Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
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.
3.
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.
4.
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.
5.
When a large tax bill looms, which of the following approaches is not likely to be successful?
Refusing to pay. The IRS is often willing to negotiate with citizens seeking to resolve an outstanding tax bill. A payment plan or other means of addressing the tax bill is most likely to be successful.
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.