FlexiQuiz - Enrolled Agent Review Questions: "PART 1

1. According to IRC Section 7703(b), a spouse is considered abandoned when the following conditions are met:

A. The abandoned individual pays more than half the cost of maintaining their household for the taxable year.

B. The individual files a separate tax return.

C. The individual's household is the main home of a dependent child for more than six months of the tax year, and the individual is entitled to claim the dependency exemption (even if not claimed).

D. All of the above.

2. If a court order retroactively corrects a mathematical error in a taxpayer’s divorce decree to reflect the original intent to spread payments over more than 10 years:

A. This change is not effective for Federal tax purposes.

B. This change is effective retroactively for Federal tax purposes.

C. This change is only effective for the current tax year for Federal tax purposes.

D. This change is only effective for future tax years for Federal tax purposes.

3. When Monica signed her joint return, she knew her spouse did not report $6,500 of gambling winnings. The IRS later found an additional $18,000 in unreported winnings. Monica established that she did not know and had no reason to know about the additional $18,000. If she meets the other requirements for innocent spouse relief, all of the following are true except:

A. The understated tax due to the $18,000 qualifies for innocent spouse relief.

B. The understated tax due to the $24,500 qualifies for innocent spouse relief.

C. The understated tax due to the $6,500 of gambling winnings she knew about does not qualify for relief.

D. Monica qualifies for partial relief because she had no knowledge or reason to know of only a portion of an erroneous item when she filed her return.

4. Which of the following tests is not required for a qualifying relative?

A. Relationship test

B. Age test

C. Residency test

D. Support test

5. A taxpayer can use Form 1040X to contribute what amount to the Presidential Election Campaign Fund if they did not do so on the original return?

A. $3

B. $5

C. $7

D. The taxpayer cannot use Form 1040X to specify money goes to the Presidential Election Campaign Fund.

6. Unemployment compensation typically includes any amount received under an unemployment compensation law of the United States or a state. Which of the following statements is incorrect?

A. The taxpayer may need to pay estimated taxes if they receive unemployment compensation.

B. Benefits received by an unemployed union member from regular union dues are not included in their gross income.

C. Benefits received from a company-financed fund, to which the taxpayer did not contribute, are considered taxable wages.

D. Payments received from an employer during unemployment, under a union agreement guaranteeing full pay for the year, are considered taxable wages.

7. Unemployment compensation generally includes which of the following benefits?

A. Benefits paid by a state or the District of Columbia from the Federal Unemployment Trust Fund.

B. State unemployment insurance benefits.

C. Railroad unemployment compensation benefits.

D. All of the above.

8. Which of the following types of canceled debt can be excluded from gross income?

A. Debt canceled in a Title 11 bankruptcy case.

B. Amounts specifically excluded from income by law, such as gifts or inheritances.

C. Cancellation of certain qualified student loans.

D. Canceled debt that would be deductible if paid by a cash basis taxpayer.

9. Which of the following is considered a source of passive income?

A. Lottery winnings

B. Annuities

C. Guaranteed payments for services

D. Rental activity

10. A property transfer is considered incident to a taxpayer’s divorce if it occurs within how many years after the marriage ends?

A. One year

B. Two years

C. Three years

D. Four years

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Enrolled Agent Review Questions: "PART 1 - INDIVIDUALS"