SWFT Comprehensive Volume 2019
42nd Edition
ISBN: 9780357233306
Author: Maloney
Publisher: Cengage
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Regarding the statue of limitations on additional assessments of tax by the IRS, determine the applicable period in each of the following situations. Assume a calendar year individual with no fraud or substantial omission involved.
a. The income tax return for 2017 was filed on February 19, 2018
b. The income tax return for 2017 was filed on June 25, 2018.
c. The income tax return for 2017 was prepared on April 4, 2018, but was never filed. Through somen misunderstanding between the preparer and the taxpayer, each expected the other to file the return.
d. The income tax return for 2017 was never filed because the taxpayer thought no additional tax was due.
A calendar-year taxpayer filed an individual tax return for 2022 on March 20, 2023. The taxpayer
neither committed fraud nor omitted amounts in excess of 25% of gross income on the tax return.
What is the latest date that the Internal Revenue Service can assess tax and assert a notice of
deficiency?
March 20, 2026.
April 15, 2025.
March 20, 2025.
April 15, 2026.
Which of the following statements is false?
Select one:
O A. In general, individual taxpayers are required to file a tax return only if their gross income exceeds the standard
deduction
OB. The penalty for failure to file is more severe than the penalty for failure to pay
OC. Taxpayers may file a tax return even when they are not required to do so to obtain a refund of income taxes withheld
OD. Individual tax returns are always due on April 15 for calendar-year individuals
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- If the IRS owes a taxpayer a refund, the law generally provides that the IRS must pay interest on the refund if it is not paid within __________ days of the tax-payer filed his or her tax return or claim for refund. 30 45 60 90 None of the abovearrow_forwardIndicate whether the following statements are "True" or "False" regarding the administrative powers of the IRS. a. If the taxpayer meets the record-keeping requirement and substantiates income and deductions properly, the IRS bears the burden of proof in establishing a tax deficiency during litigation. b. The Code permits the IRS to assess a deficiency and to demand payment for the tax. However, no assessment or effort to collect the tax may be made until 30 days after a statutory notice of a deficiency (a 30-day letter) is issued. c. If the taxpayer neglects or refuses to pay the tax after receiving the demand for payment, a lien in favor of the IRS is placed on all property (realty and personalty, tangible and intangible) belonging to the taxpayer.arrow_forwardWhich ONE of the following statements is true regarding the Canada Revenue Agency's (CRA's) right to reassess an income tax return? (a) A tax return may be reassessed at any time if the taxpayer made any misrepresentation that is attributable to carelessness. (b) A tax return for an individual may be reassessed within four years of the date on which the original assessment was mailed.arrow_forward
- Which of the following statements about extensions of time to file certain business income tax returns is true? a)It is required of mostentities to us e electronic funds transfer to make all federal tax deposits. b) The IRS will send taxpayers a notification if their request for an extension is approved. c) Property filing the form wil not automatically give taxpayers the maximum extension of time to file allowed. d) The maximum extension of the to file allowed from the due date of the taxpayer's business return is generally three months.arrow_forwardIndicate whether the following statements are "True" or "False" regarding the statute of limitations. a. If no return is filed or a fraudulent return is filed, assessments can be made at any time. b. If a taxpayer omits an amount of gross income in excess of 25 percent of the gross income stated on the return, the statute of limitations does not apply. c. In general, any tax that is imposed must be assessed within three years of the later of (a) the filing date of the return or (b) the unextended due date of the return. d. The statute of limitations may be extended for a fixed period of time by mutual consent of the IRS and the taxpayer.arrow_forwardTax Drill - Interest Applicable to Federal Tax Underpayments Complete the following statements regarding the interest applicable to Federal tax underpayments and overpayments. IRS interest is compounded . IRS Deficiency Assessments Interest usually accrues from the until days after the taxpayer agrees to the deficiency by signing Form 870. If an overpayment is refunded to the taxpayer within days after the date the return is filed or is due, no interest is allowed. When the taxpayer files an amended return or makes a claim for refund of a prior year's tax, interest is authorized from the due date of the return through the date when thearrow_forward
- On April 15, 2021, the Bureau of Internal Revenue is in the process of examining Chala’s tax returns for 2018 and 2019 but has not proposed a deficiency assessment. Management feels an assessment is reasonably possible and if an assessment is made, an unfavorable settlement of up to P5,000,000 is reasonably possible. 1. Chala will accrue (disclose) in relation to the BIR examination an amount of:arrow_forwardChris Green, CPA, is auditing Rayne Co.’s 2019 financial statements. For the year ended December 31, 2019, Rayne is applying GAAP for income taxes. Rayne’s controller, Dunn, has prepared a schedule of all differences between financial statement and income tax return income. Dunn believes that as a result of pending legislation, the enacted tax rate at December 31, 2019, will be increased for 2020. Dunn is uncertain which differences to include and which rates to apply in computing deferred taxes. Dunn has requested an overview of GAAP from Green. Required: Prepare a brief memo to Dunn from Green that identifies the objectives of accounting for income taxes, defines temporary differences, explains how to measure deferred tax assets and liabilities, and explains how to measure deferred income tax expense or benefit.arrow_forwardWhich of the following is a compliance tool the IRS utilizes to address the tax gap? Compliance checks. Correspondence examinations. Discovery services. Processing and investigating unsolicited amended returns.arrow_forward
- Rich Goma Corporation failed to file its income tax return for the fiscal year ending August 31, 2021. On June 6, 2022, it filed an income tax return with a basic tax still due and payable for the fiscal year amounting to P500,000. Compute the interest penalty to be imposed by the BIR. P28,603 P45,873 P28,438 P46,207arrow_forward1. Key filed a fraudulent income tax return for the year 2021 on April 11, 2022. The BIR discovered the fraud on February 20, 2023. The last day for the BIR to collect or to send an assessment notice is a. 4/15/2032 b. 4/11/2025 c. 2/20/2033 d. 4/15/2025arrow_forwardRich Goma Corporation failed to file its income tax return for the fiscal year ending August 31, 2021. On June 6, 2022, it filed an income tax return with a basic tax still due and payable for the fiscal year amounting to P500,000. Compute the total tax assessment to be paid, excluding compromise penalty. P653,603 P689,275 P653,438 P660,873arrow_forward
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