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IRS Procedures, Audits & Controversy Resolution Flashcards

7 cards from real CTP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 IRS Procedures, Audits & Controversy Resolution flashcards as text

  1. What is the primary function of the IRS Independent Office of Appeals?

    Answer: To provide an impartial administrative forum for resolving tax disputes without litigation

    The IRS Office of Appeals offers taxpayers a way to resolve disputes with the IRS through an impartial administrative process, avoiding the time and expense of court litigation.

  2. Under what circumstances can a taxpayer request a Collection Due Process (CDP) hearing?

    Answer: Only after the IRS files a Notice of Federal Tax Lien or issues a levy notice

    A CDP hearing may be requested within 30 days of a Notice of Federal Tax Lien filing or within 30 days of a final levy notice, giving taxpayers due process rights before collection action.

  3. An Offer in Compromise (OIC) allows a taxpayer to settle a tax liability for less than the full amount owed. Which of the following is NOT a valid basis for an OIC?

    Answer: Disagreement with the tax rate applied

    Valid OIC bases are doubt as to liability, doubt as to collectibility, and effective tax administration; a mere disagreement with statutory tax rates is not a qualifying basis for an OIC.

  4. What is the legal distinction between a federal tax lien and a federal tax levy?

    Answer: A lien creates a legal claim against property; a levy is the actual seizure of property

    A federal tax lien is a legal claim the government asserts against a taxpayer's property as security for a tax debt, while a levy is the actual taking (seizure) of property to satisfy the debt.

  5. How long does the IRS generally have to collect taxes after they have been assessed?

    Answer: 10 years

    Under IRC §6502, the IRS has 10 years from the date of assessment to collect taxes through levy or court proceedings.

  6. What is an installment agreement, and who has the right to request one from the IRS?

    Answer: A voluntary payment arrangement where taxpayers pay their liability in monthly installments

    An installment agreement is a voluntary arrangement between the taxpayer and the IRS that allows the taxpayer to pay the full tax liability in monthly installments over time rather than in a lump sum.

  7. Currently Not Collectible (CNC) status with the IRS means:

    Answer: The IRS temporarily suspends collection efforts because the taxpayer cannot pay without significant hardship

    CNC status is a temporary hold on IRS collection activity when the taxpayer's financial situation shows that collecting the debt would cause economic hardship; the debt still exists and interest continues to accrue.