BU404 Midterm Review Day 2

After her divorce, Hope continues to support her ex-spouse’s sister, Cindy, who does not live with her. Hope can claim Cindy as a dependent.

• True

• False

If an individual does not spend funds that have been received from another source (e.g., interest on municipal bonds), the unexpended amounts are not considered for purposes of the support test.

• True

• False

When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as a dependent.

• True

• False

As opposed to itemizing deductions from AGI, the majority of individual taxpayers choose the standard deduction.

• True

• False

An above-the-line deduction refers to a deduction for AGI

• True

• False

Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.

• True

• False

Which Regulations have the force and effect of law?

• Procedural Regulations

• Finalized Regulations

• Legislative Regulations

• Interpretive Regulations

Which of the following is the lowest authority in the Federal tax law system?

• Revenue Ruling.

• Proposed Regulation.

• Interpretive Regulation.

• Revenue Procedure.

As a matter of administrative convenience, the IRS would prefer to have Congress decrease (rather than increase) the amount of the standard deduction allowed to individual taxpayers.

• True

• False

Even though a client refuses to correct an error on a past return, it may be possible for a practitioner to continue to prepare returns for the client.

• True

• False