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The interest charged by the IRS for the first three months of 2017 was:
4%
   
Which amount represents the standard deduction for a taxpayer who is single and 68 years of age?
$7,900
   
Luisa's parents can claim her as a dependent on their tax return. In 2017,
her only source of income was a part-time job as a medical clerk where she earned $2,600 during the year. What is Luisa's standard deduction?
$2,950
   
The maximum penalty for failure to file a tax return that is not due to fraud is 25%.
True
   
A married couple can file a joint return only if both have earned income.
False
   
What is the amount of the tax liability for a head of household person having taxable income of $122,500
 All answers should be rounded to the nearest dollar.
$24,878
   
The taxpayer's spouse died at the beginning of 2017. She has a qualifying child.
Which status should the taxpayer select when filing her tax return for 2017?
Head of Household
   
The amount of tax liability for a taxpayer depends on many factors, including the filing status of the taxpayer.
True
   
Failure to make required estimated payments will subject the taxpayer to a potential underpayment penalty plus interest.
However, if the difference between the tax shown on the return and the amount of tax withheld for wages is less than _______,
the taxpayer will not be assessed a penalty.
$1,000
   
Severin, who is 20 years old and a full- time student, is claimed by his parent as a dependent.
However, in 2017, he earned $5,350. What is the amount of the personal exemption that he can claim on his tax return?
$0
   
Which of the following statements is true regarding the individual income tax formula?
A taxpayer may deduct the greater of his standard deduction or his itemized deductions from AGI to arrive at taxable income.
Expenses such as contributions to qualified retirement accounts and business expenses for self-employed persons are deductions _________ AGI.
For
   
A taxpayer's _______  ________ depends on his or her marital status at the end of the year and whether the taxpayer has dependents.
Filing Status
 
Unmarried taxpayers will file as _ if they do not qualify for head of household or qualifying widow(er) status
Single
   
When can the married filing jointly or married filing separately filing status be used?
When the taxpayers are married as of the last day of the tax year
When one spouse died during the year and the surviving spouse has not remarried
   
Which of the following items may be subtracted from adjusted gross income to arrive at taxable income?
Standard deduction
Itemized deductions
   
A taxpayer who files as married filing separately must show the name and social security number of their spouse on Form 1040. The standard deduction can be taken only if __________ of them choose the standard deduction.
Both
   
The tax code defines ___ as gross income minus a list of permitted deductions.
Adjusted Gross Income
   
If a taxpayer is unmarried at the end of the year, which of the following filing statuses could possibly be used by the individual?
Head of household
Single
   
Which of the following criteria will contribute toward qualifying a taxpayer for head of household status?
Living with a qualifying person (other than parents) in the taxpayer's home for more than half the year
Be unmarried (or considered unmarried under the abandoned spouse provisions) at the end of the year
Provide over half the cost of a household for a dependent parent not living with the taxpayer
Pay more than half the costs of keeping up a home for the year
   
Ruida divorced on October 31 of the current year. He does not have any dependents. Which filing status should Ruida use for the current year?
Single
   
The tax code defines ______ ______ _____ as gross income minus a list of permitted deductions.
 
Adjusted Gross Income
   
Ashley and Roland were married and had two dependent children. Roland died last year. What filing status will Ashley use for the year Roland died and for the current year (assuming she does not remarry)?
Ashley will use married filing jointly in the prior year and qualifying widow in the current year.
   
Which filing status is used if one spouse dies during the year and the surviving spouse does not remarry before the end of the year?
Married filing jointly
   
Which of the following criteria is not necessary to qualify as a dependent of another taxpayer?
Must be unmarried for at least a portion of the year
   
Which of the choices below are the tests that must be met to qualify as a qualifying child?
Residence
Relationship
Age
Support
   
If an individual could be a qualifying child for either her parent or her grandparent, the _ (parent/grandparent) may claim the dependent.
Parent
   
When a divorced taxpayer pays over half the cost of maintaining a home where she and a dependent child lived for over half the year, she qualifies for which filing status?
Head of household
   
Which of the following is true regarding the qualifying widow or widower filing status?
The surviving spouse must have dependents.
The surviving spouse must NOT have remarried during the year.
The status may be used for up to two years after the year the other spouse died.
   
Lan is from Vietnam and has lived in the U.S. for five months during the year.
He is not yet considered a resident because he hasn't lived in the U.S. for long enough.
He resides with his uncle who is a U.S. citizen. Lan is single and a full-time student.
He is considered a qualifying child of his uncle.
Which of the following is correct regarding Lan's status as a dependent?
Lan can NOT be claimed as a dependent by his uncle because he is not a citizen or resident of the U.S..
   
Which of the choices below is not one of the tests that must be met to qualify as a qualifying relative?
Age
   
The four tests that must be met to qualify as a qualifying child are: _, _, _, and _.
age
relationship
residency
support
   
Kara is single with no dependents. She has itemized deductions of $4,100. What is the total of her from AGI deductions for 2021?
$12,550
   
If an individual is a qualifying child for both of his parents who divorced during the year, which parent is entitled to claim the dependent?
The parent that had custody for the most time during the year.
   
In 2021 Ryan files as head of household and has taxable income of $123,212. None of his taxable income consists of capital gains or qualified dividends. Using the tax rate schedule in Appendix F, his tax liability totals $ (rounded to the nearest dollar).
$22,140
   
Which of the choices below are the tests that must be met to qualify as a qualifying relative?
Relationship
Support
Gross income
   
A taxpayer's from AGI deductions include greater of the standard deduction or the taxpayer's _ deductions.
Itemized
   
Which of the following choices is not a form of a tax prepayment?
A tax refund received in the current year for the prior year
   
In a situation where the parents are divorced and the child resides with both parents for the same amount of time during the year, the qualifying child should be reported on the return for the parent with the
highest AGI.
   
A taxpayer's required annual payment for estimated taxes must equal the lesser of ______ % of the tax shown on the return or ______ % of the tax shown on the return for the preceding year.
90, 100
   
Amy and Ethan are married and file a joint return for 2021. Their taxable income is $108,300. What is the amount of their tax liability using the tax rate schedule in Appendix F?
$15,323
   
The late filing penalty equals _______ % of the amount of tax owed for each month that the tax return is late, with a maximum penalty of _______ %.
5, 25
   
True or false: In order to meet the qualifying relative requirements, an individual must satisfy all of the following tests: support, relationship, and gross income.
True
   
A _ tax includes income taxes withheld from a taxpayer's salary by an employer, estimated tax payments paid directly to the IRS, and amounts from a prior year overpayment that were applied to the current year's tax liability.
Prepayment
   
A(n) ___ penalty will be assessed on a taxpayer who pays her taxes due after the due date of the return.
Failure to pay
   
How can taxpayers protect themselves from incurring an underpayment penalty?
Taxpayers should meet one of the safe harbor provisions for estimated tax payment requirements.
   
Taxpayers are not assessed a penalty if the difference between the tax shown on the return and the amount of tax withheld for wages is less than $_.
$1,000
   
There is one tax infraction that incurs a penalty calculated as 15% of the amount of tax owed per month with a maximum penalty of 75%. What violation incurs this level of penalty?
Fraudulent failure to file
   
What is the penalty for negligent reporting on a tax return?
20% penalty
   
True or false: A six-month extension will allow the taxpayer to extend the tax payment date without penalty.
False
   
Taxpayers may be subject to a(n) __ if they have taxes due and have not met the safe harbor provisions.
Tax penalty
   
A taxpayer who has income that is not subject to withholding may be required to make __ during the year.
Estimated Payments
   
In which of the following situations may the IRS impose a 20% penalty?
Erroneous claim for refund
Negligence
   
A single taxpayer is 26 years old and has wages of $18,350 and interest income of $450. Which Form 1040 Schedule must the taxpayer use?
The taxpayer does not need to use a Schedule.
   
Esmeralda is 20 years of age and a full-time student living with her parents.
She had wages of $545 ($50 of income tax withholding) for 2021.
Can Esmeralda file a tax return to claim her $50 of income tax withholding even though she is a dependent of her parents?
Yes, Esmeralda can file a tax return.
   
A taxpayer can claim a dependent if the person is a qualifying child or a qualifying relative and the person meets all of the following tests.
Dependent taxpayer, joint return, and citizen or resident tests.
   
To be a qualifying relative, who has to live in the home of the taxpayer for the entire year?
Cousin (A cousin does not meet the relationship test under this area. He/she must live in the taxpayer's household for the entire year.)
   
Which amount represents the standard deduction for a taxpayer who is 44 years old and claims head of household status?
The standard deduction for a taxpayer under age 65 and claiming head of household status is $18,800.
   
George and Debbie were legally married on December 31, 2017. Can they file their 2017 income tax return using the status of married filing jointly? Why or why not? What other filing status choices do they have, if any?
Yes. But also Married filing separate is another choice.
   
The Internal Revenue Code was first codified in what year?
1939
   
Tax bills are handled by which committee in the U.S. House of Representatives?
Ways and Means committee
   
Federal tax legislation generally originates in what body?
House Ways and Means Committee
   
Which of the following criteria is not necessary to qualify as a dependent of another taxpayer?
Must be unmarried for at least a portion of the year
   
Subtitle A of the Internal Revenue Code covers which of the following taxes?
Income taxes
   
In § 212(1), the number (1) stands for the:
Paragraph designation
   
Which of these is not a correct citation to the Internal Revenue Code?
Section 211
Section 1222(1)
Section 2(a)(1)(A)
Section 280B
All of these are correct cites
   
Which of the following is not an administrative source of tax law?
Field Service Advice
Revenue Procedure
Technical Advice Memoranda
General Counsel Memorandum
All of these are administrative sources.
   
Which of the following sources has the highest tax validity?
Internal Revenue Code section
   
Which of the following types of Regulations has the highest tax validity?
Legislative
   
Which statement is not true with respect to a Regulation that interprets the tax law?
Issued by the U.S. Congress.
   
In addressing the importance of a Regulation, an IRS agent must:
Give equal weight to the Code and the Regulations.
   
What statement is not true with respect to Temporary Regulations?
May not be cited as precedent.
   
What administrative release deals with a proposed transaction rather than a completed transaction?
Letter Ruling
 
When can a single taxpayer's mother or father be a qualifying person for determining head of household filing status?
When the taxpayer can claim a dependency exemption for the parent and the taxpayer pays over half the cost of maintaining the parent's home
   
Which of the choices below are the tests that must be met to qualify as a qualifying child?
Residence
Age
Support
Relationship
   
Which of the following individuals would meet the relationship test for being a qualifying child of the taxpayer?
Child
Grandchild
Niece (younger than the taxpayer)
Brother (younger than the taxpayer)
   
Which of the following choices are filing statuses that may be used by a taxpayer?
Married filing jointly
Single
Head of household
   
Unmarried taxpayers will file as if they do not qualify for head of household or qualifying widow(er) status.
single
   
Which of the following statements is true regarding the individual income tax formula?
A taxpayer may deduct the greater of his standard deduction or his itemized deductions from AGI to arrive at taxable income.
   
Expenses such as contributions to qualified retirement accounts and business expenses for self-employed
persons are deductions (for/from) AGI.
for
   
When can the married filing jointly or married filing separately filing status be used?
When the taxpayers are married as of the last day of the tax year
When one spouse died during the year and the surviving spouse has not remarried
   
Which of the following statements is correct regarding the choice of a taxpayer's filing status?
Filing status depends on marital status and whether the taxpayer has dependents.
   
A taxpayer who files as married filing separately must show the name and social security number of their spouse
on Form 1040. The standard deduction can be taken only if of them choose the standard deduction.
both
   
A taxpayer may file as a single taxpayer when:
she is unmarried at the end of the tax year
   
Which of the following criteria will contribute toward qualifying a taxpayer for head of household status?
Provide over half the cost of a household for a dependent parent not living with the taxpayer
Be unmarried (or considered unmarried under the abandoned spouse provisions) at the end of the year
Pay more than half the costs of keeping up a home for the year
Living with a qualifying person (other than parents) in the taxpayer's home for more than half the year
   
Which of the following indicates that a decision has precedential value for future cases?
Stare decisis
   
A taxpayer who loses in a U.S. District Court may appeal directly to the:
U.S. Circuit Court of Appeals.
   
If a taxpayer decides not to pay a tax deficiency, he or she must go to which court?
U.S. Tax Court
   
Which of the following statements is true regarding the individual income tax formula?
A taxpayer may deduct the greater of his standard deduction or his itemized deductions from AGI to arrive at taxable income.
   
Which of the following is true regarding the qualifying widow or widower filing status?
The status may be used for up to two years after the year the other spouse died.
The surviving spouse must NOT have remarried during the year.
The surviving spouse must have dependents
   
When can the married filing jointly or married filing separately filing status be used?
When the taxpayers are married as of the last day of the tax year
When one spouse died during the year and the surviving spouse has not remarried
   
A jury trial is available in the following trial court:
U.S. District Court.
   
Which of the following items may be subtracted from adjusted gross income to arrive at taxable income?
Standard deduction
Itemized deductions
   
Which filing status is used if one spouse dies during the year and the surviving spouse does not remarry before the end of the year?
Married filing jointly
   
Which of the following statements are correct concerning the married filing separately (MFS) filing status?
Tax-related items for MFS taxpayers (i.e. tax rate schedules, standard deduction amounts) are almost half the amounts for MFJ taxpayers.
The MFS status may be useful when one spouse does NOT want to be in contact with the other spouse.
   
Which of the following individuals meet the requirements of a qualifying person for determining head of household filing status?
The taxpayer's mother who is a dependent of the taxpayer, but lives in her own home which is maintained by the taxpayer
   
Which of the following requirements are necessary to qualify for head of household status?
Pay more than half the costs of keeping up a home for the year
Be unmarried (or considered unmarried under the abandoned spouse provisions) at the end of the year
 
A taxpayer may not appeal a case from which court:
Small Case Division of the U.S. Tax Court.
   
The IRS will not acquiesce to the following tax decisions:
Small Case Division of the U.S. Tax Court.
   
Which publisher offers the Standard Federal Tax Reporter?
Commerce Clearing House
   
Which is presently not a major tax service?
Federal Taxes
   
Which publisher offers the United States Tax Reporter?
Research Institute of America
   
When searching on an online tax service, which approach is more frequently used?
Keyword approach
   
A researcher can find tax information on home page sites of:
Governmental bodies.
Tax academics.
Publishers.
CPA firms.
All of these.
   
Tax research involves which of the following procedures:
Identifying and refining the problem.
Locating the appropriate tax law sources.
Assessing the validity of the tax law sources.
Follow-up.
All of these.
   
Which tax-related website probably gives the best policy-orientation results?
taxanalysts.com.
   
Which court decision would probably carry more weight?
Reviewed U.S. Tax Court decision
   
Which Regulations have the force and effect of law?
Legislative Regulations
   
Which items tell taxpayers the IRS's reaction to certain court decisions?
Actions on Decisions
   
Which court decision carries more weight?
Second Circuit Court of Appeals
   
Which company does not publish citators for tax purposes?
John Wiley & Sons
   
Which is not a primary source of tax law?
Prop. Reg. § 1.7524T(f).
   
Which statement is incorrect with respect to taxation on the CPA exam?
There are no longer case studies on the exam.