments (underpayments).;a. True;b. False;?;60. During any;month in which both the failure to file penalty and the failure to pay penalty;apply, the failure to file penalty is increased by the amount of the failure to;pay penalty.;a. True;b. False;61. When;interest is charged on a deficiency, any part of a month counts as a full;month.;a. True;b. False;62. For the;negligence penalty to apply, the underpayment must be caused by intentional;disregard of rules and regulations without intent to defraud.;a. True;b. False;63. Upon audit;by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is;attributable to negligence. The 20% negligence penalty will apply to $25,000.;a. True;b. False;64. If the tax;deficiency is attributable to fraud, the negligence penalty will not be;imposed.;a. True;b. False;65. The civil;fraud penalty can entail large fines and possible incarceration.;a. True;b. False;?;66. Even;though a client refuses to correct an error on a past return, it may be;possible for a practitioner to continue to prepare returns for the client.;a. True;b. False;67. In;preparing an income tax return, the use of a client?s estimates is not permitted.;a. True;b. False;68. In;preparing a tax return, all questions on the return must be answered.;a. True;b. False;69. A CPA firm;in California sends many of its less complex tax returns to be prepared by a;group of accountants in India. If certain procedures are followed, this;outsourcing of tax return preparation is proper.;a. True;b. False;70. The;objective of pay-as-you-go (paygo) is to achieve revenue neutrality.;a. True;b. False

 

Paper#39446 | Written in 18-Jul-2015

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