IRS Tax Compliance and Audit Procedures 3

Question 1

How long does the IRS generally have to collect tax after assessment?

Accepted Answer

10 years

Answer

3 years

Answer

5 years

Answer

15 years

Question 2

Which IRS form does a taxpayer use to request an installment agreement to pay a tax liability over time?

Accepted Answer

Form 9465

Answer

Form 433-A

Answer

Form 656

Answer

Form 12153

Question 3

What is the fraud penalty percentage applied to the portion of underpayment attributable to civil fraud?

Accepted Answer

75%

Answer

20%

Answer

50%

Answer

100%

Question 4

A taxpayer who cannot pay their full tax liability and has no prospect of doing so may qualify for which IRS program?

Accepted Answer

Offer in Compromise

Answer

Penalty Abatement

Answer

Innocent Spouse Relief

Answer

Trust Fund Recovery Penalty waiver

Question 5

Which basis does the IRS use to reconstruct income when a taxpayer has no books or records during an audit?

Accepted Answer

Indirect methods such as bank deposits or net worth analysis

Answer

Standard deduction method

Answer

Prior year averaging

Answer

Industry standard benchmarking only

Question 6

What is the Trust Fund Recovery Penalty (TFRP) based on?

Accepted Answer

100% of the unpaid trust fund taxes

Answer

50% of the unpaid trust fund taxes

Answer

20% of total payroll taxes owed

Answer

The failure-to-deposit penalty rate of 10%

Question 7

Which IRS notice is typically the first contact in an automated underreporter (AUR) case and proposes a change to a tax return?

Accepted Answer

CP2501

Answer

CP2000

Answer

Letter 2030

Answer

CP75