L10 Fraud Awareness
What does IRS define as the primary elements required to assert Federal tax fraud?
A) Underpayment of tax and carelessness
B) Tax due and owing, and fraudulent intent
C) Failure to file and underreporting income
D) Incorrect tax calculations and missing records
B) Tax due and owing, and fraudulent intent
What does the term "return information" encompass in the context of IRS disclosure rules?
A) Only information directly from tax returns
B) Only information about a taxpayer's identity
C) A broad range of information gathered and used by the IRS for tax administration
D) Only information shared voluntarily by taxpayers
C) A broad range of information gathered and used by the IRS for tax administration
According to the lesson, what is the primary purpose of IRC ยง 7602(c)?
A) To increase tax collection rates
B) To protect taxpayers' business relationships and reputation
C) To simplify the audit process
D) To expand IRS investigative powers
B) To protect taxpayers' business relationships and reputation
Which of the following is NOT an eligible representative who can practice before the IRS?
A) Certified Public Accountant
B) Enrolled Agent
C) Enrolled Retirement Plan Agent
D) Bookkeeper
D) Bookkeeper
What is the general time frame for the Assessment Statute Expiration Date (ASED) on a tax return?
A) 2 years from the filing date
B) 3 years from the due date or filing date, whichever is later
C) 5 years from the due date
D) 10 years from the assessment date
B) 3 years from the due date or filing date, whichever is later
Which of the following is NOT one of the broad categories of affirmative acts in tax fraud?
A) Deceit
B) Subterfuge
C) Camouflage
D) Negligence
D) Negligence
Under IRC 7213A, what is the maximum fine for unauthorized inspection of tax information (UNAX)?
A) $500
B) $1,000
C) $5,000
D) $10,000
B) $1,000
How long must the IRS wait after issuing Letter 3164-E before contacting a third party?
A) 30 days
B) 45 days
C) 46 days
D) 60 days
C) 46 days
What form should be used to authorize an individual to receive and inspect confidential tax return information, but not appoint them as a representative?
A) Form 2848
B) Form 8821
C) Form 56
D) Form 1040
B) Form 8821
What happens if the Refund Statute Expiration Date (RSED) falls on a weekend or holiday?
A) It is moved to the previous business day
B) It remains on that date
C) It is extended to the next business day
D) It is automatically extended by 30 days
C) It is extended to the next business day
What is the standard of proof required in civil fraud cases?
A) Beyond a reasonable doubt
B) Preponderance of evidence
C) Clear and convincing evidence
D) Absolute certainty
C) Clear and convincing evidence
What is the CAP process used for in relation to disclosure?
A) Calculating tax penalties
B) Creating audit plans
C) Ensuring accurate determinations before disclosing confidential information
D) Conducting taxpayer interviews
C) Ensuring accurate determinations before disclosing confidential information
Which of the following is NOT one of the seven exceptions to the notice requirements of IRC 7602(c)?
A) Taxpayer authorizes the contact
B) Pending criminal investigation
C) Contacts with governmental entities
D) Contacts with tax preparers
D) Contacts with tax preparers
When processing a valid Form 2848, how quickly should the examiner forward a copy to the appropriate Service Center?
A) Within 24 hours
B) Within 3 business days
C) Within 1 week
D) Within 30 days
A) Within 24 hours
Which of the following does NOT typically extend or suspend the Collection Statute Expiration Date (CSED)?
A) Offer in Compromise
B) Collection Due Process hearing
C) Bankruptcy
D) Filing an amended return
D) Filing an amended return
Which of the following is an example of a legitimate tax reduction strategy?
A) Concealing bank accounts
B) Using false descriptions for income sources
C) Misrepresenting material facts
D) Using legal planning strategies to minimize tax liability
D) Using legal planning strategies to minimize tax liability
According to the Freedom of Information Act (FOIA), how long does the IRS have to respond to a valid request?
A) 10 days
B) 20 days
C) 30 days
D) 45 days
B) 20 days
What form should be used to document a taxpayer's authorization for a third-party contact?
A) Form 1040
B) Form 12175
C) Form 12180
D) Form 3949
C) Form 12180
Which of the following is NOT a tactic that an uncooperative representative might use to gain control of an examination?
A) Procrastinating
B) Failing to provide requested documents
C) Constantly questioning the need for certain information
D) Offering to pay for the examiner's lunch
D) Offering to pay for the examiner's lunch
What form is used to report a missed statute of limitations?
A) Form 1040X
B) Form 2848
C) Form 3999
D) Form 8821
C) Form 3999
What is the primary difference between the outcomes of civil and criminal fraud cases?
A) Civil fraud results only in monetary penalties, while criminal fraud can include imprisonment
B) Criminal fraud only results in fines, while civil fraud can include imprisonment
C) Civil fraud cases are always settled out of court, while criminal cases always go to trial
D) Criminal fraud cases never result in monetary penalties
A) Civil fraud results only in monetary penalties, while criminal fraud can include imprisonment
If an IRS employee discovers a disclosure incident, which of the following is NOT a required immediate action?
A) Report to their manager
B) Contact the Privacy, Governmental Liaison and Disclosure Incident Management Office
C) Notify the Treasury Inspector General for Tax Administration (TIGTA)
D) Issue a public statement about the incident
D) Issue a public statement about the incident
In a situation where there's a fear of reprisal, what should the IRS employee do when completing Form 12175?
A) Leave the form blank
B) Check the Reprisal Box but don't include the third party's name
C) Include all information as normal
D) Do not complete the form at all
B) Check the Reprisal Box but don't include the third party's name
Under what circumstances can an examiner bypass a power of attorney and contact the taxpayer directly?
A) When the taxpayer requests it
B) When the representative is on vacation
C) When there's a pattern of the representative impeding or delaying the examination
D) When the examiner prefers to work directly with the taxpayer
C) When there's a pattern of the representative impeding or delaying the examination
In fiscal year 2020, approximately how much revenue was lost due to barred assessments at the Field Examination level?
A) $7.6 million
B) $48 million
C) $55 million
D) $100 million
B) $48 million