Tax Strategies Flashcards

Which IRS form does a taxpayer, or someone with the taxpayer's authorization, use to request an exact copy of a previously filed tax return?

Answer: Form 4506

Form 4506 requests a photocopy of a filed return, while Form 4506-T requests a transcript.

An informant tells an investigator about large-scale tax underpayment by a business. Which form submits a claim to the IRS Whistleblower Office?

Answer: Form 211

Form 211 is the Application for Award for Original Information filed with the IRS Whistleblower Office.

Under IRC § 7623(b), what award range can a whistleblower receive when the proceeds collected exceed $2 million?

Answer: 15% to 30% of collected proceeds

Mandatory awards under § 7623(b) range from 15% to 30% of the proceeds the IRS collects.

Which IRS return of a tax-exempt organization is publicly available and can show officer compensation and related-party transactions?

Answer: Form 990

Exempt organizations must make Form 990 available to the public, which makes it a useful investigative source.

A spouse claims they did not know about understated tax on a joint return. Which IRS form requests innocent spouse relief?

Answer: Form 8857

Form 8857 is the Request for Innocent Spouse Relief from joint and several liability.

Under Cheek v. United States (1991), what can negate the willfulness element in a criminal tax case?

Answer: A good-faith belief, even an unreasonable one, that the law did not require the conduct

Cheek held that a genuine good-faith misunderstanding of the law negates willfulness, but constitutional disagreements do not.

A subject sold one investment property and bought another of like kind without recognizing gain. Which tax provision did they most likely use?

Answer: IRC § 1031 like-kind exchange

Section 1031 defers gain when real property held for business or investment is exchanged for like-kind property.