Multiple Choice Questions

1. A taxpayer who intentionally fails to report two items of income over a two-year period may be subject to possible maximum prison sentence of how many years?

a. 5.

b. 10.

c. 15.

d. None of these.

2. Which of the following applies to a taxpayer who files a fraudulent tax return and then, as a matter of conscience, immediately files a correct and honest amended return?

a. Protected from prosecution after filing the amended return.

b. Protected from prosecution if the IRS accepts the amended return.

c. Protected from prosecution after a two-year waiting period.

d. None of these.

3. When does the IRS normally bring actions for civil penalties?

a. Before it brings actions for criminal penalties.

b. During the time it brings actions for criminal penalties.

c. After it brings actions for criminal penalties.

d. After it brings actions for criminal penalties, but only in some districts.

4. A married couple files a joint federal return in which $10,000 in underpaid taxes is due. One spouse signs the return without understanding it. If the other spouse responsible for the tax preparation disappears without paying the $10,000, which of the following could be the other spouse’s fate?

a. Could avoid paying all or part of the taxes per IRC § 7201 as an innocent spouse.

b. Could be held fully liable for the $10,000.

c. Could be held liable for one-half of the $10,000.

d. Could be held liable for 75 percent of the $10,000

5. Which option is likely for a taxpayer with no knowledge of tax laws who files a personal federal tax return and claims depreciation on the big-screen television in his living room?

a. Could be charged with fraud.

b. Could be charged with fraud if a prosecutor could prove motive.

c. Could be charged with fraud if a prosecutor could prove willful intent to make the depreciation deduction.

d. Could not be charged with fraud.