CHAPTER 4 - CHAPTER 4 EXAMINATION OF RETURNS 1. Answer:...

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CHAPTER 4 EXAMINATION OF RETURNS 1. Answer: Generally, it is not advisable for a taxpayer to request that an audit be moved from a tax compliance officer to a revenue agent. The grade level and expertise as well as the technical depth at the tax compliance office is not as probing as that of the revenue agent. 2. (A) Answer: Careful consideration has to be given to (1) whether the tips were previously reported as income, (2) the truth and veracity of the taxpayer, (3) the ability to substantiate the taxpayer’s claim of cash on hand as well as the plausibility of the claim, and (4) whether the wife’s wages and “cash tips were properly reported as gross income. (B) Answer: The revenue agent will ask for substantiation and generally will not accept the taxpayer’s word for it. (C) Answer: Under Code Sec. 7491, the taxpayer must submit “credible evidence before the burden of proof is placed upon the IRS. (D) Answer: Yes. See Chapter 19.
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CHAPTER 4 - CHAPTER 4 EXAMINATION OF RETURNS 1. Answer:...

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