Tax Liability Quiz

What is the main goal for taxpayers with few assets and little income prospect regarding their tax liability?

• To pay the full amount

• To strike a settlement for less than the full amount

• To avoid paying taxes

• To increase their assets

What type of start is provided to taxpayers according to the document?

• A fresh start.

• A new start.

• A clean start.

• A renewed start.

How many grounds are there for the IRS to compromise tax liability?

• A) One

• B) Two

• C) Three

• D) Four

Which payment option is payable over the number of years remaining in the statute of limitations on collection?

• A cash, lump sum offer

• A short-term periodic payment offer

• A deferred periodic payment offer

• A long-term periodic payment offer

Which payment option is usually payable within a short period of time?

• A cash, lump sum offer

• A short-term periodic payment offer

• A deferred periodic payment offer

• A long-term periodic payment offer

Under what condition may the user fee be refunded?

• If the IRS accepts the offer based on effective tax administration.

• If the IRS rejects the offer.

• If the offer request is incomplete.

• If the taxpayer requests a refund.

For which type of offers does the IRS waive the down payment requirement?

• A) Offers based on doubt as to liability

• B) Offers based on doubt as to collectibility

• C) Offers based on future income

• D) Offers based on current expenses

To process an offer in compromise, the IRS requires the taxpayer to have:

• Filed all required tax returns and paid the necessary estimated taxes.

• Filed some of the required tax returns.

• Paid only a portion of the estimated taxes.

• Ignored the application process.

To process an offer in compromise, the IRS requires the taxpayer to:

• Be in bankruptcy.

• Complete the application in full.

• Have unpaid tax returns.

• Ignore the required payments.

What must occur before the IRS can reject an OIC?

• An independent administrative review

• A court hearing

• A public announcement

• A meeting with the TP