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Flashcards in chapter 4 Deck (18):
1

Tax authority

comes from all three branches of government
-legislative
-judicial
-administrative-

2

Legislative Authority- Congress

Sources of statutory authority include:
The consititution
The IRC
treaties
Committee reports from the different committees

3

Administrative authroity- Treasury Department and Internal Revenue Service

Proposed- have to be issued and proposed for 30 days before becomming final.
Temporary- have the effect of law but only for 3 years
Final- Until revoked they are the law

4

Judicial Authority

US Tax Court- most large cases- no jury, don't have to pay first
US District Court- jury availabble and must pay first then sue
US Court of Federal Claims- must pay first then sue, One court in DC and no jury is available
US Tax court-small claims- $50000 or less and no appeals
Appellate- hears appeals from district courts and tax court

5

Statute of Limitations-

6 years if the ommission was more than 25% of gross income stated on return
none for fraud
3 years if below 25% of gross income on return

6

No change report issued

Cannot reopen the case unless their is fraud

7

Sign return- penalty

$50 per return or up to $25k in one year

8

willful attempt to misstate tax liability

greater of $5000 or 50% of the income earned from reterun

9

knowingly disclosing tax information

fine of $1000 and one year in prision

10

prepares a return with an unreasonable position

greater of $1000 and 50% of income earned

11

refund form= 1040X

must be filed within 2 years from payment of tax or 3 years from the date of filed return

12

non filing penalities

5% per monthh of the amount of tax due
max penalty is 25% of the tax due
and min is $135 or 5% a month

13

failure to file is fraudulent is

15% per month of tax due with a max of 75% of the tax due

14

estimated payments- individuals

100% of PY taxes or 90% of current year
if AGI is over 150k then it increases to 110%

15

Corporate estimated payments

100% of current year
100% of prior year or
annualization method

16

accuracy penalties

20% of the tax due if not intentional

17

Substantial or gross misstatement

20% of tax due for substantial misstatement
40% for gross misvaluation

18

fraud penalty

75% of the amount misstated
and interest of 50% on the amount not paid