Identify Which of the Following Statements Is True

question 16

Multiple Choice

Identify which of the following statements is true.

• A) The IRS cannot raise a new tax issue after issuance of the Statutory Notice of Deficiency (90- day letter).
• B) A taxpayer can choose to initiate tax litigation in a U.S. district court, the Tax Court, or a Court of Appeals.
• C) The 90- day letter offers the taxpayer the choice of paying the tax assessed or filing a petition refuting the tax assessment with the Tax Court.
• D) All of the above are false.

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Definitions:

Financing Activities

Cash flow activities related to raising capital and repaying shareholders, including issuing debt, selling equity, dividends, and repaying debt.

Guaranteed Annual Dividend

A promise by a corporation to pay its shareholders a specified minimum annual dividend.

Inventory Transfer

The movement of inventory from one location to another within the same company, which may involve transferring goods between departments or geographic locations.