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14 Cards in this Set
- Front
- Back
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What is a statute of limitations?
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The statutory limit on the time period after a tax return is filed during which the IRS can audit the return and assess additional tax.
3 years from the later of the statutory due date (April 15th) to examine that return for mistakes and to assess any additional tax. |
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If a taxpayer files a return and omits an amount of gross income exceeding 25 percent of the gross income reported on the return what happens?
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The normal three-year statute of limitations is extended to six years.
If the IRS determines that a return is fraudulent the return remains open indefinitely |
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What is a late-filing and late-payment penalty?
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The penalty imposed on taxpayers who fail to file their returns and pay the balance of tax due on a timely basis.
5% first five months, .5% after |
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What is a discriminate function system (DIF) score?
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A numeric score assigned to individual tax returns that measure the return's potential for generating additional tax on audit.
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What is a correspondence examination?
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The simplest type of audit that can be handled entirely by telephone or through the mail.
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What is an office examination?
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An audit conducted by a tax auditor at an IRS district office.
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What is a field examination?
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An audit conducted by a revenue agent at the taxpayers place of business.
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What is an enrolled agent?
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A tax practitioner certified by the IRS to represent claims in IRS proceedings.
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What is a deficiency?
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An underpayment of tax determined on audit and assessed by the IRS.
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What is the Taxpayer Bill of Rights (1989)?
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Part of the federal law requiring the IRS to deal with every citizen and resident in a fair, professional, prompt, and courteous manner.
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What is negligence?
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Failure to make a prudent attempt to comply with the tax law or the intentional disregard of tax rules and regulations.
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What is civil fraud?
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The intention to cheat the government by deliberately understating tax liability.
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What is tax evasion?
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The willful and deliberate attempt to defraud the government by understanding a tax liability through illegal means.
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What is a tax return preparer?
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Any person who prepares returns (or who employs other people to prepare returns) for compensation, regardless of whether such person is a licensed attorney, certified public accountant, or enrolled agent.
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