1. The burden of proof remains on the taxpayer for corporations, trusts, and partnerships with net worth exceeding:
a. $1 million
b. $3 million
c. $5 million
d. $7 million
e. Some other amount
2. The IRS does not have to furnish the taxpayer with information concerning which of the following items?
a. The way the taxpayer’s return was selected for audit
b. The procedures for appealing an IRS ruling
c. The refund claims process
d. The IRS collection process
e. All of the above must be provided to the taxpayer
3. Both spouses are responsible, jointly and individually, for paying the full amount of any tax, interest, or penalties due on a joint return.
a. This does not apply to spouses who have divorced after the return was filed.
b. Spouses are responsible jointly but not individually.
c. Spouses are responsible individually but not jointly.
d. Innocent spouses may be relieved of the liability for tax, interest, and penalties.
e. None of the above.
4. A taxpayer’s rights are explained in:
a. Publication 5
b. Publication 17
c. Publication 556
d. Publication 1
e. None of the above
5. Taxpayers have the right to have an IRS examination take place at:
a. The IRS office
b. Any city of the taxpayer’s choosing
c. A neutral site
d. A reasonable time and place
e. None of the above
6. If a U.S. Tax Court agrees with the taxpayer on appeal that the IRS position was largely unjustified, which of the following is correct?
a. The taxpayer must still pay administrative and litigation costs.
b. The taxpayer may recover administrative but not litigation costs.
c. The taxpayer may recover litigation but not administrative costs.
d. To be eligible to recover some of the administrative and litigation costs, the taxpayer must have tried to resolve the case administratively, including going through the appeals process, and must have given the IRS the information necessary to resolve the case.
e. None of the above.
7. If the IRS owes a taxpayer a refund, the law generally provides that the IRS must pay interest on the refund if it is not paid within days of the date the tax-payer filed his or her tax return or claim for refund
a. 30
b. 45
c. 60
d. 90
e. None of the above
8. Glen’s taxable income is $50,000 and he pays income tax of $8,375. If his income were $60,000, he would pay taxes of $10,875. What is Glen’s marginal tax rate?
a. 18.23%
b. 17.87%
c. 15.00%
d. 25.00%
e. Some other amount
9. Melodie’s taxable income is $40,000 and she pays income tax of $5,863. If Melodie’s taxable income increases to $41,000, she would pay income taxes of $6,113. What is Melodie’s marginal tax rate?
a. 14.66%
b. 25.00%
c. 14.91%
d. 15.00%
e. Some other amount
10. Jim has a house payment of $2,000 per month of which $1,800 is interest and real estate taxes with the remaining $200 representing a repayment of the principal balance of the note. Jim’s marginal tax rate is 30 percent. What is Jim’s after-tax cost of his home mortgage payment?
a. $600
b. $540
c. $1,400
d. $1,460
e. Some other amount