Unformatted text preview: Federal Tax Research, Eighth Edition Page 1-25 TEST BANK, Chapter 1 Multiple Choice Choose the best answer for each of the following questions. 1. Under the Statements of Standards for Tax Services, if an accountant ﬁnds that a taxpayer has
intentionally or otherwise underpaid income taxes for a previous tax year, a. The member should refuse to sign the return.
b. The member must report it immediately to the IRS.
c. The member must advise the taxpayer of the omission.
d. The member is not expected to address issues related to prior year returns.
e. None of the above.
B 2 Tax evasion is:
3/ a. Legally minimizing taxes.
b. Illegally minimizing taxes.
c. The same as tax avoidance.
(1. None of the above.
A 3. Circular 230 is a publication of:
a. The Internal Revenue Service.
b. The American Institute of CPAs.
c. The American Bar Association.
d. The Securities Exchange Commission.
e. None of the above. According to the text, the primary purpose of effective tax planning is:
a. Eradicating the tax entirely. b. Deferring the receipt of income. 0. Converting ordinary income into capital gain. (1. e. lfm
g Eliminating tax in the current year.
Minimizing tax liability. ,M
g: 5. Under Circular 230, who may not practice before the Internal Revenue Service?
b. Certiﬁed Public Accountants.
0. Enrolled Agents.
d. Enrolled Actuaries.
e. Real Estate Appraisers.
1% ,/ 6. The AICPA Code of Professional Conduct consists of two sections. These are:
V! a Principles and Rules. b. Concepts and Rules. 0. Principles and Concepts. d. Interpretations and Rules. e. Interpretations and Concepts. 7. The Statements on Standards for T ax Services are issued by:
a The Internal Revenue Service. The American Institute of CPAS. The American Bar Association. The Securities Exchange Commission. b.
6. None of the above. ...
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- Fall '10