CTA Tax Compliance and Procedure 2

Question 1

Which IRS collection tool allows the IRS to seize a taxpayer's wages, bank accounts, or other financial assets to satisfy a tax debt?

Accepted Answer

Tax Levy

Answer

Federal Tax Lien

Answer

Notice of Intent to Levy

Answer

Certificate of Discharge

Question 2

What is the minimum penalty for failure to file a tax return that is more than 60 days late (for returns due after 2015)?

Accepted Answer

The lesser of $485 (indexed for inflation) or 100% of the tax owed

Answer

The lesser of $100 or the amount of tax owed

Answer

The lesser of $1,000 or 5% of the tax owed

Answer

The lesser of $5,000 or 25% of the tax owed

Question 3

An Offer in Compromise (OIC) based on 'Doubt as to Collectibility' is appropriate when:

Accepted Answer

The taxpayer's assets and future income are insufficient to fully pay the liability

Answer

The taxpayer believes they do not actually owe the tax assessed

Answer

There was an error or injustice in the assessment of the tax

Answer

The taxpayer wants to challenge the IRS examination findings

Question 4

Under the IRS installment agreement provisions, what type of agreement allows taxpayers who owe $50,000 or less to establish a payment plan without providing detailed financial information?

Accepted Answer

Streamlined Installment Agreement

Answer

Partial Pay Installment Agreement (PPIA)

Answer

In-Business Trust Fund Express Agreement

Answer

Guaranteed Installment Agreement

Question 5

What IRS form is used to authorize a tax professional to represent a taxpayer before the IRS?

Accepted Answer

Form 2848 (Power of Attorney and Declaration of Representative)

Answer

Form 8821 (Tax Information Authorization)

Answer

Form 1099-MISC

Answer

Form 4506 (Request for Copy of Tax Return)

Question 6

What is the accuracy-related penalty percentage imposed under IRC Section 6662 for a substantial understatement of income tax or negligence?

Accepted Answer

20% of the underpayment attributable to the violation

Answer

10% of the underpayment attributable to the violation

Answer

25% of the underpayment attributable to the violation

Answer

75% of the underpayment attributable to the violation

Question 7

Which IRS document formally closes an examination at the field level and summarizes proposed adjustments, allowing the taxpayer to agree or disagree?

Accepted Answer

Revenue Agent's Report (RAR) / Form 4549

Answer

Notice of Deficiency

Answer

CP2000 Notice

Answer

Letter 11 (Final Notice of Intent to Levy)