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:

Federal Consumer Credit Protection Act

A United States law enacted in 1968 aimed at protecting consumers in financial transactions by requiring clear disclosure of terms and costs of credit and establishing consumer rights regarding credit billing and electronic fund transfers.

Garnishment Proceedings

A legal process by which a creditor can collect what is owed from a debtor's salary, bank accounts, or other assets directly from the third party holding them.

Finance Charges

Fees that are assessed for the use of credit or the extension of existing credit, might include interest, transaction fees, and service charges.

Collection Agency

is an organization that pursues the collection of debts owed by individuals or businesses on behalf of creditors.