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1.
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.
2.
If you run a business and transact it with cash, the IRS wont ever know.
False. Though you might fly under the radar, certain behaviors on your part may cause you to stand out and be suspicious.
3.
Why is the home office deduction an audit flag?
Office space often gets used for personal purposes. Personal use invalidates its purpose as home office space.
4.
A tax levy _______.
Seizes property in order to satisfy a tax debt. A levy is used when there are no other alternatives to get back taxes paid.
5.
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.
6.
Which type of IRS audit takes place by mail?
Correspondence audit. This type of audit usually asks you to clarify something on your return.