FREE CTC Tax Law & Compliance Questions and Answers

Question 1

Which U.S. government agency is responsible for tax collection and enforcement?

Accepted Answer

IRS

Answer

FBI

Answer

Department of Justice

Answer

SEC

Question 2

What is the deadline for filing individual federal tax returns in the U.S.?

Accepted Answer

April 15

Answer

March 1

Answer

May 31

Answer

June 15

Question 3

Which form is used to report self-employment income?

Accepted Answer

Schedule C

Answer

Form 1040EZ

Answer

Form W-2

Answer

Form 1099-INT

Question 4

What is the consequence of willfully failing to file a tax return?

Accepted Answer

Possible criminal charges

Answer

A small penalty only

Answer

No consequence

Answer

Extension granted automatically

Question 5

What is considered taxable income?

Accepted Answer

Most earned and unearned income

Answer

Only cash income

Answer

Only wages

Answer

Gifts from family

Question 6

Which form reports interest income?

Accepted Answer

Form 1099-INT

Answer

Form W-2

Answer

Schedule SE

Answer

Form 8862

Question 7

What is the purpose of tax withholding from employee paychecks?

Accepted Answer

To prepay tax liability

Answer

To penalize employees

Answer

To save employer costs

Answer

To fund Social Security only

Question 8

What is a common reason for a tax return audit?

Accepted Answer

Inconsistent or unusual income

Answer

Filing early

Answer

Too many dependents

Answer

Using a tax preparer

Question 9

What is the standard penalty for failing to file a tax return on time?

Accepted Answer

5% per month up to 25%

Answer

2% per month

Answer

No penalty

Answer

Flat $100 fee