CTP IRS Procedures, Audits & Controversy Resolution

Question 1

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

Accepted Answer

3 years from the due date or filing date, whichever is later

Answer

2 years from the date the return was filed

Answer

5 years from the date the return was filed

Answer

10 years from the date the tax was assessed

Question 2

Which type of IRS audit is conducted entirely through written correspondence without requiring the taxpayer to appear in person?

Accepted Answer

Correspondence audit

Answer

Field audit

Answer

Office audit

Answer

TCMP audit

Question 3

A Statutory Notice of Deficiency (90-day letter) issued by the IRS gives the taxpayer the right to do what before paying the disputed tax?

Accepted Answer

Petition the U.S. Tax Court

Answer

Appeal directly to the Supreme Court

Answer

Request a congressional hearing

Answer

File an amended return to nullify the notice

Question 4

When the IRS suspects that a taxpayer has omitted more than 25% of gross income from a return, the statute of limitations for assessment is extended to:

Accepted Answer

6 years

Answer

4 years

Answer

5 years

Answer

10 years

Question 5

Which IRS audit type is the most comprehensive and typically involves an IRS agent visiting the taxpayer's home or place of business?

Accepted Answer

Field audit

Answer

Correspondence audit

Answer

Office audit

Answer

Random audit

Question 6

What IRS document authorizes a revenue officer to examine a taxpayer's books and records during an examination?

Accepted Answer

Form 4564 (Information Document Request)

Answer

Form 870 (Waiver of Restrictions on Assessment)

Answer

Form 2848 (Power of Attorney)

Answer

Letter 531 (Notice of Deficiency)

Question 7

A taxpayer who disagrees with IRS audit findings can sign Form 870 to waive the restrictions on assessment. What is the key consequence of signing this form?

Accepted Answer

It allows the IRS to immediately assess the tax but preserves the right to file a refund claim

Answer

It stops all interest from accruing on the deficiency

Answer

It allows the taxpayer to petition the Tax Court

Answer

It extends the statute of limitations by one additional year