CTRS Tax Law and Regulations 5

Question 1

Under IRC Section 6511, a taxpayer generally has how long to file a claim for refund after a tax return is filed or the tax is paid, whichever is later?

Accepted Answer

3 years

Answer

IRC Section 6511 provides a 3-year lookback window from the date the return is filed, or 2 years from the date of payment, whichever period expires later, to claim a refund.

Question 2

A 'Penalty Abatement for First Time Abate' (FTA) is typically available for which of the following penalties?

Accepted Answer

Failure to file, failure to pay, and failure to deposit penalties

Answer

The IRS First Time Abate administrative waiver is available for failure-to-file (FTF), failure-to-pay (FTP), and failure-to-deposit (FTD) penalties when the taxpayer has a clean compliance history.

Question 3

Which IRS document provides the statutory basis for the IRS to summon records, testimony, or information from third parties during a tax examination?

Accepted Answer

IRC Section 7602

Answer

IRC Section 7602 authorizes the IRS to issue a summons to examine books and records and to take testimony in connection with a tax inquiry or investigation.

Question 4

A taxpayer placed in 'Currently Not Collectible' (CNC) status should expect the IRS to:

Accepted Answer

Review the account annually and resume collection if financial condition improves

Answer

CNC status temporarily suspends collection activity, but the IRS issues annual reviews (via systemic income checks) and will resume collection if the taxpayer's financial situation improves.

Question 5

Under the 'responsible person' analysis for the Trust Fund Recovery Penalty, which factor is most determinative of 'willfulness'?

Accepted Answer

The responsible person knew payroll taxes were unpaid and used funds to pay other creditors

Answer

Willfulness is established when a responsible person knew about unpaid trust fund taxes and intentionally disregarded the obligation by paying other creditors instead of the IRS.

(CTRS) Certified Tax Resolution Specialist Practice Test

(CTRS) Certified Tax Resolution Specialist Practice Test

CTRS Tax Law and Regulations 5