Part 3 STUDY NOTES - USE THIS

Question 1

5 types of transactions in a tax shelter

Answer 1

Listed transactions
Confidential transactions
Contractual protection
Loss transactions
Transactions of interest

Question 3

Form 2848

Answer 3

Aware of the regulations in Circular 230.

Question 4

What 3 things are required for a power of attorney (Module 3)

Answer 4

SEE: Sign a consent to extend the statute of limitations, prepresent an individual at a conference, File a written response to the IRS on behalf of the individual.

Question 5

Form 8821 “Information”

Answer 5

SEE: Get information but NOT representing before the IRS.

Question 6

Where is a CAF used

Answer 6

SEE: CAF is used on a power of attorney (Not on the tax return)

Question 7

Over which juristdiction does the tax court have?

Answer 7

Determination of employment status, estate tax, gift tax, real estate investment trusts, certain levels of excise tax of public charities, and qualified pension and other retirement plans.

Question 8

What does the IRS send out before an initial in-person interview to determine or collect any taxes.

Answer 8

Publication 1 Your Rights as a Taxpayer

Question 9

Publication 5

Answer 9

Appeal and how to protest if you don’t agree

Question 10

Notice resulting in late payment of installment

Answer 10

SEE: 30 day notice to the cessation of the agreement

Question 11

How does a taxpayer get disqaulifed from bankruptcy discharging their tax liability

Answer 11

SEE: Being CONVICTED of tax evasion or fraudent tax activities.

Question 12

What has to happen and doesn’t have to happen for the IRS to seize property?

Answer 12

SEE: NOT - Audited
Must - have tax liability, 2 notices.

Question 13

When can and cannot Jeopardy levies be used?

Answer 13

SEE: When the collection of tax is at risk. They cannot be used when the property is perishable.

Question 14

When a taxpayer satisfies a tax lien, what does the IRS do?

Answer 14

SEE: Has 30 days to file a release of lien notice

Question 15

Which tax is discharged in bankruptcty?

Answer 15

SEE: Income tax is discharged in bankruptcy

Question 16

Can the IRS levy the state income tax refund?

Answer 16

SEE: Yes, IRS can take a state refund

Question 17

When the IRS Siezes property and sells it, how does it apply the proceeds?

Answer 17

SEE: First to the cost of collection, then to the tax debt.

Question 18

Approval from this person is required for the IRS to seize business property that is not in jeapordy

Answer 18

SEE: IRS area director or assistant area director

Question 19

Where is the US Tax court located?
Does it have jurisdiction over all federal taxes?

Answer 19

Washington DC
NO, it doesn’t have jurisdiction over all the federal taxes

Question 20

What happens when the IRS gives notice that the CDP (Collection Due Process) is frivolous?

Answer 20

SEE: EA has 30 days to withdraw or amend the CDP request in order to avoid the frivolous penalty.

Question 21

Can an automatic stay prevent a tax lien from going into effect?

Answer 21

YES.

Question 22

Form 656 (Jail Shade-picture)

Answer 22

Used to file offer and compromise

Question 23

Form 433-B

Answer 23

Collection of information for businesses, must be filed with 656

Question 24

Form 433-A

Answer 24

Collection of information for employers and self employed must be filed with form 656

Question 25

Form 872-A

Answer 25

Special consent Extend time to assess tax DOES NOT RELATE TO OFFER IN COMPROMISE

Question 26

What is cited as precedent in a tax court?

Answer 26

Revenue ruling

Question 27

Example of a secondary tax source

Answer 27

SEE: Text books

Question 28

Three classes of treasurery Regulations

Answer 28

SEE: temporary, proposed and final

Question 29

List 3 types of administrative legislation

Answer 29

SEE: Interpretive, procedural, and administrative

Question 30

Types of acceptable primary authority

Answer 30

SEE: Notices, court cases, and senate debates Also see: Temporary Regulation, Proposed regulation, and IRS Press Release ANOTHER SEE: Treaties or Treaty

Question 31

Give some examples of secondary authority

Answer 31

IRS Pubs, accounting journals and tax newsletters. Also see : IRC code that has been replaced.

Question 32

What should not be cited to sustain a position?

Answer 32

IRS PUB

Question 33

To show the the preparers' interpretation is in line with the intnet of the law, what should be cited?

Answer 33

SEE: COmmittee report = in line with the law.

Question 34

Which form of law transforms statutes into regulation and enforcement proceedures

Answer 34

SEE: Administrative tramsforms

Question 35

What is the proper order of heirarchy for treasurery regulations

Answer 35

SEE: Proposed, Temporary, Final

Question 36

What represents the conclusion of the IRS for an individual tax payer

Answer 36

SEE: Private Letter Ruling

Question 37

What is the most authoritative source of tax code?

Answer 37

SEE: IRC is the highest authority

Question 38

To find an IRS Opinion on a tax case, use this reference?

Answer 38

SEE: Internal Revenue Bulletin = research

Question 39

What authority do tax treaties fall?

Answer 39

SEE: Statutory authority for tax treaty

Question 40

Which of these can be cited to sustain a position? PLR, Announcements, General Counsel memorandum, or technical advice memorandum

Answer 40

SEE: Announcements are used to sustain a position.

Question 41

What's wrong with this statement: Treasury regulations provide an explanation to tax laws and have the force and effect of law.

Answer 41

SEE: False because they do not have force and effect of law.

Question 42

What explains the meaning of a statutory provision?

Answer 42

Interpretive Regulation

Question 43

Which court or office is bound by Treasury regulations?

Answer 43

SEE: IRS Appeals Office is bound by Treasury Regulations. NOT Courts

Question 44

How often is the Internal Revenue Bulletin published?

Answer 44

SEE: WEEKLY

Question 45

What is the tax code based?

Answer 45

Internal Revenue Code of 1986

Question 46

How are IRS Notices and Announcements identified?

Answer 46

SEE: By Year and Sequence Number

Question 47

E-File Level 2 infraction Level 3 Infraction Level 1 Infraction

Answer 47

SEE: Level 2 : 1 year suspension + the current year. Level 3 2 years. Level 1 = no suspension

Question 48

How are broadcast treated?

Answer 48

SEE: Broadcasts must be prerecorded and kept for 36 months from the date of the last transmission

Question 49

Statute of limitations in different scenarios

Answer 49

SEE: Do not report income, and it's 25% of the gross income on the return = 6 years. Fraud = no limit. Do not file = no limit. Worthless securities = 7 years.

Question 50

What is important about RAL = Refund anticipation loans

Answer 50

SEE: The IRS has NO INVOLVEMENT and are not responsible for interest accrued because of a delayed refund. All parties must ensure that taxpayers understand that RALs are interest bearing loans

Question 51

Form 8453 and form 8332

Answer 51

SEE: Mailed within 3 business days after the return is acknowledged as accepted by the IRS, Form 8453 and 8332

Question 52

Give 1 example of a secondary provider and 3 primary provider for e-file

Answer 52

SEE: Secondary = Online provider, PRIMARY = TRANSMITTER, ERO, & REPORTING AGENT.

Question 53

Can an ERO assist a taxpayer in applying for a RAL?

Answer 53

SEE: EROS's can assist taxpayers in applying for RAL

Question 54

What is Dictum?

Answer 54

SEE: The court's opinion that is not binding and enforceable

Question 55

How do you calculate the 25% gross income that increases the statutes of limitations the IRS can look at records?

Answer 55

SEE: Gross income means all income gross receipts, capital gains, before expenses (Including COGS)

Question 56

What is in the IRS Bulletin and 1 thing that isn't?

Answer 56

SEE: Executive orders, Tax Conventions, and treasury decisions, and court decisisons NOT - IRS PUBS. They are stand alone

Question 57

What is sneaky about the EFTPS payment

Answer 57

SEE: Taxpayer must make sure funds are available

Question 58

What is the difference between a technical memo and a technical advice memorandum?

Answer 58

SEE: Tech memo traces the history. Tech adv memorandum is for one tax payer.

Question 59

How powerful are procedural regulations, interpretive regulations, and legislative regulations?

Answer 59

SEE: Procedural regulations have the full force and effect of law when describing operations in filing forms. Interpretational regulations do not have the full force and effect of law. Legislative regulations have the full effect and foce of the law in a different area

Question 60

What is the power of revenue rulings?

Answer 60

SEE: They are NOT the full force and effect of the law. They set precedent.

Question 61

What happens to the client confidentiality priviledge when the tax payer is involved in a criminal tax proceeding

Answer 61

SEE: Client confidentiality privelged is lost

Question 62

List 2 sources of evidence in a hearing and one that is not permitted

Answer 62

SEE: Exhibits and despositions are permitted. LETTERS ARE NOT

Question 63

Power of Treasurery decisions?

Answer 63

SEE: Treasury Decisions are used to sustain a position. They are published in IR Bulletin.

Question 64

Important details of POA?

Answer 64

SEE: IRS accepts copies, it doesn't have to be signed. Form 2848 can be used to appoint an AFSP to act as TP representative before agents and examining officers of the Examination Division of IRS.

Question 65

Which Title contains the IRC?

Answer 65

SEE: Title 26 contains IRC

Question 66

What is true about Final Regulations, Temporary Regulations, Treasurery Decisions, and Treasurery Regulations?

Answer 66

SEE: Temporary regulations = 3 years max, Final reg = adoption after public comment on propsed versions. Not all code sections have treasury Regulations. TREASURY FINAL = DOCUMENT describing the finalization of final regulations.

Question 67

Describe the e-file process.

Answer 67

SEE: Software developer makes the software. Reporting agent orginates electronic submission to the intermediate service provide who sends it to the tramsitter

Question 68

When it comes to keeping the 8879 why is the word ONLY important?

Answer 68

SEE : 8879, AND a copy of the return.

Question 69

Form 8821

Answer 69

SEE: FORM 8821 Request for taxpayer information. IT IS NOT A POA!

Question 70

What must a new representative do who is SUBSTITUTING for a POA.

Answer 70

SEE: Substitution = - new POA must file a declaration with the appropriate IRS office.

Question 71

Can a CAF be assigned to a financial advisor?

Answer 71

SEE: Yes, CAF to Financial advisor and attorney who files POA/s

Question 72

Can an EA represent a tax payer in court.

Answer 72

SEE: No, an EA cannot represent a taxpayer in District, Bankruptcy or

Question 73

Can a tax payer represent himself at a conference and need to sign a written appeal?

Answer 73

SEE: Written appeals require a signature and the tax payer can represent himself in the appeals conference.

Question 74

Conditions for the IRS to enter into a guaranteed installment payment plan?

Answer 74

SEE: File all tax returns, paid all tax in prior years, no installment agreement in the past 5 years. The liability must be below $10,000