Taxation Assignment-1. On July 1, 20×5, following an examination of T’s returns for 20×1 and 20×2, the IRS issued…

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Taxation Assignment

Reading

The primary text for this course is: IRS Practice and Procedure (Student Edition)

ISBN: 978-0-7913-8501-2

Lesson Assignment # ***** The Examination Function

Reading

Text: Study Sections 8.01; 8.02; 8.04 through 8.08; 8.11 through 8.14; 8.16 of the text. (Skim

8.09; 8.10; 8.15 through 8.23 of the chapter.)

Internal Revenue Code: Read the following Internal revenue Code Section: §6020. (Skim

§6221-§6234 sections)

1. On July 1, 20×5, following an examination of T’s returns for 20×1 and 20×2, the IRS

issued, and T signed, a Form 870 agreeing to certain deficiencies. On December 1,

20×5, the IRS notified T that certain partnership losses reflected on the 20×1 and 20×2

returns are disallowed, thereby changing the deficiencies agreed to on the Form 870.

Can the IRS reopen the examination of returns for the 20×1 and 20×2 tax years

2. What is a Revenue Agent Report (RAR), and how is it used?

3. Jo is being audited by the IRS. The revenue agent determines that certain expenses that

were deducted on Jo’s return are not valid, and the agent accordingly makes

adjustments to Jo’s tax liablity. Upon receipt of her thirty-day letter, Jo phones you for

advice regarding possible future action on the matter. In the form of a letter to the

client,what options would you present to Jo?

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