Federal Tax Procedures

Question 1

What is the more-likely-than-not standard?

Answer 1

The more-likely-than-not standard involves a position that has a more than 50 percent chance of succeeding

Question 2

What is the substantial authority standard?

Answer 2

The substantial authority standard involves a position that has a more than one-in-three chance, but a less than 50 percent chance of succeeding.

Question 3

What is the reasonable basis standard?

Answer 3

The reasonable basis standard involves a position that is arguable but fairly unlikely to prevail in court. A numerical statement of this standard has at least a 20 percent chance of succeeding.

Question 4

An accuracy-related penalty applies to the portion of tax underpayment attributable to

Answer 4

1) negligence or disregard of tax rules and regulations

2) any substantial understatement of income tax

Question 5

How long does a taxpayer have to file a petition with the Tax Court for a redetermination of a tax deficiency?

Answer 5

Upon receipt of a notice of deficiency from the IRS, the taxpayer has 90 days to pay the deficiency or file a petition with the Tax Court for a redetermination of the deficiency

Question 6

What is the penalty for failure to file a tax return?

Answer 6

The penalty for failure to file a tax return by the due date is 5% per month or fraction of month (up to a maximum of 25%) on the amount of tax shown as due on the return. The penalty for failure to pay by the due date (1/2% per month) is also based on the amount due on the return.