Deck 16: Tax Fraud

Question 1

What is another name for property tax?

A) Use.
B) Excise.
C) Ad valorem.
D) Ed valorem.

Answer 1

C

Question 2

If a taxpayer is to be charged with committing tax fraud, the taxpayer must have committed a(n):

A) Affirmative indicator and have violated the law willingly.
B) Affirmative act and have violated the law either willingly or unwillingly.
C) Affirmative act or indicator and have violated the law willingly.
D) Affirmative act and have violated the law willingly.

Answer 2

D

Question 3

Which IRC mandates that persons obligated to assess, collect and remit taxes to the IRS must do so?

A) IRC § 7202.
B) IRC § 179.
C) IRC § 7206.
D) IRC § 7100.

Answer 3

A

Question 4

For ease of communication, if we were describing Title 26, Subtitle A, Chapter 1, Subchapter B, Part VI, § 179 we would simply referred to as:

A) IRC § 179.
B) Title 26, A/1/B/VI/ § 179.
C) Title 26A.
D) 179 IRC 26.

Question 5

What is the monetary definition of "substantial" in regards to the amount of money evaded to pay tax upon?

A) $100,000.
B) $250,000.
C) $1,000,000.
D) The IRS has not defined the monetary value associated with the word "substantial".

Question 6

For each count that a taxpayer is found guilty under IRC § 7201 which of the following is not a potential punishment?

A) Fines up to $250,000.
B) Imprisonment up to 5 years.
C) Cost of prosecution.
D) Community service.

Question 7

Which constitutional amendment laid the foundation for the IRS to be formed?

A) 14th.
B) 16th.
C) 18th.
D) 19th.

Question 8

The mission of the Criminal Investigation Division is to:

A) Encourage voluntary taxpayer compliance with the tax laws and to foster public confidence by means of effective enforcement of criminal statutes that apply to tax administration and financial crimes.
B) Encourage voluntary taxpayer compliance with the tax laws and foster a sense of confidence that the IRS will detect and severely punish those who do not comply with its tax administration.
C) Seek all law violators and ensure that their taxes, penalties and jail time are served to the fullest extent.
D) Seek all public information available on taxpayers in order to determine which ones are not in full compliance with IRC code.

Question 9

Sales and Use Taxes:

A) Are uniform across all states.
B) Are only applicable to luxury items.
C) Only apply to intrastate purchases.
D) Vary from state to state.

Question 10

What does the U.S. Corporate Tax applicable to?

A) Dividends distributed.
B) Gross Income of the Corporation.
C) Gross Income of the management.
D) Retained Earnings of the Corporation.

Question 11

Which of the following is a division of the IRS?

A) Wage and Investment.
B) Small Business/Self-Employed.
C) Large and Mid-sized Business.
D) All of the above.

Question 12

Which of the following is not a type of tax?

A) Individual.
B) Sales and Use.
C) Non-profit.
D) Corporate.

Question 13

What do the courts call objective manifestations of fraudulent intent?

A) Malice.
B) Foresight.
C) Badges.
D) Intent.

Question 14

Actions that provide evidence that a process was deliberately done to deceive, undermine, or conceal the true nature of events is referred to as:

A) Affirmative indications.
B) Positive indications.
C) Affirmative acts.
D) Criminal acts.

Question 15

The Internal Revenue Code is contained within which title of the U.S. Code?

A) 22nd.
B) 24th.
C) 26th.
D) 28th.

Question 16

Signs or symptoms of actions that may have been performed for the purpose of deceiving or concealing are referred to as:

A) Affirmative indications.
B) Positive indications.
C) Affirmative acts.
D) Criminal acts.

Question 17

Items that include the willful evasion of tax or the willful failure to pay a tax (income tax as well as other taxes such as estate, gift, and excise taxes), making false statements on any return that is to be filed with the federal government, or aiding in the preparation of fraudulent tax returns are all referred to as:

A) Tax evasion crimes.
B) IRC Code Violations.
C) Negligent Fraud.
D) Tax fraud.

Question 18

Which of the following is not a payroll tax?

A) FICa.
B) OASDI.
C) Self-Employment.
D) Use.

Question 19

What is the primary difference between CPA's and Enrolled Agents?

A) Enrolled Agents are the only ones allowed to represent taxpayers in front of the IRS.
B) Enrolled Agents generally know more about GAAP than CPAs.
C) Enrolled Agents pass a governmentally controlled national exam whereas CPAs pass a non-governmental exam applicable to their state.
D) CPA's must continue their education whereas Enrolled Agents do not.

Question 20

Which department of the U.S. Government does the IRS fall under?

A) Homeland Security.
B) Defense.
C) Treasury.
D) Secretary of State.

Question 21

There are quite a few statutory arguments including the assertion that wages are not income and that the income tax does not apply to citizens who live in area other than the District of Columbia and territories such as Puerto Rico because the definition contained in the Internal Revenue Code does not include states.

Question 22

Which of the following is punishable under IRC § 7203?

A) Willful failure to make (i.e., file) a return.
B) Willful failure to supply information.
C) Willful failure to pay tax and estimated tax.
D) All of the above.

Question 23

There are typically more civil fraud convictions than criminal fraud convictions because criminal cases can require more effort on the part of the government due to the higher burden of proof that the government must bear in criminal cases (beyond a reasonable doubt).

Question 24

The type of analysis that is based on the expected receipt of cash by the entity against which fraud is suspected is called:

A) Point of payment analysis.
B) Point of sales analysis.
C) Point of receipt analysis.
D) Point of credit analysis.

Question 25

Accountants, enrolled agents, tax preparers, and attorneys are those who practice tax in various capacities.

Question 26

According to 18 USC § 2, any person who commits an offense against the IRS statutes and codes has also committed a crime against the _________ and will be punished as a principle.

A) United States.
B) U.S. District Court.
C) Criminal Code of the United Stated.
D) All of the above.

Question 27

Tax protestors can be divided into two groups: (1) legitimate and; (2) illegitimate.

Question 28

The argument that income tax is a direct tax and should be apportioned to the states is a true argument and is supported by the sixteenth amendment.

Question 29

The last major revision of the internal revenue code was done by congress in 1986.

Question 30

Some tax protestors argue that the IRS is a private corporation in Delaware or an agency of the Puerto Rican government.

Question 31

Under IRC § 7212(a), what does the government have to prove?

A) That the offender intimidated or impeded.
B) That the victim was intimidated or impeded.
C) That the offender intended upon impeding or intimidating.
D) All of the above.

Question 32

According to IRC § 7201, any person who willfully attempts to evade or defeat any tax imposed by the Internal Revenue Code will be guilty of a felony.

Question 33

What is the statute of limitations for tax fraud?

A) 5 or 10 years, depending upon the type of fraud.
B) 4 or 8 years, depending upon the type of fraud.
C) 3 or 6 years, depending upon the type of fraud.
D) 2 or 4 years, depending upon the type of fraud.

Question 34

If the IRS brings charges under both violations of IRC § 7201 and IRC § 7203, and the jury finds them not guilty for IRC § 7201, what happens with the charges under IRC § 7203?

A) They are dismissed.
B) They can be brought as subsequent charges in a future suit.
C) The defendant can still be found guilty under IRC § 7203.
D) The defendant can bring a counter suit against the IRS.

Question 35

How are carryback or carryforward treated when calculating penalties for civil fraud?

A) They are included as if they were calculated under normal circumstances.
B) They are deducted at twice the rate that they were originally added into the calculations.
C) They cannot be used when calculating civil penalties.
D) It is up to the courts to pass judgment as to their treatment.

Question 36

Roughly two thirds of the employees of the Criminal Investigations Division are special agents, elite tax financial investigators who are duly sworn law enforcement officers.

Question 37

If a taxpayer fails to file their taxes, what is the penalty?

A) Fifteen percent per month unless the failure to file is fraudulent in which case the penalty is twenty percent per month.
B) Five percent per month unless the failure to file is fraudulent in which case the penalty is fifteen percent per month.
C) .05% per month unless it is proven to be fraudulent, in which case the penalty is .50% per month.
D) $25 flat fee penalty per month.

Question 38

What can be the first step in violation of IRC § 7205(a)?

A) An unsigned tax return.
B) A false W-4 form.
C) A false 1099 form.
D) Knowingly claiming more hours than worked on a time card.

Question 39

For self-employed individuals, a 25.3% self-employment tax is imposed on net self-employment income.

Question 40

What are the penalties under 18 USC § 1001 for any person who willfully falsifies, conceals, or covers up information or who makes any materially false, fictitious, or fraudulent statement, representation, or makes any document that contains any materially false, fictitious, or fraudulent statement or entry?

A) $25,000 for individuals and $50,000 for corporations.
B) $250,000 for individuals and $500,000 for corporations.
C) $25,000 for corporations and $50,000 for individuals.
D) $250,000 for corporations and $500,000 for individuals.

Question 41

Can the Fifth Amendment be invoked by a taxpayer when it comes to willful failure to file return, supply information, or pay tax; why or why not?

Question 42

What are at least three methods of proof that the IRS may employ.

Question 43

Explain how the Internal Revenue Code treats force and intimidation in regards to interference with tax laws.

Question 44

What kinds of innocent errors can taxpayers make and not be liable for the civil fraud penalty?

Question 45

What are the three elements of IRC § 7201 that must be proven before a charge under this section is sustained?

Question 46

Describe the evolution of the internal revenue code.

Question 47

Describe the formula specified for calculating an income tax underpayment and what each component of it means.

Question 48

Compare and contrast Affirmative indications and Affirmative acts.

Question 49

Who does the IRS recognize as tax practitioners and what are their continuing education requirements?

Question 50

What does the IRS recognize as taxable individual income and how can it be adjusted?