Before Litigating a Tax Case in Court, the Taxpayer Must

question 13

Multiple Choice

Before litigating a tax case in court, the taxpayer must

• A)Have exhausted the required administrative remedies available within the IRS
• B)Convince the judiciary branch that the IRS misinterpreted tax law or wrongly applied it to the taxpayer's case
• C)Try to find a similar court decision from the past and present the case to that Court
• D)Enter into agreement with the IRS to use the Court as arbiter
• E)Not be guilty of fraud in the original or amended return at issue

---

Definitions:

Depletion

Depletion is an accounting method used to allocate the cost of extracting natural resources such as minerals, oil, and gas from the earth over the period they are consumed.

Straight-Line Method

A method of calculating depreciation of an asset, which spreads the cost evenly across its useful life.

Units-of-Activity Method

A depreciation method that allocates costs based on the actual usage or output of the asset rather than time.

Depletion Cost

The allocation of the cost of natural resources, such as minerals or oil, over the period they are extracted and sold.