Question 1

A written revenue agent's report (RAR)is prepared by the IRS agent and is given tothe taxpayer:
A)before the commencement of the examination
B)upon conclusion of the examination
C)during the examination
D)none of these are correct

Accepted Answer

The Revenue Agent's Report (RAR) is provided to the taxpayer upon the conclusion of the examination, summarizing the findings and adjustments proposed by the IRS agent.

Question 2

If a return is identified as including an unallowable item, the IRS:
A)computes the seemingly necessary adjustment in taxes and notifies the taxpayer by mail
B)sends a formal notice of deficiency tothe taxpayer
C)considers the contact that it makes with a taxpayer under this circumstance tobe an examination
D)cancels the return and asks the taxpayer tofile his return again

Accepted Answer

The IRS computes the necessary adjustment in taxes and notifies the taxpayer by mail when a return includes an unallowable item. This is part of their process to correct errors without initiating a formal examination.

Question 3

When a taxpayer does not agree with the IRS agent's proposed adjustments a:
A)30-day letter is issued
B)RAR is issued
C)10-day notice is issued
D)21-day notice is issued

Accepted Answer

A 30-day letter is issued to the taxpayer, giving them 30 days to either agree with the proposed adjustments or file an appeal with the IRS Office of Appeals.

Question 4

The procedure used tomatch the information recorded on a return with corresponding data received from third parties is referred toas the:
A)Information Document Reconciliation Program
B)Information Document Review Program
C)Information Document Check Program
D)none of these are correct

Accepted Answer

The procedure described does not match any of the given options exactly, suggesting that the correct terminology or program name is not listed among the choices provided.

Question 5

Signed intolaw in 1996, it guarantees taxpayers various rights torepresentation before the IRS. What is it called?
A)the Constitution
B)the Sixteenth Amendment
C)the Taxpayer Bill of Rights
D)the Taxpayer Advocate

Accepted Answer

The Taxpayer Bill of Rights was signed into law in 1996 to ensure that taxpayers have specific rights in their dealings with the IRS, including the right to professional and courteous treatment, the right to privacy and confidentiality, and the right to representation, among others.

Question 6

The program that is designed tofurnish the IRS with statistics concerning the type and number of errors that are made on a representative sample of individual income tax returns is the:
A)Unallowable Items Program
B)Mathematical/clerical Error Program
C)National Research Program
D)Discriminant Function Program

Accepted Answer

The National Research Program (NRP) is designed to provide the IRS with statistics on the type and number of errors made on individual income tax returns. This program involves detailed audits of a representative sample of returns to assess compliance and understand where errors are most commonly made.

Question 7

Towhom does the Chief Counsel of the Internal Revenue Service report?
A)Commissioner of the Internal Revenue Service
B)Secretary of the Treasury
C)Regional Council in National Office
D)Attorney General

Accepted Answer

The Chief Counsel of the Internal Revenue Service reports directly to the Commissioner of the Internal Revenue Service. This position provides legal guidance and services to the IRS and its officials.

Question 8

An office examination is scheduled when a selected return for examination:
A)belongs toa taxpayer whopreviously was found guilty of manipulating a return
B)belongs toa taxpayer whoresides near the IRS local office
C)requires a mere verification of record-keeping
D)involves one or more issues that will require some analysis and the exercise of the IRS personnel's judgment

Accepted Answer

An office examination is typically scheduled for returns that involve issues needing analysis and the exercise of judgment by IRS personnel, as this allows for a more thorough review and discussion of the matters at hand.

Question 9

Which of the following examinations involves complex issues that require more advanced knowledge of the internal revenue laws and accounting skills?
A)correspondence examination
B)field examination
C)office examination
D)arithmetical error examination

Accepted Answer

Field examinations are comprehensive tax audits conducted at the taxpayer's place of business or where the tax records are kept. They involve complex issues requiring advanced knowledge of tax laws and accounting skills, as auditors review extensive documentation and may need to understand intricate business operations.

Question 10

A Form 911 is filed by the taxpayer as a request for which of the following?
A)National Research Program
B)Appeals Conference
C)Tax Court Hearing
D)Taxpayer Advocate Service Assistance

Accepted Answer

Form 911 is filed by taxpayers to request assistance from the Taxpayer Advocate Service when they are experiencing financial difficulties or need help resolving tax problems that they haven't been able to resolve through normal IRS channels.

Question 11

The Commissioner of the Internal Revenue Service (IRS)is appointed by the:
A)President of the United States
B)Secretary of the Treasury
C)Senate
D)Congress

Accepted Answer

The Commissioner of the Internal Revenue Service (IRS) is appointed by the President of the United States, reflecting the executive branch's control over federal tax administration.

Question 12

How much time from the date of issue of a 30-day letter does a taxpayer have torequest a conference with an appeals officer?
A)30 days
B)90 days
C)10 days
D)21 days

Accepted Answer

A 30-day letter gives the taxpayer 30 days from the date of its issuance to request a conference with an appeals officer.

Question 13

The Taxpayer Assistance Order (TAO)is issued by the:
A)Secretary of Treasury
B)Chief Counsel
C)National Taxpayer Advocate
D)Commissioner of IRS

Accepted Answer

The National Taxpayer Advocate, who leads the Taxpayer Advocate Service (an independent organization within the IRS), has the authority to issue a Taxpayer Assistance Order (TAO) to provide relief to taxpayers experiencing significant hardship due to the manner in which the internal revenue laws are being administered.

Question 14

The IRS:
A)facilitates the processing of tax returns
B)enforces the internal revenue laws of the United States
C)is a bureau within the U.S. Department of Finance
D)all of these are correct

Accepted Answer

The answer of The IRS:
A)facilitates the processing of tax returns
B)enforces...

Question 15

A statutory notice of deficiency is alsoknown as a:
A)30-day letter
B)10-day letter
C)90-day letter
D)21-day letter

Accepted Answer

A statutory notice of deficiency is also known as a 90-day letter. This notice gives the taxpayer 90 days to file a petition with the Tax Court to challenge the IRS's determination of deficiency before it becomes final.

Question 16

In selecting returns for examination, the primary goal of the IRS is toreview only those returns that:
A)belong totaxpayers whowere found guilty previously
B)will result in a satisfactory increase in the tax liability
C)have been filed for the first time
D)contain mathematical/clerical errors

Accepted Answer

The primary goal of the IRS in selecting returns for examination is to identify those that are most likely to result in a significant adjustment to the tax liability, ensuring efficient use of resources and maximizing tax compliance.

Question 17

The National Taxpayer Advocate:
A)represents the IRS in Tax Court cases
B)administers a taxpayer-intervention system
C)assists the IRS in preparing proposed legislation, treaties, regulations, and executive orders
D)prepares IRS rulings and other written determinations

Accepted Answer

The National Taxpayer Advocate leads the Taxpayer Advocate Service, an independent organization within the IRS, which helps taxpayers resolve problems with the IRS and recommends changes to prevent future problems, essentially administering a taxpayer-intervention system.

Question 18

In case of underpayment of taxes, if the deficiency is not paid in a timely fashion, interest is imposed on the unpaid amount for a period that begins on the date of:
A)filing the return and ends on the date of payment or the last working day of the respective year, whichever is later
B)filing the return and ends on the date of payment
C)the notice and demand and ends on the date of payment
D)the notice and demand and ends on the date when the taxpayer receives the notice

Accepted Answer

Interest on underpaid taxes typically starts accruing from the date of the notice and demand for payment by the tax authority and continues until the date the taxpayer pays the amount due.

Question 19

What is the formula that assigns numeric weights tocertain (undisclosed by the IRS)return items, generating a composite score for the return?
A)selection of returns formula
B)unallowable items formula
C)discriminant function formula (DIF)
D)mathematical errors formula

Accepted Answer

The discriminant function formula (DIF) is used by the IRS to assign numeric weights to certain return items, generating a composite score for the return to help in identifying which returns are most likely to be non-compliant.

Question 20

The highest ranking legal adviser of the IRS is the:
A)Attorney General
B)Chief Attorney
C)District Attorney
D)Chief Counsel

Accepted Answer

The highest ranking legal adviser of the IRS is the Chief Counsel, who provides legal guidance and interpretive advice to the IRS and Treasury.

Quiz 12: Working With the IRS

A written revenue agent's report (RAR) is prepared by the IRS agent and is given tothe taxpayer:

If a return is identified as including an unallowable item, the IRS:

When a taxpayer does not agree with the IRS agent's proposed adjustments a:

The procedure used tomatch the information recorded on a return with corresponding data received from third parties is referred toas the:

Signed intolaw in 1996, it guarantees taxpayers various rights torepresentation before the IRS. What is it called?

The program that is designed tofurnish the IRS with statistics concerning the type and number of errors that are made on a representative sample of individual income tax returns is the:

Towhom does the Chief Counsel of the Internal Revenue Service report?

An office examination is scheduled when a selected return for examination:

Which of the following examinations involves complex issues that require more advanced knowledge of the internal revenue laws and accounting skills?

A Form 911 is filed by the taxpayer as a request for which of the following?

The Commissioner of the Internal Revenue Service (IRS) is appointed by the:

How much time from the date of issue of a 30-day letter does a taxpayer have torequest a conference with an appeals officer?

The Taxpayer Assistance Order (TAO) is issued by the:

The IRS:

A statutory notice of deficiency is alsoknown as a:

In selecting returns for examination, the primary goal of the IRS is toreview only those returns that:

The National Taxpayer Advocate:

In case of underpayment of taxes, if the deficiency is not paid in a timely fashion, interest is imposed on the unpaid amount for a period that begins on the date of:

What is the formula that assigns numeric weights tocertain (undisclosed by the IRS) return items, generating a composite score for the return?

The highest ranking legal adviser of the IRS is the: