Which of the Following Statements About the DIF Score Is

question 29

Multiple Choice

Which of the following statements about the DIF score is true?

• A) Details of the DIF score computation are available on the IRS website.
• B) The lower the DIF score assigned to a tax return, the higher the probability that the return will be selected for audit.
• C) Theoretically, the DIF score measures a tax return's potential for generating additional revenue on audit.
• D) Taxpayers can contact the IRS to determine their DIF score before filing their annual tax return.

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Definitions:

Securities Act

A law or legislation that regulates the issuance and sale of securities to protect investors against misrepresentation, deceit, and other frauds.

Proxy

A document evidencing the transfer of a shareholder’s voting right to an appointee, either with instructions for voting, or allowing discretion to be exercised by the appointee, at a meeting of shareholders of the corporation.

Transferred Right

Involves transferring a legal right from one party to another, which could include property rights, contractual rights, or other legal entitlements.

Corporate Ballot

A voting system utilized within corporations whereby shareholders vote on company matters, either in person at meetings or via proxy.