CHAPTER 17—TAX PRACTICE AND ETHICS

2004. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #11
Maureen, a calendar year taxpayer subject to a 35% marginal tax rate, claimed a Form 1040 charitable contribution deduction of $250,000 for a sculpture that the IRS later valued at $200,000. The applicable overvaluation penalty is:

a. $17,500.
b. $14,000.
c. $3,500.
d. $0.

2005. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #12
Ron, a calendar year taxpayer subject to a 35% marginal tax rate, claimed a Form 1040 charitable contribution deduction of $250,000 for a sculpture that the IRS later valued at $150,000. The applicable overvaluation penalty is:

a. $0.
b. $7,000.
c. $10,000 (maximum penalty).
d. $14,000.

2006. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #13
Gloria, a calendar year taxpayer subject to a 35% marginal income tax rate, claimed a Form 1040 charitable contribution deduction of $800,000 for a sculpture that the IRS later valued at $100,000. The applicable overvaluation penalty is:

a. $245,000.
b. $98,000.
c. $49,000.
d. $10,000 (maximum penalty).

2007. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #14
George, a calendar year taxpayer subject to a 45% marginal gift tax rate, made a gift of a sculpture to Redd, valuing the property at $100,000. The IRS later valued the gift at $140,000. The applicable undervaluation penalty is:

a. $7,200.
b. $3,600.
c. $1,000 (minimum penalty).
d. $0.

2008. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #15
Leroy, who is subject to a 45% marginal gift tax rate, made a gift of a sculpture to Marvin, valuing the property at $150,000. The IRS later valued the gift at $400,000. The applicable undervaluation penalty is:

a. $0.
b. $22,500.
c. $25,000 (maximum penalty).
d. $45,000.

2009. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #16
Juanita, who is subject to a 45% marginal gift tax rate, made a gift of a sculpture to Bianca, valuing the property at $150,000. The IRS later valued the gift at $300,000. The applicable undervaluation penalty is:

a. $27,000.
b. $13,500.
c. $10,000 (maximum penalty).
d. $0.

2010. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #17
The special tax penalty imposed on appraisers:

a. Is waived if the taxpayer also was charged with his/her own valuation penalty.
b. Applies if the appraiser knew that the appraisal would be used in preparing a Federal income tax return.
c. Equals 10% of the appraised value of the property, with a $5,000 minimum penalty.
d. Can be as much as 200% of the appraisal fee that was charged.

2011. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #18
Concerning the penalty for civil tax fraud:

a. Fraudulent behavior is more than mere negligence on the part of the taxpayer.
b. The burden of proof to establish the penalty is on the government.
c. The penalty is 100% of the underpayment.
d. Fraud is defined in Code §§ 6663(b) and (f).

2012. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #19
Concerning a taxpayer’s requirement to make quarterly estimated tax payments:

a. An individual must make estimated payments if his or her balance due for the Federal income tax for the year will exceed $1,000.
b. The due dates of the payments for a calendar-year C corporation are March, June, September, and December 15.
c. A C corporation must make estimated payments if its Federal income tax liability for the year will exceed $250.
d. A trust is not required to make estimated payments.

2013. CHAPTER 17—TAX PRACTICE AND ETHICS Question MC #20
Mickey, a calendar year taxpayer, was not required to file a 2010 Federal income tax return. During 2011, his AGI is $120,000 and his tax liability is $20,000. To avoid a penalty for tax underpayments for 2011, Mickey must make aggregate estimated tax payments of at least:

a. $0.
b. $1,000 (minimum amount).
c. $18,000.
d. $20,000.