SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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Tax Drill - Types of Audits
Complete the following statements regarding the types of audit conducted by the IRS.
Taxpayers usually are able to settle routine tax disputes (e.g., queries involving the documentation of deductions) through with the IRS. However, are conducted in an office of the IRS. In most instances, the taxpayer is subject to . A is conducted by IRS agents at the office or home of the taxpayer or at the office of the taxpayer's representative.
Under what circumstance will the Internal Revenue Service initiate contact asking for personal or
financial information by email?
When the customer's identity has been marked as suspicious.
When the preparer of the return is found in violation of Circular 230.
When a return is filed via an ERO.
The IRS does not request personal information by email.
If the audit does not turn out favorably: (Select all that apply.)
A.
Mrs. Hubbard can file an appeal with the auditor by presenting additional materials.
B.
Mrs. Hubbard can file an appeal with the auditor's manager.
C.
Mrs. Hubbard can go to a tax court.
D.
Mrs. Hubbard can file a formal appeal with the IRS.
Knowledge Booster
Similar questions
- Indicate which of the following statements are true or false: ________The IRS is a division of the Treasury Department. ________The IRS has four major divisions. ________The IRS local offices process most individual tax returns. ________IRS Campus Processing Sites are the locations that taxpayers should call to obtain tax information. ________Taxpayers should have their CPAs keep their tax records to prevent the IRS from being able to summon their records. ________Most IRS audits are conducted through the mail.arrow_forwardIn the normal course of performing their responsibilities,auditors often conduct audits or reviews of the following:1. Federal income tax returns of an officer of the corporation to determine whether heor she has included all taxable income in his or her return.2. Financial statements for use by stockholders when there is an internal audit staff.3. A bond indenture agreement to make sure a company is following all requirementsof the contract.4. Internal controls at a casino to ensure the casino is in compliance with federal andstate regulations.5. Computer operations of a corporation to evaluate whether the computer center isbeing operated as efficiently as possible.6. Annual statements for the use of management.7. Operations of the IRS to determine whether the internal revenue agents are usingtheir time efficiently in conducting audits.8. Statements for bankers and other creditors when the client is too small to have anaudit staff.9. Financial statements of a branch of the federal…arrow_forwardStatutory auditor, during the regular audit, from incoming company A to draft letters that will be addressed to customers with a request that customers confirm by direct letter that they will send to the auditor the information stated in the letter to the door of the customers' account. , audited company A refused to compile and send them to its clients. In this case, what type of report will the regular auditor issue for the balance sheet audit?arrow_forward
- The Taxpayer Advocate Service (TAS) can help taxpayers with what type of assistance? As a first step, rather than dealing with the IRS, when the taxpayer believes there are unusual circumstances involved. When the taxpayer feels the resolution applied by the IRS is unreasonable. If there is a financial difficulty, emergency, or hardship and the IRS needs to move faster than normal. When an audit results in a significant change and the deadline for appeal has passed. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardMatch the described job with the job title from 1. Revenue Officer 2. Tax Compliance Officer 3. Appeals Officer 4. Customer Service Representative 5. Revenue Agent 6. Special Agent 7. National Taxpayer Advocate 8. Deputy Commissioner 9. Chief Counsel Attorney Files a levy to get money from a taxpayer's bank account. Performs complex audits at a taxpayer's business Investigates tax evasion and conspiracy claims Performs audits on limited issues at IRS offices Writes IRS Regulationsarrow_forwardResponsibilities to Clients’ Cases. Read the following cases. For each case, state whetherthe action or situation shows a violation or potential for violation of the AICPA Code ofProfessional Conduct, explain why, and cite the relevant rule.a. CPA Sal Colt has discovered a way to eliminate most of the boring work of processingroutine accounts receivable confirmations by contracting with the Cohen Mail Service.After the auditor has prepared the confirmations, Cohen stuffs them in envelopes, mailsthem, receives the return replies, opens the replies, and returns them to Colt.b. Cadentoe Corporation, without consulting Jora Cramer, its CPA, has changed itsaccounting so that it is not in conformity with GAAP. During the regular audit engagement, Cramer discovers that the statements based on the accounts are so grossly misleading that they might be considered fraudulent. Cramer resigns the engagement aftera heated argument. Cramer knows that the statements will be given to Sandy Panzer,…arrow_forward
- When a CPA knows that a tax client has skimmed cash receipts and not reported the incomein the federal income tax return but signs the return as a CPA who prepared the return, theCPA has violated which of the following AICPA rules of conduct?a. The Confidential Client Information Rule.b. The Integrity and Objectivity Rule.c. The Independence Rule.d. The Accounting Principles Rulearrow_forwardWhich of the following types of audit evidence provides the least assurance of reliability? A. Receivable confirmations received from the client's customers B. prenumbered receiving reports completed by the client's employees C. Prior months' bank statements obtained from the client D. Municipal property tax bills prepared in the client's name.arrow_forwardThe official document issued by the CIR or his authorized representative authorizing the examination of taxpayer records is called: a.Authorization letter b.Letter Notice c.Letter of Authority d.Mission Order Which is NOT a power of the Commissioner? a.The power to abandon previous rulings b.The power to enter into a compromise c.The power to issue revenue regulations d.The power to issue rulings of first impressionarrow_forward
- Which of the following procedures is MOST likely to be performed before the balance sheet date? a. Determine the date of the Letter of Representations b. Make a legal determination whether fraud has occurred. c. Search for unrecorded liabilities. d. Confirmation of receivables. e. Updating the predecessor's audit report date.arrow_forwardWhich of the following is the most common type of audit for an individual taxpayer? Oa. Correspondence audit Ob. Telephone audit Oc. Field audit Od. Office audit Oe. None of these choices are correct.arrow_forwardList the supporting documents and records the auditorwill examine in a typical payroll audit in which the primary objective is to detect fraudarrow_forward
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