Question 1

The Square Services Corporation estimates that its 2008 taxable income will be $800,000.Thus,it is subject to a flat 34% income tax rate and incurs a $272,000 liability.For each of the following independent cases,compute Square's minimum quarterly estimated tax payments that will avoid an underpayment penalty.
a.For 2007, taxable income was ($150,000). Square carried back all of this loss to prior years and exhausted the entire net operating loss in creating a zero 2007 liability.
b.For 2007, taxable income was $700,000, and tax liability was $238,000.
c.For 2006, taxable income was $2 million, and tax liability was $680,000. For 2007, taxable income was $100,000, and tax liability was $22,250.

Accepted Answer

The answer of The Square Services Corporation estimates that its...

Question 2

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s) .

Accepted Answer

A)  No return at all is filed.
B)  An investment in a marketable security is worthless.
C)  Taxpayer discovers an inadvertent overstatement of deductions equal to 5% of gross income.
D)  Taxpayer inadvertently omits an amount of gross income in excess of 25% of the gross income stated on the return.E) None of the above
F) All of the above

Question 3

A CPA cannot take a tax return position for a client that is contrary to current IRS interpretations of the law.

Accepted Answer

A) True 
 B)False

Question 4

In a criminal fraud case,the burden is on the taxpayer to show that he or she was innocent "beyond the shadow of any reasonable doubt."

Accepted Answer

A) True 
 B)False

Question 5

The Statements on Standards for Tax Services are issued by the:

Accepted Answer

A)  IRS.
B)  Sarbanes-Oxley Commission.
C)  AICPA.
D)  SEC.E) B) and C)
F) A) and C)

Question 6

Dana underpaid his taxes by $170,000.Portions of the underpayment were attributable to negligence ($90,000)and to civil fraud ($80,000).Compute the total penalties incurred.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> If the underpayment is partia...

Question 7

The client has decided to dispute the Revenue Agent's Report.What is the tax advisor's next step?

Accepted Answer

Carrying out a level of due di...

Exam 16: Tax Practice and Ethics

Correct Answer
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The Statements on Standards for Tax Services are issued by the:

Correct Answer
verified

A CPA cannot take a tax return position for a client that is contrary to current IRS interpretations of the law.

Correct Answer
verified

Dana underpaid his taxes by $170,000.Portions of the underpayment were attributable to negligence ($90,000)and to civil fraud ($80,000).Compute the total penalties incurred.

Correct Answer
verified
If the underpayment is partia...
View Answer

In a criminal fraud case,the burden is on the taxpayer to show that he or she was innocent "beyond the shadow of any reasonable doubt."

Correct Answer
verified

The client has decided to dispute the Revenue Agent's Report.What is the tax advisor's next step?

Correct Answer
verified
Carrying out a level of due di...
View Answer

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s) .

Correct Answer
verified

Exam 16: Tax Practice and Ethics

Correct AnswerverifiedShow Answer

The Statements on Standards for Tax Services are issued by the:

Correct AnswerverifiedShow Answer

A CPA cannot take a tax return position for a client that is contrary to current IRS interpretations of the law.

Correct AnswerverifiedShow Answer

Dana underpaid his taxes by $170,000.Portions of the underpayment were attributable to negligence ($90,000)and to civil fraud ($80,000).Compute the total penalties incurred.

Correct Answerverified If the underpayment is partia...View AnswerShow Answer

In a criminal fraud case,the burden is on the taxpayer to show that he or she was innocent "beyond the shadow of any reasonable doubt."

Correct AnswerverifiedShow Answer

The client has decided to dispute the Revenue Agent's Report.What is the tax advisor's next step?

Correct AnswerverifiedCarrying out a level of due di...View AnswerShow Answer

The usual three-year statute of limitations on additional tax assessments applies in the following situation(s) .

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
If the underpayment is partia...
View Answer

Correct Answer
verified

Correct Answer
verified
Carrying out a level of due di...
View Answer

Correct Answer
verified