ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Reconciling your bank account
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Examination of your tax return and records by the IRS
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Examination of your checking and savings account
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Looking at what you’ve spent over the year
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Detailed explanation-1: -According to the IRS, “[t]his identification is determined using risk-based scoring mechanisms, data driven algorithms, third party information, whistleblowers and information provided by the taxpayer. The objective of an examination is to determine if income, expenses and credits are being reported accurately."
Detailed explanation-2: -An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.
Detailed explanation-3: -The Unreported Income DIF (UIDIF) score rates the return for the potential of unreported income. IRS personnel screen the highest-scoring returns, selecting some for audit and identifying the items on these returns that are most likely to need review.
Detailed explanation-4: -An examination is similar to an audit, but the main difference is that an audit focuses on historical financial information while an examination focuses on non-historical financial information.
Detailed explanation-5: -1. Mail audits. Mail audits are fairly routine. Office and field audits. On the other hand, office and field audits are much more serious. CP2000 notice (underreporter inquiry)