Exercise Assignment | Online Assignment

Complete the following exercises and submit in a Word document with your last name in the title to the Dropbox.

1. Make a chart that distinguishes among the various types of examinations that the IRS conducts relative to individual income tax returns, namely, office, correspondence, field, and NRP audits. For this purpose, examine the following criteria:
a. Scope of review
b. Type of documentation that typically is required of the taxpayer
c. Use of IRS personnel time and other resources
d. Opportunity for agent to use professional judgment in resolving issues

2. Construct a scenario in which the tax adviser should recommend that the client terminate an IRS challenge with the following:
a. Lawsuit
b. Offer in compromise
c. Closing agreement
d. Appeals conference
e. Office audit
f. Correspondence audit

3. Rolanda filed her 2016 income tax return on April 4, 2017. On December 14, 2017, she learned that 100 shares of stock that she owned had become worthless in 2016. Because she did not deduct this loss on the 2016 return, Rolanda intends to file a claim for refund. This claim must be filed by no later than April 15 of what year?

4. Trish filed a valid extension for her 2017 tax return, giving her until October 15, 2018, to file her return. She filed her return on November 1 and paid $2,000 of tax due. For what period of time will Trish be subject to interest? For what period of time will Trish be subject to the failure-to-file and failure-to-pay penalties?

5. Anh, a calendar-year taxpayer subject to a 34 percent marginal tax rate, claimed a charitable-contribution deduction of $400,000 for a sculpture that the IRS later valued at $150,000. Compute the applicable over-valuation penalty.

6. Black Corporation estimates that its 2018 taxable income will be $800,000 and its tax liability will be $272,000. For each of the following independent cases, compute the minimum quarterly estimated-tax payments that will be required to avoid an underpayment penalty.
a. Black Corporation’s 2017 tax return showed taxable income of $700,000 and a tax liability of $238,000.
b. Black Corporation’s 2017 tax return showed a net loss and $0 tax liability for the year.