Question 76 Lawan has been making payments on her federal student… Question 76Lawan has been making payments on her federal student loan on an income-based repayment plan for the last 22 years. Under the terms of her plan, the remaining balance will be forgiven after another three years of payments, in 2024. Under law, applicable for Tax Years 2020 through 2025, how will her loan forgiveness be treated on her federal return?A) The full amount of the forgiven balance will be taxable income.B) The amount of the forgiven balance in excess of $20,000 (indexed for inflation) will be taxable income.C) The forgiven balance can be excluded from taxable income.D) A percentage of the forgiven balance will be taxable income using a formula that will be based on Lawan’s income in the year the balance is forgiven.Question 79Which of the following employees’ fringe benefits are taxable?A) Janet exercised a stock option, but made an election to defer income tax because her company’s stock wasn’t readily tradable on an established securities market during any prior taxable year.B) Kinu was presented a voucher for an all-expenses-paid vacation in a company-wide meeting.C) Bruce received a laptop bag from his employer in a ceremony celebrating his five years with the company.D) Aysel received a turkey at Thanksgiving and a ham at Christmas from her employer.Question 88How much can a paid tax return preparer be penalized per violation for failure to sign tax returns they prepared?A) $50 per return; up to $27,000 per tax preparer.???B) $50 per return with no limit per tax preparer.C) $545 per violation; up to $27,000 per tax preparer.D) $545 per violation with no limit per tax preparer.Question 90In which of the following situations is a paid preparer required to file Form 8867, Paid Preparer’s Due Diligence Checklist? The taxpayer is claiming the:A) Lifetime learning credit.B) Premium Tax Credit.C) Child Tax Credit.D) Recovery Rebate Credit.Question 99George’s long-time client, Henrietta, brought in business records this year showing $40,000 of business income and $30,000 of related expenses. In prior years, her expenses have been closer to $10,000. Which of the following should George do to ensure that he complies with his Circular 230 duty of due diligence as to accuracy?A) Refuse to prepare the return unless Henrietta can provide receipts for each individual expense.B) Review the records Henrietta provided to see if they adequately explain the sharp increase in expenses. If he has any remaining questions, he should ask Henrietta to explain.C) Independently investigate by calling a random sample of the vendors listed to verify that Henrietta really paid the amounts claimed.D) Prepare Henrietta’s return using the expenses listed on the prior-year return.Question 100Participants in the Annual Filing Season Program will have limited representation rights, which allow them to represent taxpayers before all of the following EXCEPT:A) An IRS revenue agent.B) An IRS taxpayer advocate.C) An IRS customer service representative.D) Tax Court.LawSocial ScienceTax law ACCOUNTING 3301

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