1. Your return may be selected for examination on the basis of computer scoring. This is a computer program that assigns a numeric score to each individual and some corporate tax returns after they have been processed. This computer program is called the

A. Tax Return with Errors Selector (TRE).
B. Taxpayer Random Selector (TRS).
C. Discriminant Inventory Function System (DIF).
D. Discriminant Delinquent Taxpayer Finder (DDTF).

2. Your return may be selected for examination on the basis of

A. Information received from third-party documentation.
B. Discriminant Inventory Function System (DIF).
C. A selection to address both the questionable treatment of an item and to study the behavior of similar taxpayers in handling a tax issue.
D. All of the above.

3. Your return may be selected for examination as a result of information received from

A. Newspapers.
B. Public records.
C. Individuals.
D. Any of the above.

4. The person that represents you can be a federally authorized practitioner, including an attorney, a certified public accountant, an enrolled agent, an enrolled actuary, or the person that prepared your return and signed as a preparer. The same confidentiality protection that you have with an attorney also applies to certain communications that you have with

A. The IRS.
B. Federally authorized practitioners.
C. The attorney representing the IRS.
D. Your family.

5. Advising you on tax matters within the scope of the practitioner's authority before the IRS, would be an example of a

A. Confidential communication between you and the IRS.
B. Confidential communication between you and the attorney representing the IRS.
C. Confidential communication between you and the federally authorized practitioner.
D. Confidential communication between you and your family.

6. The IRS tries to avoid repeat examinations of the same items, but sometimes this happens. If your tax return was examined for the same items in either of the 2 previous year and no change was proposed to your tax liability, contact the IRS to

A. Report the abuse of the employee whom selected you for the second time.
B. See what other paperwork they want you to send them.
C. Tell them to stop and that it is against the law.
D. See if examination should be discontinued.

7. If your examination takes place in the IRS office, you can request an immediate meeting with the examiner's supervisor to explain your position. If an agreement is reached, your case will be closed. If you cannot reach an agreement with the supervisor at this meeting,

A. The examiner will close your case.
B. The examiner will write up your case explaining your position and the IRS' position.
C. The examiner will offer you an offer in compromise.
D. The examiner will try to convince you to agree.

8. File Form 1040X only after you have filed your original return. Generally, for a credit or refund, Form 1040X must be filed within

A. 3 years after the date you filed the original return.
B. 2 years after the date you paid the tax.
C. 5 years after the due date of your return.
D. Either A or B, whichever is later.

9. The IRS has selected Frances' 2008 tax return for examination. The only item of inquiry in the IRS contact letter was for verification of charitable contributions. France's tax return for 2007 was also examined to verify her charitable contributions, and no change was proposed to her tax liability. If Frances advises the IRS representative that no change resulted in her tax return for 2007, the examination of her tax return for 2008

A. Might be discontinued.
B. Screened more carefully for other errors.
C. Will continue no matter what.
D. Be delayed because of Frances' interference, but no change will result.

10. Karl had his 2004 income tax return examined resulting in adjustments. Karl has administratively appealed the adjustments. Some of them were sustained, resulting in an income tax deficiency. Karl wants to appeal his case to the U.S. Tax Court and is entitled to invoke the Small tax case procedure if the amount of tax deficiency is not over

A. $100,000.
B. $10,000.
C. $25,000.
D. $50,000.

11. The examination of Linda's tax return for 2005 resulted in adjustments creating a tax liability in the amount of $30,000. Linda does not believe she owes anything. A Notice of Proposed Income Tax Deficiency is issued to Linda, who wants to appeal the Revenue Agent's adjustments by taking the matter to the IRS Office of Appeals. Linda must file an appeal no later than

A. 10 days.
B. 30 days.
C. 90 days.
D. None of the above.

12. During the course of examining Ollie's income tax return, the Revenue Agent required information from third party sources. Which of the following provisions does not apply to the Revenue Agent giving Ollie reasonable notice before contacting third parties?

A. Pending criminal investigations.
B. Providing notice might result in reprisal against the contact.
C. When providing notice would jeopardize collection of any tax liability.
D. Any of the above.

13. Harry claimed gambling losses on his income tax return. The return was examined by the IRS and the losses were disallowed and the disallowance increased his tax liability. Harry pursued an appeal before the IRS Appeals Office, which sustained the Revenue Agent's adjustment. Harry now wants to take his case to a judge. In which of the following courts can Harry file a tax action?

A. United States Court of Federal Claims.
B. United States District Court.
C. United States Tax Court.
D. Any of the above.

14. In certain circumstances, the IRS will allow you to pay less than the full amount you owe. There being any doubt about the amount you owe (or whether you owe it), or if there is doubt as to whether you can pay the amount you owe based on your financial situation, would be a good indication that that the IRS will accept your

A. Offer to enlist with the IRS.
B. Offer to leave the country.
C. Offer in Compromise.
D. Offer in installments.

15. Generally, you must file a claim for a credit or refund within

A. 3 years from the date you filed your original return.
B. 2 years from the date you paid the tax.
C. 3 years from the date you paid the tax.
D. Whichever is the later of A or B.

16. The Internal Revenue Service (IRS) accepts most federal returns as filed. Some returns, however, are examined, or audited to determine if the following is reported accurately.

A. Income.
B. Expenses.
C. Credits.
D. Any of the above.

17. The IRS has the burden of initially producing evidence in court proceedings with respect to the liability of any individual taxpayer for any penalty, addition of tax, or additional amount imposed by the tax laws.         

True False

18. Any tax court with proper jurisdiction, including the Tax Court, can order the IRS to refund any part of a tax deficiency that the IRS collects from you during a period when the IRS is not permitted to assess the deficiency or to levy or engage in any court proceeding to collect that deficiency. Generally, the IRS is not permitted to take action on a tax deficiency during

A. The 90-day (or 150-day if outside the United States) period that you have to petition a notice of deficiency to the Tax Court.
B. The period that the case is under appeal if a bond is provided.
C. Either A or B above.
D. The 30-day (or 90-day if outside the United States) period that you have to petition a notice of deficiency to the Tax Court.

19. If you are an individual, the period of limitations on credits and refunds can be suspended during periods when you cannot manage your financial affairs because of physical or mental impairment that is medically determinable and

A. Someone else was authorized to act for your in financial matters and he or she was vacation.
B. Has lasted or can be expected to last continuously for at least 12 months, or can be expected to result in death.
C. Has lasted or can be expected to last continuously for at least 12 months.
D. Can be expected to result in death.

20. Federal tax overpayments can be used to offset past-due, legally enforceable state income tax obligations. Overpayment will be offset with a priority placed on

A. Past-due child support because children are placed first in priority.
B. Federal income tax owed.
C. Future federal income tax liability.
D. Past-due, legally enforceable state income tax debt.

21. The IRS accepts most taxpayers' returns as filed. If they inquire about your return or select it for examination, it

A. Suggests that you are dishonest.
B. Does not suggest that you are dishonest.
C. Means that your return will be changed.
D. Means that you may receive a refund.

22. If your examination is conducted by mail and you don't act on you own behalf, you can have someone represent you in correspondence with the IRS. This person must be an attorney, accountant, enrolled agent, an enrolled actuary, or the person who prepared your return and signed as the preparer. You must furnish a written authorization allowing this person to act on your behalf. Make this authorization on

A. Form 1040.
B. Form 1040A.
C. Form 2106.
D. Form 2848 or any other properly written authorization.

23. During an examination, if you think you will owe additional tax at the end of the examination, you can stop interest from accumulating by

A. Paying all or part of the amount you think you will owe.
B. Closing the case right away without putting a up a fight.
C. Declaring to the auditor that you will not owe any tax.
D. Asking the auditor to charge interest only on the date the penalties are assessed.

24. If you filed a joint tax return, you are jointly and individually responsible for the tax and any interest or penalty due on the joint return,

A. Even if you later divorce.
B. However, a spouse may be relieved of the tax, interest, and penalties on a joint return.
C. But not if you later divorce.
D. Both A and B above.

25. If you do not agree with any or all of the IRS findings, to help resolve disputes resulting from the examination (audits), 

A. You may demand to speak to the manager immediately.
B. You may request Fast Track Mediation services.
C. You may pay the amount in full.
D. Any of the above.

26. You may appeal the IRS' decision with this office, which is separate and independent of the IRS Office that is taking the action that you disagree with. An __________ is the only level of appeal within the IRS. 

A. Appeals office.
B. Agreement to mediate.
C. Office of Fast Track Mediation services.
D. IRS Office.

27. If you want to have a conference with an appeals officer, you may also need to file 

A. A small case request.
B. Formal written protest.
C. Installment agreement.
D. Either A or B above.

28. The following is a case in which a written protest is not required.

A. All employee plan and exempt organization cases without regard to the dollar amount at issue.
B. All partnership and S corporation cases without regard to the dollar amount at issue. 
C. All other cases that don't qualify for the small case request procedure, or the special appeal procedures such as requesting Appeals consideration of liens, levies, seizures, or installment agreements.
D. None of the above.

29. If you filed a joint tax return, you are jointly and individually responsible for the tax and any interest or penalty due on the joint return, even if you later divorce. In the following case, a spouse may be relieved of the tax, interest, and penalties on a joint return:

A. Innocent spouse relief.
B. Separation of liability. 
C. Equitable relief.
D. Any of the above.

30. The IRS offers fast track meditation services to help taxpayers resolve many disputes resulting from

A. Examinations (audits).
B. Offers in Compromise. 
C. Trust fund recovery penalties, and other collection actions.
D. Any of the above.