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1.
Which type of IRS audit takes place by mail?
Correspondence audit. This type of audit usually asks you to clarify something on your return.
2.
The IRS can seize your bank account if you owe back taxes.
True. However, this seizure is a last resort and can be avoided if you cooperate with the IRS.
3.
To support your tax deduction for business use of your vehicle, you will need to _______.
Document how you use the vehicle. The IRS requires that you keep a log of your use.
4.
When considering your options for dealing with a tax bill that you cant pay, remember that _______ will be added to your tax bill until it is resolved.
Interest and penalties. Although the IRS may be willing to negotiate a settlement of your tax bill, there will generally be added penalties and interest charged for the unpaid balance.
5.
If a tax preparer promises to get you a big refund without having seen any of your documents, why might that be cause for concern?
Both of the above. The preparer might do both of these, if not either. Take such promises with a lot of caution.
6.
When the IRS completes an audit of a taxpayer, what can the taxpayer do to appeal the IRS findings?
All of the above. These are the steps, usually followed in order, that a taxpayer would follow to appeal the results of an audit. This process is successful in lowering the tax bill for about half of those who contest the audit report.