Podcast
Questions and Answers
What is the due date for filing an individual tax return?
What is the due date for filing an individual tax return?
Which of the following entities must file a tax return if gross income exceeds $600?
Which of the following entities must file a tax return if gross income exceeds $600?
What happens if a taxpayer does not file a tax return or pay a tax due by the due date?
What happens if a taxpayer does not file a tax return or pay a tax due by the due date?
How long does a taxpayer have to file an amended tax return if they misreport income that does not exceed 25% of gross income?
How long does a taxpayer have to file an amended tax return if they misreport income that does not exceed 25% of gross income?
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What is the penalty for failing to file a tax return that has a balance due?
What is the penalty for failing to file a tax return that has a balance due?
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Which tax status results in no statute of limitations for the taxpayer?
Which tax status results in no statute of limitations for the taxpayer?
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What allows a taxpayer to file a tax return six months later than the original due date?
What allows a taxpayer to file a tax return six months later than the original due date?
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Which program checks all tax returns for mathematical and tax calculation errors?
Which program checks all tax returns for mathematical and tax calculation errors?
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What is the highest authoritative weight when interpreting the Internal Revenue Code (IRC)?
What is the highest authoritative weight when interpreting the Internal Revenue Code (IRC)?
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Which of the following is NOT a step in the tax research process?
Which of the following is NOT a step in the tax research process?
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Which type of Treasury Regulation has the lowest authority?
Which type of Treasury Regulation has the lowest authority?
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Which court has the highest judicial authority when interpreting tax law?
Which court has the highest judicial authority when interpreting tax law?
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What type of facts relates to events that have not yet occurred?
What type of facts relates to events that have not yet occurred?
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Which of the following documents would hold higher authoritative weight than revenue rulings?
Which of the following documents would hold higher authoritative weight than revenue rulings?
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What consequence does the IRC impose on tax practitioners for unsupported positions?
What consequence does the IRC impose on tax practitioners for unsupported positions?
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Which organization’s Code of Professional Conduct must tax practitioners adhere to?
Which organization’s Code of Professional Conduct must tax practitioners adhere to?
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What role does the House of Representatives play in the legislative process of enacting a tax law?
What role does the House of Representatives play in the legislative process of enacting a tax law?
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Which of the following is NOT considered a primary authority in tax law?
Which of the following is NOT considered a primary authority in tax law?
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What is the function of a Citator in tax research?
What is the function of a Citator in tax research?
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Which court has the ultimate authority to interpret the Internal Revenue Code?
Which court has the ultimate authority to interpret the Internal Revenue Code?
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Which of the following statements is accurate regarding the two types of tax services used in tax research?
Which of the following statements is accurate regarding the two types of tax services used in tax research?
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What is the purpose of the Joint Conference Committee in the legislative process?
What is the purpose of the Joint Conference Committee in the legislative process?
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What is meant by the judicial doctrine of stare decisis?
What is meant by the judicial doctrine of stare decisis?
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What type of source does the IRC Code of 1986 represent?
What type of source does the IRC Code of 1986 represent?
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What is the purpose of the Information Matching Program?
What is the purpose of the Information Matching Program?
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Which type of audit is considered the most common?
Which type of audit is considered the most common?
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What does the 30-day letter allow a taxpayer to do?
What does the 30-day letter allow a taxpayer to do?
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What is the function of the Discriminant Function System?
What is the function of the Discriminant Function System?
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In which court does a losing party appeal a tax case?
In which court does a losing party appeal a tax case?
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What should a taxpayer do after receiving a 90-day letter if they disagree with the audit assessment?
What should a taxpayer do after receiving a 90-day letter if they disagree with the audit assessment?
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What types of cases does the U.S. Supreme Court typically agree to hear?
What types of cases does the U.S. Supreme Court typically agree to hear?
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Which court has a small claims division for tax liabilities of $50,000 or less?
Which court has a small claims division for tax liabilities of $50,000 or less?
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Study Notes
Corporate and Individual Tax Filing
- All corporations are required to file an annual tax return, regardless of income level.
- Individual taxpayer filing requirements depend on age, gross income, and filing status.
- Gross income filing thresholds are determined by summing standard and additional deductions.
- Self-employed individuals face lower gross income thresholds for filing compared to the general requirements.
Important Filing Dates and Extensions
- Calendar-year partnership income returns are due by March 15.
- Estates and trusts must file a return if their gross income exceeds $600.
- Taxpayers can receive a six-month extension to file a return, but tax payments are still due on the original date.
Penalties for Non-Compliance
- Failure to file a tax return by the due date incurs interest and penalties on owed taxes.
- The penalty for not filing a return with a balance due is 5% of the owed tax per month, capped at 25%.
Statute of Limitations
- Taxpayers have three years to amend returns if income misreported is less than or equal to 25% of gross income.
- Six years are allowed if gross income omissions exceed 25%.
- No statute of limitations applies in cases of fraud or if a return is not filed.
Audit Processes
- The Document Perfection Program checks all tax returns for errors.
- Information matching programs reconcile tax return data with third-party reports.
- Types of audits:
- Correspondence examinations are common.
- Office examinations occur at IRS offices.
- Field examinations are extensive, conducted at the taxpayer's location.
Appeals and Court Processes
- Taxpayers can request an appeals conference after receiving a 30-day letter regarding IRS audit disagreements.
- A 90-day letter allows for petitioning the U.S. Tax Court if a taxpayer disagrees with an IRS assessment.
- The U.S. Supreme Court selectively hears significant tax cases with broad implications.
Tax Authority and Legal Framework
- Primary authorities include official sources like statutes, regulations, and judicial decisions from government branches.
- Secondary authorities explain tax laws but do not include court rulings.
- The U.S. House of Representatives typically initiates tax bills, which are then reviewed and voted on by both houses.
- Treasury regulations are authoritative but not legislative sources.
Tax Research Tools
- A citator assists in checking the status of various authorities, including case history and IRS rulings.
- Tax professionals utilize annotated tax services and topical services for research.
- Five steps in the tax research process: Understanding facts, identifying issues, locating authorities, analyzing authorities, and documenting findings.
Professional Conduct and Ethical Standards
- Tax practitioners must adhere to multiple codes of conduct, including AICPA's Code and IRS Circular 230.
- The IRC mandates penalties for tax practitioners representing unsupported positions.
Special Rules and Jurisdiction
- The Golsen Rule states that the U.S. Tax Court follows circuit rulings relevant to a case.
- Jurisdiction for appeals depends on the taxpayer’s residence based on circuit court governance.
Final Notes on Regulations and Authoritative Weight
- Regulations from the Treasury Department carry high authoritative weight, with the Internal Revenue Code at the top.
- Internal Revenue Code incorporates new tax laws into designated sections as appropriate.
- Judicial doctrine of stare decisis favors consistency with past court rulings.
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