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Worksheets2025 GL1 TEST FINAL GAME
Total questions: 87
Worksheet time: 44mins
Which situation first requires a statutory notice of deficiency to be provided to the taxpayer before the IRS may assess?
Math error on a filed return
Balance due shown on a filed return
An employment tax liability
None of the above
Generally, how long does the Service have to initiate an administrative levy, or file a lawsuit, to collect a liability after it is assessed?
3 years.
5 years.
10 years.
20 years.
The definition of “overpayment” is found in:
Case law
Statute
Regulation
Revenue Procedure
A summons is enforceable if...
it is issued for a legitimate, proper purpose
it seeks information that is or may be relevant to the investigation and is not already in the IRS’s possession
the IRS has followed all administrative steps required by the Code
all the above
What is the statute of limitations for assessment if the T/P does not file a return?
A. 2 years from the date the return was due
B. 3 years from the date the return was due
C. 3 years from when the IRS prepares a section 6020(b) substitute for return
D. None of the above
Written approval by Area Counsel is required for all jeopardy assessments.
A. True
B. False
One of the two valid defenses for failing to honor a levy is that the person is not in possession of property of the taxpayer.
True
False
The IRS has the authority to abate the unpaid portion of an assessed tax if:
A. The tax is excessive in amount.
B. The tax is assessed after the expiration of the Assessment Statute Expiration Date (“ASED”).
C. The tax is erroneously or illegally assessed.
D. All of the above.
A certified transcript (i.e., Forms 2866 and 4340) constitutes presumptive evidence of a valid assessment.
A. True
B. False
A Notice of Federal Tax Lien (“NFTL”) must be filed in order for the federal tax lien to have priority over any other interest.
A. True
B. False
A taxpayer cannot dispute his or her underlying tax liability in a CDP Tax Court case when he or she failed to properly raise the issue during the Appeals hearing.
True
False
A summons issued to someone other than the taxpayer under examination is a…
First-party summons
Designated summons
Unauthorized summons
Third-party summons
A taxpayer must first file a refund claim before the IRS has the authority to refund an overpayment.
True
False
How many days after a notice of final partnership adjustment (FPA) is mailed can the IRS make an assessment?
30 days if no petition is filed
60 days if a petition is filed
90 days if no petition is filed
120 days if a petition is filed
What is the main difference between an informal refund claim and a protective refund claim?
Protective refund claims preserve the taxpayer's right to claim a refund when the amount of the refund claimed is contingent on future events, whereas informal refund claims are not necessarily all based on a contingent future event.
Protective refund claims are the only types of refund claims that protect a taxpayer’s ability to later sue for refund, whereas informal refund claims do not.
Protective refund claims entitled a taxpayer to overpayment interest if allowed, whereas informal refund claims do not.
The IRS may waive the formal rules of a protective refund claim, whereas the IRS cannot do so for an informal refund claim.
Which one of the following is not a mandatory offset for a refund (i.e., a statutory reduction of the amount of a refund)?
Crediting some or all of the overpayment against the taxpayer's past-due child support.
Crediting some or all of the overpayment against the taxpayer's debts owed to federal agencies.
Crediting some or all of the overpayment against the taxpayer's past-due legally enforceable state income tax obligations.
Crediting some or all of the overpayment against the taxpayer’s unpaid federal income tax liabilities.
Who should be listed on the “In the matter of” line on a summons?
Taxpayer’s power of attorney
Any IRS employee
The taxpayer whose liability is under examination
The summoned party
When must the IRS give notice of a third-party summons?
Within three days of the day on which the summons is served
Within 20 days of the day on which the summons is served
Before the summoned party responds
Before serving the summons
The IRS must provide how many days advance notice to a taxpayer under examination before contacting a third party?
30
45
365
20
If the United States was properly named in the suit for a judicial sale and the NFTL was filed, which of these answers is correct about the effect of the sale on the senior federal tax lien?
The sale is subject to the FTL.
The sale discharges the FTL.
Which of the following must occur prior to levy generally?
a. Assessment
b. Notice and demand for payment, followed by failure to pay in full within 10 days
c. 30 day written notice of intent to levy
d. CDP notice provided under Section 6330
e. All of the above
If at all possible, a summons issued to a person should be served by
Leaving it at their place of employment
Mailing it to their last and usual place of abode
Hand delivery
Left with their neighbor
To which of the following taxes does I.R.C. § 6901 apply?
Excise
Income
Trust Fund Penalty
Estate
All of the above
After the Service files a Alter Ego NFTL, the Alter Ego has the right to request a CDP hearing.
True
False
A nominee lien attaches to all property of the nominee.
True
False
The following are factors that favor a finding of alter ego:
Co-mingling personal and corporate assets.
Incurring liabilities for which there is no hope of repayment
Failure to follow corporate formalities
(A) and (C) only
What type of levy is the Chief Counsel (or his delegate) required by statute to approve in writing?
Jeopardy levy
Special condition levy
Levy on a domestic branch of a foreign bank
Continuous wage levy
Which of the following is not a prerequisite to the creation of the federal tax lien?
Assessment of the tax (or liability).
Notice and demand for payment.
Failure to pay the tax (or liability).
Filing a Notice of Federal Tax Lien.
When the federal tax lien is created, on what date is it treated as arising?
The date the tax return was filed.
The date the tax return was due (without extensions).
The date the tax (or liability) was assessed.
The date notice and demand for payment was issued.
The issuance of CDP rights, either for a review of lien matter or for review of a levy matter, must actually be received by the taxpayer in order to be valid.
True
False
What is the consequence if notice and demand for payment is issued after the 60-day time period provided by I.R.C. § 6303?
The assessment is invalid.
The federal tax lien does not arise until notice is given, but it relates back to the date of assessment.
The federal tax lien arises on the date notice is given, not the date of assessment.
The CSED is not suspended during which of the following?
Collection due process hearings (and appeals therefrom).
A pending bankruptcy case.
A pending offer in compromise or installment agreement.
An installment agreement that has been accepted and is ongoing.
The estate tax lien under I.R.C. § 6324(a) and the gift tax lien under I.R.C. § 6324(b) replace the general tax lien under I.R.C. § 6321 in the specific cases of estate tax liability and gift tax liability, respectively.
True
False
A taxpayer may not dispute a verification issue in a CDP Tax Court case when he or she failed to properly raise that issue during the Appeals hearing.
True
False
The correct response to an untimely filed CDP petition is a motion to dismiss for lack of jurisdiction.
True
False
A challenge to the validity of an assessment is a challenge to the existence or amount of the liability that might be precluded by section 6330(c)(2)(B).
True
False
What are the two types of trust fund taxes?
Excise and Income
Employment and Income
Employment and Excise
There are no exceptions to the requirement that the Service issue CDP (lien) rights to a taxpayer after the first filing of a NFTL for a particular assessed liability.
True
False
Section 6672 (TFRP) holds third-party responsible persons liable for what percentage of the unpaid trust fund taxes?
25%
50%
75%
100%
What is the most important factor that courts consider when making a determination about whether someone qualifies as a responsible person?
Significant control over a company’s finances
Check signing authority
Hiring and firing authority
Making the federal tax deposits
The IRS must send a responsible person notice prior to making an assessment under section 6672.
True
False
The Letter 1153 is a responsible person’s ticket to tax court in a case brought under section 6672.
True
False
What code section applies when a person directly pays net wages to someone else’s employees and the employer fails to remit trust fund taxes to the government?
6672(a)
3505(a)
6672(b)
3505(b)
All taxpayers that file a Form 1065 are subject to BBA?
True
False
Which of the following best describes a Certificate of Release under IRC § 6325(a)?
A. Removes the lien from specific property only
B. Extinguishes the federal tax lien in its entirety
C. Removes the NFTL from public records but retains the lien
D. Cannot be revoked once issued
Which of the following is NOT a valid ground for lien discharge under IRC § 6325(b)?
The lien has expired due to the running of the CSED
Property has no value to the IRS
IRS is paid value of its interest in property
Property is sold and proceeds are held subject to lien
What is the effect of a Certificate of Withdrawal under IRC § 6323(j)?
Extinguishes the federal tax lien
Removes the NFTL record but not the underlying lien
Removes the lien from one property only
Transfers the lien to proceeds
Which of the following best describes the effect of a certificate of subordination under I.R.C. § 6325(d)?
It removes the federal tax lien from the property
It defers the collection of the underlying tax liability
It allows another creditor to move ahead of the federal tax lien in priority
It eliminates the underlying tax debt in exchange for partial payment
A self-release certificate on a NFTL becomes effective (operates as a release) when:
The CSED expires
The taxpayer requests it
The IRS fails to refile the NFTL during the refiling period under I.R.C. § 6323(g)
The IRS releases the lien via CDP hearing
Which of the following is TRUE regarding a Certificate of Nonattachment?
It can be issued only if taxpayer consents
It extinguishes the lien
It applies where someone is mistakenly affected by NFTL due to name similarity
It is irrevocable
Does the Code provide that some competing interests will have priority over a federal tax lien even if the interest arises after the filing of a Notice of Federal Tax Lien?
No, filing a NFTL means the federal tax lien will always have priority over any interest arising after assessment.
Yes, in certain circumstances an interest that arises after the filing of a NFTL will have priority over the federal tax lien.
Yes, if the party claiming priority has no knowledge of the NFTL.
No, the federal tax lien always has priority.
Does someone holding an interest in an escrow account arising after the filing of a NFTL, but without notice or knowledge of the filing, have priority over federal tax lien?
Yes, because the person has no notice or knowledge of the NFTL
No, because the NFTL has been filed
Yes, assuming she paid adequate and full consideration for the interest in the escrow account
No, because she is not the purchaser of a security
Elaine purchases new soup pots from an antique shop for $500, the owner just bought them from a famous soup restaurateur. She has no notice or knowledge of the NFTL already filed against the soup restaurateur. Who has priority, Elaine or the IRS, and why?
Elaine, because she is purchasing items in a casual sale for less than $1,000
The IRS, because the NFTL was filed before Elaine purchased the items
Elaine, because she purchased the items without notice/knowledge of the NFTL
The IRS, because Elaine purchased the items at resale
A jeweler repairs a diamond ring for $5,000. The jeweler retains continuous possession of the ring until her lien is satisfied. The IRS has already filed a NFTL, and the tax lien has attached to the ring. The jeweler is aware of the NFTL. Does the jeweler have a priority over the tax lien with respect to the $5,000 repair bill?
Yes, assuming the repair cost is reasonable and the jeweler has the right to retain possession as security for payment under local law
No, the jeweler’s knowledge of the NFTL defeats any possible claim of priority
No, the tax lien arose before the jeweler began repairing the ring and therefore the tax lien has priority
No, because $5,000 is an unreasonable amount
Which of the following superpriorities is defeated by actual notice or knowledge of the federal tax lien?
Attorneys’ liens.
Personal property purchased in a casual sale.
Personal property purchased at retail.
Residential property subject to a mechanic’s lien for repairs and improvement.
William needs cash and sells his Ford Fiesta to his friend Milton. The engine is acting up and William offers to fix the car, so Milton leaves the car with William. Milton then discovers the IRS has a tax lien against William. Who has priority, Milton or the IRS?
a. The IRS, because it made the assessment against William before selling the car to Milton.
b. Milton, because he was unaware of the tax lien when he bought the car.
c. The IRS, because Milton discovered the existence of the tax lien after giving the car back to William to repair the engine.
d. Milton, because the NFTL was filed before the car was sold to Milton.
In a state where a spouse’s interest in property held in a tenancy by the entirety is extinguished upon death and the spouse owing taxes dies first, will the federal tax lien remain on the property?
a. Yes, the federal tax lien attached to the taxpayer spouse’s interest in the property before death.
b. No, the federal tax lien never survives the death of the taxpayer spouse.
c. Yes, the non-liable spouse would be considered a transferee.
d. No, the taxpayer spouse no longer has an interest in the property by reason of state law.
At the time of death, Chris owns a Porsche, gold pinky ring, and vintage golf clubs. The Porsche and ring pass to his children via trust but the golf clubs are included in the probate estate. If the IRS makes an assessment against Chris’s estate, to what property will the lien attach?
a. The Porsche, ring, and golf clubs because Chris owned all the items at his death.
b. Only the Porsche and the ring because they passed via trust.
c. Only the golf clubs because they are included in the probate estate. ü
d. Nothing because the IRS made the assessment after death.
If a taxpayer’s assets are involved in a probate proceeding, is the IRS allowed to take administrative collection actions?
No, once the court obtains control and custody of the assets, the IRS cannot take any administrative collection actions.
Yes, if administrative collection would not interfere with the court’s work.
Yes, assuming the federal tax lien has attached to the property at issue.
Both B and C.
A case is referred to DOJ. If the case contains only commonplace issues, then it should be designated:
A. Standard, b/c it is default for normal cases and DJ can settle without consulting Counsel
B. Standard, b/c it is default for normal cases, and DJ can only settle such cases with Counsel’s recommendation
C. SOP, b/c it is default for normal cases and DJ can settle without Counsel.
D. SOP, b/c it is default classification for normal cases and DJ can only settle w/Counsel approval
One of the differences between an offer in compromise and an installment agreement is that:
A. An I/A is a contract
B. An I/A can only be for full payment
C. An accepted OIC settles the liability.
D. The Service automatically accepts all I/As
General Counsel for Treasury or his delegate must review acceptance of a proposed OIC when the unpaid liabilities (including tax, penalties, and interest) are greater than or equal to what amount?
a) $50,000
b) $100,000
c) $5,000
d) $25,000
A partner in a partnership incurs individual income tax liabilities that he doesn’t pay. The IRS files a NFTL. To what property does the lien attach?
A. All property owned by the partnership
B. The portion of P/S property equal to his % ownership in the P/S
C. Partner’s interest in the P/S
D. None of the above
In determining property to which the FTL attaches, look first to:
A. State law to determine if T/P has property to which a FTL may attach.
B. Case law to find what property is exempt
C. The law governing whether an individual Indian has not been determined to be competent
D. Federal law to construe the terms of a trust instrument to find a taxpayer-beneficiary's interest in the trust
Which of the following is a true statement?
A. No property or right to property is excepted from FTL
B. State law determines what rights T/P has in property and whether it is exempt from the attachment of FTL
C. No property or right to property is exempt from FTL, except property exempted from levy by § 6334.
D. None of the above.
Which of the following may be brought against the U.S. in federal district court by a party other than T/P?
A. a quiet title action
B. a wrongful levy suit
C. an interpleader suit
D. all of the above
Once the United States obtains a judgment in a suit to reduce tax liability to judgment, what collection vehicle is not available to collect the tax from real property?
A. A foreclosure suit on the judgment
B. A writ of attachment on the judgment
C. Criminal Contempt
D. Administrative Seizures
The United States must bring an erroneous refund action within what period of limitations?
A. only w/in 2 years after the refund
B. generally w/in 2 years after refund; but 5 years if any part fraudulently induced
C. only w/in 5 years after the refund
D. generally w/in 5 years after the refund; but w/in 10 years if any part fraudulently induced.
Which of the following levy actions requires district court approval?
A. levy upon a T/P’s unemployment benefits
B. continuous levy upon a T/P’s salary
C. levy upon a T/P’s principal residence
D. none of the above
Which is the least important consideration when requesting DJ to reduce an assessment to judgment and foreclose a FTL?
A. T/P recently changed jobs
B. Multiple parties have an interest in the prop.
C. Proceeds expected to full pay
D. CSED soon to expire
Which of the following provide exceptions to the Anti-Injunction Act’s (AIA) bar on suits for the purpose of restraining the assessment or collection of tax?
A. The plain text of the AIA, which excepts certain injunctions allowed by other provisions of the I.R.C.
B. Enochs v. Williams Packing and Navigation , which provides a two pronged test that, if met, excepts a suit from the AIA
C. South Carolina v. Regan, which provides an exception where the taxpayer does not have an adequate alternative remedy
D. All of the above
Which of these must be true for the Service to properly assess a tax?
A statutory notice of deficiency must be issued
The Service records the amount of tax, the type of tax, the taxpayer’s name, and the date of the assessment
The Form 23c must be signed by the appropriate Director
The appropriate Director and a Chief Counsel attorney must have agreed that collection is at risk
The statute of limitations on assessment will run . . .
When the taxpayer has not filed their return
When the taxpayer has submitted a fraudulent return but then submits a non-fraudulent return
When the taxpayer did not file a return and the Service issued a substitute for return which the taxpayer did not sign
When the taxpayer’s return reported total tax of $100,000 but the correct tax is $125,000
Which of these taxes must be assessed through deficiency procedures?
The tax shown on the taxpayer’s return
Employment taxes
An underpayment caused by an increase in income tax due to understated basis
A court orders restitution in a criminal tax case
A taxpayer doesn’t need to receive a notice of deficiency . . .
After a taxpayer requests abatement of a math error assessment
Whenever there is an underpayment of the income tax reported as due on the taxpayer’s return
After a jeopardy assessment of an income tax deficiency has been made
The Commissioner does not bear the burden of proof in a deficiency case . . .
When the Commissioner raises a new issue at trial
When at trial the taxpayer has produced credible evidence on a factual issue relevant to determining liability
To demonstrate managerial approval of a penalty before it was asserted when the taxpayer has not produced evidence
When a fraud penalty is asserted
When there is unreported income
How is a termination assessment different from a jeopardy assessment?
A termination assessment must be approved by a Director (Compliance) or Area Director and by Counsel.
A termination assessment does not require a showing that collection is at risk, such as the taxpayer moving money or being at high risk of insolvency.
A termination assessment closes a taxable year before its normal end.
A statutory notice of deficiency may be necessary after a termination assessment.
In order to serve notice of a judicial sale on the United States, . . .
The suit must be filed in a federal district court.
A suit filed in a state court must be removed to a federal district court.
The suit can be filed in a state court with jurisdiction.
Which of these forecloses the Services’ right to redeem property after a sale?
An administrative discharge of an NFTL prior to a judicial sale.
The Service’s consent to a nonjudicial sale of property free of the NFTL.
For a nonjudicial sale of property, in which of these cases would the Service’s junior lien be discharged?
When no NFTL was filed when state law would discharge the federal tax lien.
When the NFTL was filed more than 30 days prior to the date of sale and notice is provided to the Service 10 days prior to the sale.
Setting aside agreed extensions, a refund suit may be filed no later than 2 years after:
The filing date of the refund claim
The filing date of the tax return to which the refund relates
The Service’s disallowance of a refund claim
The mailing date of the statutory notice of deficiency
Which of these is true about the right of redemption?
The Service may redeem property after any judicial or nonjudicial sale provided there has not been an administrative discharge of the lien.
Any property sold in a judicial or nonjudicial sale may be redeemed.
The Service’s procedures only allow redemption when it is possible to sell the property for more than the amount paid to redeem it.
Which of these costs would the Service not be responsible for if it redeems property from a third-party purchaser?
The actual amount paid in the sale.
Repair and maintenance expenses paid.
Property taxes paid.
Remodeling expenses.
A fixed rate of interest between the date of sale and date of redemption.
A levy reaches property and rights to property existing at the time thereof. A levy reaches fixed and determinable rights even if payment is deferred.
a. True
b. False
The IRS is required to release a levy if:
Taxpayer is in an Installment Agreement, unless it provides otherwise
It will facilitate collection
IRS finds it is creating economic hardship because of financial condition
Any of the above
A formal income tax refund claim need not…
Be signed under penalty of perjury
Be filed on the proper form original or amended tax return required by the IRS
Include a bank account into which the refund may be deposited
Set forth the grounds of the refund claim
A writ of entry may not be used for the following purpose:
To seize assets of a business
To seize assets in a private residence
To seize evidence or obtain information
