IRS Tax Compliance and Audit Procedures

Question 1

Which IRS notice informs a taxpayer that their return has been selected for examination?

Accepted Answer

Letter 2205

Answer

CP2000

Answer

CP503

Answer

Letter 531

Question 2

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

Accepted Answer

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

Answer

2 years from the due date

Answer

5 years from the filing date

Answer

6 years from the due date

Question 3

When a taxpayer omits more than 25% of gross income from their return, what is the statute of limitations for IRS assessment?

Accepted Answer

6 years

Answer

3 years

Answer

4 years

Answer

10 years

Question 4

Which 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

Random audit

Question 5

What IRS form is used by a taxpayer to formally agree to extend the statute of limitations for assessment?

Accepted Answer

Form 872

Answer

Form 906

Answer

Form 2848

Answer

Form 1127

Question 6

During an IRS field audit, who typically conducts the examination at the taxpayer's place of business?

Accepted Answer

Revenue Agent

Answer

Revenue Officer

Answer

Special Agent

Answer

Tax Compliance Officer

Question 7

What is the primary purpose of an IRS CP2000 notice?

Accepted Answer

To propose changes to a return based on information received from third parties

Answer

To notify a taxpayer of a balance due from a previous audit

Answer

To inform a taxpayer their return was accepted as filed

Answer

To request the taxpayer appear for an in-person interview