Question

1. Under the LB&I Directive on Information Document Requests Enforcement Process, all of the following are part of the mandatory enforcement process, except:
   1. Delinquency Notice.
   2. Notice of Deficiency.
   3. Pre-summons Letter.
   4. Summons.
      
2. Miles Patrick’s timely filed Form 1040 for the 2010 tax year is selected for audit and the Service ultimately issues a timely SNOD asserting $100,000 in additional tax due arising from Miles’ failure to substantiate business expenses. (The Service never provided Miles with a 30-day letter). Miles does not file a petition with Tax Court. On June 1, 2019, the IRS assess the tax and sends out a Notice of Intent to Levy a vacation home Miles had inherited from the passing of his mom the year before. Based on these limited facts, what’s the most effective strategy for successfully resolving Miles’ tax controversy?
   1. Request a CDP Hearing and ask to settle the underlying tax deficiency on the basis of Cohan v. Commissioner.
   2. Request a CDP Hearing and request a guaranteed installment plan.
   3. Request and a CDP Hearing and argue the IRS is barred by the statute of limitations on assessment.
   4. Do nothing and wait out the 10 year statute of limitations on collection.
      
3. For purposes of the accuracy-related penalty, what is the definition of negligence?
   1. Any failure to make a reasonable attempt to comply with the provisions. See I.R.C. section 6662(c).
   2. Lack of business due care. See I.R.M. 20.1.1.3.2.2.
   3. Intentional wrongdoing. See Spies v. U.S.
   4. A mistake of fact or law. See I.R.C. section 6751(b).
      
4. All of the following are “editorial materials” on RIA Checkpoint except:
   1. Federal Tax Coordinator Analysis.
   2. United States Tax Reporter.
   3. Current Congress: Committee Reports.
   4. Saltzman treatise on IRS Practice and Procedure.

5. Why is the Revenue Agent Report often called the 30-day letter?
   1. Because it provides 30 days for the taxpayer to protest the adjustments to the IRS Office of Appeals.
   2. Because it prohibits the IRS from taking collection action for 30 days.
   3. Because it provides 30 days for the taxpayer to petition the IRS’ proposed adjustments to the U.S. Tax Court.
   4. Because it provides taxpayers the opportunity to effectuate payment of the amount due within 30 days and not pay additional interest.
      
6. Why is the Statutory Notice of Deficiency often called the 90-day letter?
   1. Because it provides 90 days for the taxpayer to protest the adjustments to the IRS Office of Appeals.
   2. Because it prohibits the IRS from taking collection action for 90 days.
   3. Because it provides 90 days for the taxpayer to petition the IRS’ proposed adjustments to the U.S. Tax Court.
   4. Because it provides taxpayers the opportunity to effectuate payment of the amount due within 90 days and not pay additional interest.
      
7. All of the forms would generally be expected to be included in the 30-day letter except:
   1. Form 5701, Notice of Proposed Adjustment.
   2. Form 886-A, Explanation of Items.
   3. Form 2848, Power of Attorney.
   4. Form 4549, Income Tax Examination Changes.
      
8. Which form is used to extend the statute of limitations on assessment?
   1. Form 911
   2. Form 872
   3. Form 433-A
   4. Form 886-A
      
9. What is the general statute of limitations on collection and what is the relevant code section?

1. 3 Years; I.R.C. § 6501
2. 3 Years; I.R.C. § 6502
3. 10 Years; I.R.C. § 6501
4. 10 Years; I.R.C. § 6502
   

10. The Form 433-A is used for:

1. Collection Information Statement for Individuals
2. Disclosure Statement
3. Notice of Federal Tax Lien/Levy
4. Request for a Collection Due Process or Equivalent Hearing
   

11. All of the following are grounds for an Offer In Compromise except:

1. Doubt as to Liability
2. Doubt as to Identity
3. Doubt as to Collectability
4. Effective Tax Administration
   
   
   
   
   

12. What is the form to request a CDP hearing?

1. Form 433-A
2. Form 433-B
3. Form 872
4. Form 12153
   

13. When may a taxpayer raise defenses to penalties at a CDP Hearing?
    1. A taxpayer may always raise defenses to penalties at a CDP Hearing.
    2. Only if the penalty at issue is the fraud penalty.
    3. Only if the taxpayer did not previously have an opportunity to raise defenses to penalties at the Office of Appeals.
    4. Only if the defense is a request for First Time Abatement.
       
14. How does an Equivalent Hearing differ from a CDP Hearing?
    1. A taxpayer may not raise defenses to penalties.
    2. A taxpayer may not raise defenses to penalties or otherwise contest the underlying tax liability.
    3. A taxpayer may not appeal the decision to Tax Court.
    4. The premise of this question is wrong; there is no difference.
       
15. The IRS receives a refund claim but does nothing. When is the earliest from the date of filing that the taxpayer may sue in court?

1. 3 months
2. 6 months
3. 9 months
4. 12 months
   

16. Taxpayer files a tax return on June 1, 2015 for the 2014 tax year showing $50,000 in taxes due. $30,000 had been withheld during 2014 and was already paid. Upon filing, the Taxpayer paid the remaining $20,000. On May 1, 2018, Taxpayer files a refund claim for $50,000. Under I.R.C. § 6511, what is the limit on the potential amount of his refund?

1. No limit.
2. $20,000
3. $30,000
4. $50,000
   

17. Who must approve all refund claims in excess of $2 million ($5 million in the case of corporations)?
    1. Commissioner of the IRS
    2. IRS Office of Chief Counsel
    3. Joint Committee on Taxation
    4. IRS Office of Appeals
       
18. Which Code section sets forth the rule that returns due on a weekend or legal holiday are considered timely filed if the return is filed on the next business day?
    1. I.R.C. § 6501
    2. I.R.C. § 7501
    3. I.R.C. § 7502
    4. I.R.C. § 7503
       
19. Taxpayer timely files his 2010 tax return on April 15, 2011 and pays tax due of $100,000. On June 30, 2014, taxpayer thinks he underpaid his 2010 tax and sends $50,000 to the IRS. However, on January 1, 2015, taxpayer realizes that he did not owe any tax at all and files a claim for refund. What is the limit of taxpayer’s potential refund?
    1. No Limit.
    2. $0.
    3. $50,000.
    4. $100,000.
       
20. What specific relief is the taxpayer seeking in Facebook v. I.R.S., 2018 WL 2215743?
    1. A hearing before the IRS Office of Appeals.
    2. IRS Concession with respect to a $7 billion transfer pricing adjustment.
    3. Abatement of accuracy-related penalties.
    4. A hearing to appeal the IRS’ determination before an independent forum.
       
21. According to Facebook v. I.R.S., 2018 WL 2215743, which Revenue Proceeding provides the following: Counsel will not refer to Appeals any docketed case or issue that has been designated for litigation by Counsel. In limited circumstances, a docketed case or issue that has not been designated for litigation will not be referred to Appeals if Division Counsel or a higher level Counsel official determines that referral is not in the interest of sound tax administration”?
    1. Rev. Proc. 2016-22.
    2. Rev . Proc. 2012-18.
    3. Rev. Pro 58-66.
    4. Rev. Proc. 99-5.
       
22. What are the tax years at issue in Facebook v. I.R.S., 2018 WL 2215743?
    1. 2008, 2009, and 2010.
    2. 2010, 2011, and 2012.
    3. 2012, 2013, and 2014.
    4. 2014, 2015, and 2016.
       
       
       
       
       
23. Which of the following, if true, would most help Facebook’s argument in Facebook v. I.R.S., 2018 WL 2215743 for the relief it seeks?
    1. The Taxpayer Advocate issued a statement saying Facebook should have a right to a hearing before the IRS Office of Appeals.
    2. Facebook has protested proposed adjustments in prior audit years to the IRS Office of Appeals.
    3. Emails between high-level IRS executives showing significant dissent around the decision to deny Facebook a right to a hearing before the IRS Office of Appeals.
    4. A statutory right to a hearing before the IRS Office of Appeals.
       
24. Which of the below is a true statement about the changes brought about by the Taxpayer First Act of 2019 (the “Act”)?
    1. The Act eliminates the U.S. Tax Court.
    2. The Act establishes an unqualified right for taxpayers to contest proposed adjustments at the IRS Office of Appeals.
    3. The Act eliminates the Internal Revenue Code.
    4. The Act mandates the IRS report to Congress those taxpayers which were denied the ability to contest proposed adjustments at the IRS Office of Appeals.
       
25. Which of the below tax policies is most clearly implicated in the previous caselaw discussed in Smith v. Commissioner, 140 T.C. 48 (2013) that has allowed not only taxpayers residing abroad but also those taxpayers outside the country during the mailing of the Statutory Notice of Deficiency the 150-day period to petition the Tax Court?
    1. Horizontal Equity.
    2. Revenue Raising.
    3. Progressive Principle.
    4. Privacy.

Answer 1

QUESTION 1 :

C) Pre-summons Letter

QUESTION 2:

D) Do nothing and wait out the 10 year statute of limitations on collection

QUESTION 3 :

A) Any failure to make a reasonable attempt to comply with the provisions. See I.R.C. section 6662(c)

QUESTION 4 :

C) Current Congress: Committee Reports.

QUESTION 5 :

D) Because it provides taxpayers the opportunity to effectuate payment of the amount due within 30 days and not pay additional interest.

QUESTION 6 :

A) Because it provides 90 days for the taxpayer to protest the adjustments to the IRS Office of Appeals.

QUESTION 7:

C) Form 2848, Power of Attorney.

QUESTION 8

B) Form 872

QUESTION 9

A) 3 Years; I.R.C. § 6501

QUESTION 10

A) Collection Information Statement for Individuals

QUESTION 11

B) Doubt as to Identity

QUESTION 12

D) Form 12153