CTC CTC Tax Controversy & Audit Procedures

Question 1

What is the standard statute of limitations for the IRS to assess additional tax on a timely filed return?

Accepted Answer

3 years from the later of the due date or filing date

Answer

2 years from the filing date

Answer

5 years from the filing date

Answer

6 years from the filing date

Question 2

When does the IRS have 6 years (instead of 3) to assess tax under the extended statute of limitations?

Accepted Answer

When the taxpayer omits more than 25% of gross income from the return

Answer

When the taxpayer files an amended return

Answer

When any deduction is overstated by more than $10,000

Answer

When the taxpayer changes accounting methods

Question 3

What type of IRS audit is conducted entirely by mail, without requiring the taxpayer to appear in person?

Accepted Answer

Correspondence audit

Answer

Field audit

Answer

Office audit

Answer

Desk audit

Question 4

What is a 'Notice of Deficiency' (90-day letter) and what right does it give the taxpayer?

Accepted Answer

A formal IRS notice that gives the taxpayer 90 days to petition the Tax Court before assessment

Answer

A notice requiring immediate payment of taxes owed

Answer

A letter offering an installment agreement for tax liabilities

Answer

A notice of a scheduled field audit

Question 5

Which IRS office handles appeals of examination findings before a taxpayer proceeds to court?

Accepted Answer

IRS Independent Office of Appeals

Answer

IRS Criminal Investigation Division

Answer

IRS Taxpayer Advocate Service

Answer

IRS Large Business & International Division

Question 6

What form does a taxpayer file to request an audit reconsideration after an assessment has been made?

Accepted Answer

Form 12661

Answer

Form 1040X

Answer

Form 656

Answer

Form 433-A