What Kind of Audit Requires That a Taxpayer Visit an IRS

question 49

Multiple Choice

What kind of audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return?

• A)Office audit
• B)Correspondence audit
• C)Field audit
• D)Taxpayer compliance measurement program audit
• E)Random audit

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Definitions:

Present Value

The assessed current value of a future monetary amount or series of financial flows, at a given rate of return.

Compound Interest

Refers to the addition of interest to the principal sum of a loan or deposit, where the added interest also earns interest from then on. This effect makes a sum grow at a faster rate compared to simple interest, which is calculated only on the principal amount.

Present Value

The current value of a future cash amount or ongoing cash flows, when calculated with a specific return rate.

Compounded Monthly

A method of calculating interest where the earned interest is added to the principal at the end of each month, allowing the interest in the next month to be calculated on the new total.