Greetings!
Happy Thursdays!
Wow! What a crazy busy week it has been since the last issue.
Hope you are having a productive and satisfactory tax season helping your clients to be on track with their tax obligations and build a healthy financial situation for themselves and their families. What an honor! Isn't it?
This week we added a new 1040examprep package of materials. The content of the all 11 e-books in slide show presentations format. Take a look here!
Have a wonderful week!
Norma Wahnon |
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Part III of the practices and procedures articles series is posted in the our blog. It is a continuation of the analysis of domain six of the IRS test specifications content.
Learn more by reading about the topic in the 1040examprep blog.
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Mutiple Choice Practice Question Statute of limitation for fraud
An individual taxpayer agreed to a finding of fraud on an income tax return filed two years ago. What is the maximum time limitation, if any, after which the IRS may not assess any additional taxes against the taxpayer for this tax return?
a. One year.
b. Two years.
c. Three years.
d. There is no time limitation.
Solution:
Choice "d" is correct. There is no statute of limitations for fraud or filing false tax returns.
Choice "a" is incorrect. There is no one year statute of limitations for assessment of tax.
Choice "b" is incorrect. There is no two year statute of limitations for assessment of tax.
Choice "c" is incorrect. The three year statute of limitations will apply to good faith mistakes with an understatement of income of less than 25%.
(Source: Questions and answers published by AICPA)
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Tax term definition section |
Tax term definition
"How are civil penalties applicable to the disclosure of tax return information?"
" Internal Revenue Code Section 6713 imposes a civil penalty of $250 on any person who is engaged in the business of preparing, or providing services in connection with the preparation of returns of tax, or any person who for  compensation prepares a return for another person, and who:
- Discloses any information furnished to him for, or in connection with, the preparation of any such return, or
- Uses any such information for any purpose other than to prepare, or assist in preparing, any such return.
Imposition of the penalty under Internal Revenue Code §6713 does not require that the disclosure be knowing or reckless as it does under Internal Revenue Code Section 7216"
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