Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
When being questioned by the IRS during an audit, providing more information than is being asked for is an excellent strategy for winning.
False. The audit agent doesnt need that information, and he or she may even open up another investigation on you.
3.
Which of the following reasons for requesting an abatement of tax penalty is most likely to be accepted by the IRS as "reasonable cause"?
Destruction of your records by a flood, fire, or other catastrophe. Past history of tax payment or current unemployment are less likely to be acceptable reasons for an abatement than a catastrophic event such as a fire or flood.
4.
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.
5.
When it comes to collecting on back taxes, the IRS is more likely to take action to seize your primary residence if you have not cooperated with their efforts to collect back taxes.
True. The IRS will attempt to gain your cooperation in the payment of back taxes and will typically go after your residence only as a last resort if you are uncooperative.
6.
What is the purpose of an IRS audit?
To verify that the tax reported on a return is correct. There are different types of audits used.