TCS Tax Credit Compliance 5

Question 1

Which form combines various business credits into a single general business credit?

Accepted Answer

Form 3800

Answer

Form 3800 is the General Business Credit form that aggregates eligible business credits.

Question 2

How many years may unused general business credits generally be carried forward?

Accepted Answer

20 years

Answer

Unused general business credits carry back 1 year and forward 20 years.

Question 3

Which form must a paid preparer complete to document due diligence for an Earned Income Tax Credit claim?

Accepted Answer

Form 8867

Answer

Form 8867, Paid Preparer's Due Diligence Checklist, documents the preparer's due diligence.

Question 4

For how long must a preparer generally retain Form 8867 and related due diligence records?

Accepted Answer

3 years

Answer

Preparers must keep due diligence records for three years after the return is filed or the due date.

Question 5

What penalty may apply to a taxpayer who files a claim for refund or credit with an excessive amount without reasonable cause?

Accepted Answer

A 20% penalty under Section 6676

Answer

Section 6676 imposes a 20% penalty on the excessive portion of a refund claim lacking reasonable cause.

TCS - Tax Credit Specialist Practice Test