CPA REG Practice Test

CPA REG Federal Tax Procedures Practice Questions

Federal Tax Procedures makes up 4 of every 50 questions on a Tigertest CPA REG practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on the AICPA's 2026 REG blueprint. Original multiple-choice questions; 50 per test, weighted like the real section's five areas, 75% target. Not affiliated with the AICPA or NASBA.

1. 1. After receiving a statutory notice of deficiency, a taxpayer in the United States who wants Tax Court review without paying first must petition within:

   • A.180 days
   • B.90 days
   • C.30 days
   • D.60 days

   Answer: B. The notice of deficiency, often called the 90-day letter, gives 90 days (150 if addressed outside the United States) to petition the Tax Court. The 30-day letter comes earlier and offers Appeals.

2. 2. An IRS 30-day letter after an audit gives the taxpayer the chance to:

   • A.File suit in district court
   • B.Settle with no interest due
   • C.Petition the U.S. Tax Court
   • D.Request an Appeals conference

   Answer: D. The 30-day letter proposes the adjustments and lets the taxpayer protest to the IRS Independent Office of Appeals. Tax Court review follows the later 90-day letter.

3. 3. A taxpayer who wants a jury to decide a federal tax dispute must:

   • A.Pay, then sue in district court
   • B.Elect the small case procedure
   • C.Petition the U.S. Tax Court
   • D.Sue in the Court of Federal Claims

   Answer: A. Only a U.S. district court offers a jury trial in a tax refund suit, and the tax must be paid first. The Tax Court and the Court of Federal Claims sit without juries.

4. 4. A decision of the U.S. Tax Court in a regular case is appealed to the:

   • A.U.S. district court
   • B.U.S. Court of Federal Claims
   • C.Regional court of appeals
   • D.U.S. Supreme Court directly

   Answer: C. Regular Tax Court decisions go to the U.S. court of appeals for the circuit where the taxpayer resides. Small case decisions cannot be appealed.

5. 5. Absent fraud, a failure to file or a large omission, the IRS must assess additional income tax within how long after the return is filed?

   • A.6 years
   • B.7 years
   • C.3 years
   • D.2 years

   Answer: C. The general assessment period is 3 years from the later of the filing date or the due date. Fraud or no return leaves it open indefinitely.

6. 6. A taxpayer omits gross income of more than 25% of the gross income reported on the return. The IRS may assess within:

   • A.6 years
   • B.10 years
   • C.7 years
   • D.3 years

   Answer: A. A substantial omission of more than 25% of reported gross income extends the assessment period to 6 years.

7. 7. Ana files her calendar-year individual return on February 20. Her 3-year assessment period starts on:

   • A.December 31 of that year
   • B.February 20, when filed
   • C.January 1 of that year
   • D.The April 15 due date

   Answer: D. A return filed before its due date is treated as filed on the due date, so the period runs from April 15.

8. 8. A taxpayer filed on time and paid in full with the return. A claim for refund must be filed within the later of 3 years from filing or:

   • A.6 months from payment
   • B.2 years from payment
   • C.1 year from payment
   • D.3 years from payment

   Answer: B. A refund claim is timely if filed within 3 years of the return or 2 years of payment, whichever is later.

9. 9. A taxpayer files 3 months late with no extension and no reasonable cause and owes tax. Before any offset, the failure-to-file penalty is:

   • A.25% of the unpaid tax
   • B.15% of the unpaid tax
   • C.5% of the unpaid tax
   • D.1.5% of the unpaid tax

   Answer: B. The failure-to-file penalty is 5% of the unpaid tax per month or part of a month, up to 25%. Three months gives 15%, reduced by any failure-to-pay penalty for the same months.

10. 10. Travel and gift expenses covered by section 274(d) must be supported by records showing the amount, the time and place, and the:

    • A.Name of a witness
    • B.Supplier's tax ID
    • C.Payment method
    • D.Business purpose

    Answer: D. Section 274(d) requires adequate records of amount, time, place and business purpose (and business relationship for gifts). Estimates under the Cohan rule are not allowed for these expenses.