1947. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #1 The tax professional can do more than just tax compliance work. He or she can work with the client in consultation over the strategy and tactics of dealing with a Federal tax audit.a. Trueb. False1948. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #2 The IRS employs almost 90 000 personnel making it one of the largest Federal agencies.a. Trueb. False1949. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #3 Recently the overall Federal income tax audit rate for individual returns has been about 3%.a. Trueb. False1950. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #4 The IRS targets high-income individuals for an audit rate that is about double that of the general populace.a. Trueb. False1951. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #5 IRS computers use document matching programs for both individuals and business taxpayers to keep the audit rate low.a. Trueb. False1952. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #6 The “IRS’ attorney” is known as the Chief Counsel.a. Trueb. False1953. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #7 One of the four operating divisions of the IRS deals exclusively with manufacturing and exporting businesses.a. Trueb. False1954. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #8 In a letter ruling the IRS responds to a taxpayer request concerning the tax treatment of a proposed transaction.a. Trueb. False1955. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #9 An IRS letter ruling might determine that an employee’s compensation is unreasonable in amount.a. Trueb. False1956. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #10 A letter ruling is issued by the IRS at no charge.a. Trueb. False1957. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #11 The IRS can require that the taxpayer produce its financial accounting records to determine if taxable income is computed correctly.a. Trueb. False1958. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #12 When a tax issue is taken to court the burden of proof is on the taxpayer to show that the items reported on the return are correct.a. Trueb. False1959. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #13 When the IRS issues a notice of tax due the taxpayer has 30 days to either pay the tax or file a petition with the Tax Court. This is conveyed in the “thirty-day letter.”a. Trueb. False1960. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #14 An “office audit” takes place at the headquarters office of the corporate taxpayer.a. Trueb. False1961. CHAPTER 17—TAX PRACTICE AND ETHICS Question TF #15 After a tax audit the taxpayer receives the Revenue Agent’s Report as part of the “90-day letter.”a. Trueb. False
