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17 Cards in this Set
- Front
- Back
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All of the following are possible defenses to tax fraud allegations except: A. The taxpayer establishes that he did not have an unrestricted right to the income. B.There is no deficiency. C. The taxpayer establishes that an objectively reasonable position was taken. D. Death of a taxpayer. |
Death of a taxpayer |
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If a US taxpayer embezzles money from his employer, reports the illicit income on his federal income tax return, and later pays the embezzled money back, what might the taxpayer be able to deduct on his tax return? A. Amount stolen and paid back as an ordinary and necessary business expense. B. Any interest paid on the original amount embezzled. C. The amount stolen and paid back as a theft loss. D. Nothing. |
The amount stolen and paid back as an ordinary and necessary business expense |
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If a US taxpayer receives a tax deficiency notice from the Internal Revenue Service, which of the following is the best defense against the notice, assuming the facts will support the defense?
A. Lack of deficiency. B. Reliance on an accountant. C. Ignorance of the law. D. Reliance on an attorney. |
Lack of deficiency |
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If a taxpayer uses Reliance on an attorney or accountant as a defense to a tax fraud charge, which of the following conditions must be met? |
I, II, & IV |
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If an individual in the United States commits tax fraud, he may be subject to civil or criminal penalties. |
True |
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If an individual in the United States steals money from his employer, he is required to report the stolen funds as taxable income on his federal income tax return. |
True |
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U.s. Internal Revenue Service sends a deficiency notice to a taxpayer that includes an allegation of criminal tax fraud, there is a presumption that the IRS's allegations of fraud are correct and the taxpayer must prove there is no fraud in order to avoid criminal sanctions. |
False |
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In most jurisdictions, a taxpayer will typically be guilty of conducting a criminal tax offense ''willfully'' even though he had a good faith or legitimate misunderstanding of the Law's requirements. |
False |
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In tax fraud cases, willfulness to commits the offense can be inferred from all of the following types of conduct except: A. Concealing assets B. Keeping a single set of books C. Destroying books or records D. Covering up sources of income |
Keeping a single set of books |
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In the United States, the government enjoys a presumption of correctness for allegations of civil tax fraud. |
False |
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Larry - yes, if the court determines |
Yes, if the court determines that the expert was qualified |
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Sandra, who has no accounting experience, personally filed her new businesses tax return for the first year. The applicable tax return was more complicated than Sondra thought, and she improperly (Although unintentionally) mireported her income. |
Sandra will not be subject to criminal penalties because her misreporting was not willful |
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The Internal Revenue Service may file a civil action against U.S. taxpayers accused of tax fraud, but it must refer criminal prosecutions to the Department of Justice. |
True |
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Which of the following is a commonly available defense to tax fraud accusations? A. Mental illness B. Amending the fraudulently submitted information C. Bankruptcy D. Death of the taxpayer |
Mental illness |
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Tax evasion is illegal, but tax avoidance is not. |
True |
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Taxpayers who commit tax fraud are subject to civil but not criminal penalties. |
False |
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_____ refers to any fraudulent actions a taxpayer commits to avoid reporting or paying his taxes. A. Tax reduction B. Tax evasion C. Tax avoidance D. None of these answers are correct |
Tax evasion |
