Identify Which of the Following Statements Is True

question 44

Multiple Choice

Identify which of the following statements is true.

• A)If a taxpayer has been audited in at least one of the two previous years on the same item and the earlier audit did not result in any additional tax owed, the taxpayer may qualify for the special audit relief rule.
• B)A taxpayer can request and always receive an exemption from an audit by the IRS if his return was audited in at least one of the two previous years and the previous audit did not result in any change to his tax liability.
• C)The signing of Form 870 allows the taxpayer to wait for 30 interest-free days after the billing date to pay the tax.
• D)All of the above are true.

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Definitions:

No Par Common Stock

Shares issued without a nominal or face value, where the value is determined by the price investors are willing to pay.

Stated Value

A value assigned to no-par value stock by the corporation's board, not based on market price but used for accounting purposes.

Issue Price

Issue price is the price at which a new set of securities, such as bonds or stock, is offered to the public for the first time.

Preferred Stock

A class of stock that offers dividends and/or liquidation preferences over common stock but typically does not carry voting rights.