Identify Which of the Following Statements Is True

question 89

Multiple Choice

Identify which of the following statements is true.

• A)The "innocent spouse provision," if applicable, relieves both spouses from an assessment of tax caused by a spouse's understating income or gain and/or overstating deductions, losses, or credits.
• B)The IRS is precluded from assessing any residual tax liability against transferees and fiduciaries because the initial filers are responsible for meeting the tax payments in a timely fashion.
• C)Treasury Department Circular 230 regulates the practice of attorneys, CPAs, enrolled agents, and enrolled actuaries before the IRS.
• D)All of the above are false.

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Definitions:

Chapter 7

A provision of the U.S. Bankruptcy Code that involves the liquidation of a debtor's assets to pay off creditors.

Debtors

Individuals or entities that owe money to another party, typically as a result of receiving a loan or credit.

Exemptions

Provisions that allow certain individuals or entities to be excused from observing a particular law or regulation.

Chapter 11

A chapter of the U.S. Bankruptcy Code that provides for reorganization, usually involving a corporation or partnership, allowing the debtor to keep its business alive and pay creditors over time.