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Hello. I need the answers for the (2020 - Volunteer Income Tax Assistance Tests (VITA) form 6744). The questions are in the book that is freely available online in PDF format. But I attached it with the question. There are many groups of tests but, I just need these five :

1. Volunteer Standards of Conduct Test.

2. Intake / Interview and Quality Review Test Questions.

3. Site Coordinator Test Questions.

4. Basic Course Scenarios and Test Questions.

5. Advanced Course Scenarios and Test Questions.

I highlighted those Tests in the book.

So Please, Open the PDF file and see the Tests & Question that I highlighted, then reply to me.

The due date of this question is on Jan 23, 2021.

Thank You,

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6744 VITA/TCE Volunteer Assistor’s Test/Retest Volunteer Income Tax Assistance (VITA) / Tax Counseling for the Elderly (TCE) 2020 RETURNS Take your VITA/TCE training online at www.irs.gov (keyword: Link & Learn Taxes). Link to the Practice Lab to gain experience using tax software and take the certification test online, with immediate scoring and feedback. Form 6744 (Rev. 10-2020) Catalog Number 43560V Department of the Treasury Internal Revenue Service www.irs.gov How to Get Technical Updates? Updates to the volunteer training materials will be contained in Publication 4491-X, VITA/TCE Training Supplement. The most recent version can be downloaded at: https://www.irs.gov/pub/irs-pdf/p4491x.pdf Volunteer Standards of Conduct VITA/TCE Programs The mission of the VITA/TCE return preparation programs is to assist eligible taxpayers in satisfying their tax responsibilities by providing free tax return preparation. To establish the greatest degree of public trust, volunteers are required to maintain the highest standards of ethical conduct and provide quality service. All VITA/TCE volunteers (whether paid or unpaid workers) must pass the Volunteer Standards of Conduct certification, and sign and date Form 13615, Volunteer Standards of Conduct Agreement, prior to working at a VITA/TCE site. In addition, return preparers, quality reviewers, site coordinators, and VITA/TCE tax law instructors must certify in the Intake/Interview & Quality Review and tax law prior to signing this form. This form is not valid until the site coordinator, sponsoring partner, instructor, or IRS contact confirms the volunteer’s identity, with a government issued photo ID, and signs and dates the form. As a volunteer in the VITA/TCE Programs, you must: 1. Follow the Quality Site Requirements (QSR). 2. Not accept payment, solicit donations, or accept refund payments for federal or state tax return preparation from customers. 3. Not solicit business from taxpayers you assist or use the knowledge you gained (their information) about them for any direct or indirect personal benefit for you or any other specific individual. 4. Not knowingly prepare false returns. 5. Not engage in criminal, infamous, dishonest, notoriously disgraceful conduct, or any other conduct deemed to have a negative effect on the VITA/TCE Programs. 6. Treat all taxpayers in a professional, courteous, and respectful manner. Failure to comply with these standards could result in, but is not limited to, the following: • • • • Your removal from all VITA/TCE Programs; Inclusion in the IRS Volunteer Registry to bar future VITA/TCE activity indefinitely; Deactivation of your sponsoring partner’s site VITA/TCE EFIN (electronic filing ID number); Removal of all IRS products, supplies, loaned equipment, and taxpayer information from your site; • Termination of your sponsoring organization’s partnership with the IRS; • Termination of grant funds from the IRS to your sponsoring partner; and • Referral of your conduct for potential TIGTA and criminal investigations. TaxSlayer® is a copyrighted software program owned by Rhodes Computer Services. All screen shots that appear throughout the official Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) training materials are used with the permission of Rhodes Computer Services. Confidentiality Statement: All tax information you receive from taxpayers in your volunteer capacity is strictly confidential and should not, under any circumstances, be disclosed to unauthorized individuals. Form 6744 – 2020 VITA/TCE Test Table of Contents Form 6744 – 2020 VITA/TCE Test 3 Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Test Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Test Answer Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Retest Answer Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Volunteer Standards of Conduct Test 13 Test Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Volunteer Standards of Conduct Retest Questions. . . . . . . . . . . . . . . . . . . . . . . . 17 Intake / Interview and Quality Review Test Questions 23 Intake / Interview and Quality Review Retest Questions. . . . . . . . . . . . . . . . . . . . 25 Site Coordinator Test Questions 27 Site Coordinator Course Retest Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Basic Course Scenarios and Test Questions 33 Basic Scenario 1: Sheldon and Odessa Sanford. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 2: Marsha Perry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 3: Aiden and Sophia Duke . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 4: Benjamin and Amelia Hopkins . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 5: Lucas and Abagail Brown. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 6: Daniel and Avery Emory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 7: Emma Davis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Scenario 8: Aioki Ellis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basic Course Retest Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 34 35 36 37 38 48 55 63 Advanced Course Scenarios and Test Questions 71 Advanced Scenario 1: Rebecca Washington. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Advanced Scenario 2: Pat and Terri Jefferson. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Advanced Scenario 3: Janice Billings and Andrew Noble. . . . . . . . . . . . . . . . . . . . . . 73 Advanced Scenario 4: Barbara Williams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Advanced Scenario 5: Robert Adams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Advanced Scenario 6: Harris and Carly Franklin. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Advanced Scenario 7: Travis and Sylvia Kennedy . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Advanced Scenario 8: Richard Roosevelt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Advanced Course Retest Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Qualified Experienced Volunteer (QEV) Scenarios and Test Questions 119 QEV Scenario 1: Donna and Becky Butler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QEV Scenario 2: Clare Ellsworth and Her Parents . . . . . . . . . . . . . . . . . . . . . . . . . . QEV Scenario 3: Genevieve Chabot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QEV Scenario 4: Barbara Drake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QEV Scenario 5: Kenneth and Martha Kemper. . . . . . . . . . . . . . . . . . . . . . . . . . . . . QEV Scenario 6: John Cameron and Amy Camden . . . . . . . . . . . . . . . . . . . . . . . . . QEV Course Retest Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction & Instructions 119 121 124 126 129 139 155 1 Military Course Scenarios and Test Questions Military Scenario 1: Blaine Gill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Scenario 2: Will and Holly Clark . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Scenario 3: Ania Ortiz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Scenario 4: Jack and Ana Bryant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Scenario 5: Carl and Queenie Stevens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Military Course Retest Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Course Scenarios and Test Questions International Scenario 1: Todd and Audrey Hilliard . . . . . . . . . . . . . . . . . . . . . . . . . . International Scenario 2: Eric and Tamara Fisher . . . . . . . . . . . . . . . . . . . . . . . . . . . International Scenario 3: William Webster. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International Course Retest Questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Federal Tax Law Update Test for Circular 230 Professionals Circular 230 Professionals Scenario 1: Herb and Alice Freeman . . . . . . . . . . . . . . . Circular 230 Professionals Scenario 2: Chloe Carlow. . . . . . . . . . . . . . . . . . . . . . . . Circular 230 Professionals Scenario 3: Luther and Lexi Lincoln. . . . . . . . . . . . . . . . Circular 230 Professionals Scenario 4: Kendall King . . . . . . . . . . . . . . . . . . . . . . . . Return Preparation: Siena Spelman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Federal Tax Law Update Retest for Circular 230 Professionals . . . . . . . . . . . . . 2020 VITA/TCE Foreign Student Test for Volunteers Residency Status, Form 8843, and Filing Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . Scenario 1: Lee Satō. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxability of Income, ITINs, and Credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scenario 2: Li Wei. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scenario 3: Raj Khatri . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scenario 4: Haniya Bukhari. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refunds, Deductions, and the Best Form to Use . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 VITA/TCE Foreign Student Retest for Volunteers . . . . . . . . . . . . . . . . . . . . 2 Introduction & Instructions 163 163 164 166 167 168 175 181 181 182 184 191 197 197 198 199 201 204 211 217 218 220 224 225 234 241 248 251 Form 6744 – 2020 VITA/TCE Test Preface Quality Return Process An accurate return is the most important aspect of providing quality service to the taxpayer. It establishes credibility and integrity in the program. Throughout the training material you were introduced to the major components of the VITA/TCE return preparation process, including: • Understanding and applying tax law • Screening and interviewing taxpayers • Using references, resources, and tools • Conducting quality reviews . Introduction & Instructions 3 Test Instructions Special Accommodations If you require special accommodations to complete the test, please advise your instructor, Site Coordinator, or other VITA/TCE volunteer contact immediately. Reference Materials This test is based on the tax law that was in effect when the publication was printed. Use tax year 2020 values for deductions, exemptions, tax, or credits for all answers on the test. Remember to round to the nearest dollar. Test answers have been rounded up or down as directed in the specific instructions on the form. • This is an open book test. You may use your course book and any other reference material you will use as a volunteer. A draft Form 13614-C, Intake/Interview & Quality Review Sheet, is included in the return preparation scenarios. Use this form when completing the tax returns and answering the test questions. Please complete this test on your own. Taking the test in groups or with outside assistance is a disservice to the customers you volunteered to help. Using Tax Preparation Software The Practice Lab is a tax year 2020 tax preparation tool developed to help in the certification process for VITA/TCE volunteers . Go to www.irs.gov and type “Link & Learn Taxes” in the keyword search field. Click on the link to open the website. The link to the Practice Lab is listed under “Additional Resources .” A universal password will be needed to access the Practice Lab . Your instructor, Site Coordinator, or other VITA/TCE volunteer contact will be able to provide you with the universal password . Once you access the Practice Lab, you will need to create an account if you do not already have one . Using prior year software will not generate the correct answers for the 2020 test . When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice . Use your city, state, and ZIP code when completing any of the forms, unless otherwise indicated . Any question posed by the software not addressed in the interview notes can be answered as you choose . All taxpayer names, SSNs, EINs, and account numbers provided in the scenarios are fictitious. Taking the Test When taking the tests, you may encounter both mini-scenarios and tax preparation scenarios . The mini-scenarios do not require you to prepare a tax return . For each of these, read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios . This test is based on the tax law that was in effect when the publication was finalized. The answers for the test and retest are based on 2020 values for deductions, exemptions, tax, and credits . The most current draft copies of forms were used at the time this document was published . The tax preparation scenarios require you to complete a sample tax return . You can use the Practice Lab to prepare the sample returns . Answer the questions following the scenario . 4 Introduction & Instructions You can complete the certification tests online using the Link & Learn Taxes website for immediate scoring . Go to the Link & Learn Taxes e-learning application at www.linklearncertification.com or at www.irs.gov, using keyword search: Link & Learn . If your instructor prefers, you can complete the test answer sheet to be graded by hand . Test Answer Sheet The test scenarios on Link & Learn Taxes are the same as in this booklet. Read each question carefully before entering your answers online. Mark your answers in the test booklet. Use the answer sheet if you are submitting the paper test to your instructor for grading. In that case, make sure your name is at the top of the page and give your Test Answer Sheet and the completed Form 13615, Volunteer Standards of Conduct Agreement to your instructor, Site Coordinator, or other VITA/TCE volunteer contact as directed. Do not submit your entire test booklet unless otherwise directed. The retest questions are all based on the test scenarios. There are mini-scenarios and questions in Basic, Advanced, Military, and International. The Interview Notes for the mini-scenarios are included on the retest pages. To answer the retest questions for return preparation scenarios, refer to the Interview Notes, Intake/Interview & Quality Review Sheet, and the tax return you prepared for the scenario. Test Score Once you submit your responses, Link & Learn Taxes will grade your test, provide you with an immediate score, and allow you to print or save your Form 13615, Volunteer Standards of Conduct Agreement. The system will also provide feedback for any missed questions. If you submit your paper test answer sheet to your instructor, he or she will advise you of your test results. Your signed Volunteer Standards of Conduct Agreement will be maintained by your Site Coordinator or other VITA/TCE volunteer contact. Certification A score of 80% or higher is required for certification. If you do not achieve a score of at least 80%, you should review the subjects you missed or discuss it with your instructor, Site Coordinator, or other VITA/TCE volunteer contact. For most tests, a retest is available. Retest questions are included in this test booklet. Introduction & Instructions 5 Certification Tests 6 Introduction & Instructions Test Answer Sheet Name If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Privacy Act Notice The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301. Question Answer We are asking for this information to assist us in contacting you relative to your interest and/or participaAdvanced Scenario 1 tion in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or 1. outreach activities. The information may also be used to establish effective controls, send correspondence 2. and recognize volunteers. Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs. Question Question Answer Standards of Conduct 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Total Answers Correct: Total Questions: 10 Passing Score: 8 of 10 Question Answer Intake/Interview & Quality Review Answer Site Coordinator Test 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Question Advanced Scenario 2 Answer 3. 4. Basic Scenario 1 Advanced Scenario 3 1. 2. 5. 6. 7. 8. Basic Scenario 2 3. 4. Basic Scenario 3 Advanced Scenario 4 5. 6. 9. 10. Basic Scenario 4 Advanced Scenario 5 7. 8. 11. 12. Basic Scenario 5 Advanced Scenario 6 9. 10. 13. 14. 15. 16. 17. 18. 19. Basic Scenario 6 Total Answers Correct: Total Questions: 15 Passing Score: 12 of 15 11. 12. 13. 14. 15. 16. 17. Advanced Scenario 7 20. 21. 22. 23. 24. 25. 26. 27. 28. Basic Scenario 7 18. 19. 20. 21. 22. 23. 24. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Advanced Scenario 8 Basic Scenario 8 Total Answers Correct: Total Questions: 10 Passing Score: 8 of 10 29. 30. 31. 32. 33. 34. 35. 25. 26. 27. 28. 29. 30. Total Answers Correct: Total Answers Correct: Total Questions: 30 Total Questions: 35 Passing Score: 24 of 30 Passing Score: 28 of 35 Introduction & Instructions 7 Test Answer Sheet Name If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Question Answer Question Qualified Experienced Volunteer Test QEV Scenario 1 Answer Military Scenario 1 1. 2. International Scenario 2 3. 4. 5. 6. QEV Scenario 2 4. 5. 3. 4. 5. 6. Military Scenario 3 QEV Scenario 3 International Scenario 3 7. 6. 7. 7. 8. 9. 10. 11. 12. 13. 14. 15. 8. Military Scenario 4 QEV Scenario 4 9. 10. 8. 9. Military Scenario 5 QEV Scenario 5 11. 12. 13. 14. 15. 10. 11. 12. 13. 14. 15. Total Answers Correct: Total Answers Correct: QEV Scenario 6 Total Questions: 15 Passing Score: 12 of 15 16. 17. 18. 19. 20. Total Answers Correct: Total Questions: 20 Passing Score: 16 of 20 Introduction & Instructions Answer International Scenario 1 1. 2. Military Scenario 2 1. 2. 3. 8 Question Total Questions: 15 Passing Score: 12 of 15 Circular 230/Foreign Student Test Answer Sheet Name If you are entering your retest answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Retest Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Instructions: Volunteers with a Basic or Advanced certification may certify on Health Savings Accounts (HSA). HSA is an optional specialty training and certification test available on Link & Learn Taxes. Privacy Act Notice The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301. We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers. Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs. Question Question Answer Federal Tax Law Update Test for Circular 230 Professionals Circular 230 Scenario 1 1. 2. 3. Circular 230 Scenario 2 4. 5. Circular 230 Scenario 3 6. 7. 8. Circular 230 Scenario 4 9. 10. 11. Answer Foreign Student Residency Status, Form 8843, and Filing Status 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Foreign Student Scenario 1 Circular 230 Scenario 5 12. 13. 14. 15. 14. 15. 16. 17. Foreign Student Taxability of Income, ITINs, and Credits Total Answers Correct: Total Questions: 15 Passing Score: 12 of 15 18. 19. 20. 21. 22. 23. 24. Question Answer Foreign Student Scenario 3 30. 31. 32. 33. Foreign Student Scenario 4 34. 35. 36. 37. Foreign Student Refunds, Deductions, and the Best Form to Use 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. Total Answers Correct: Total Questions: 50 Passing Score: 40 of 50 Foreign Student Scenario 2 25. 26. 27. 28. 29. Introduction & Instructions 9 Retest Answer Sheet Name If you are entering your retest answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Retest Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Privacy Act Notice The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301. We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers. Your response is voluntary. However, if you do not provide the requested information, the Question Answer IRS may not be able to use your assistance in these programs. Basic Scenario 1 Question Answer Question Standards of Conduct 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Total Answers Correct: Total Questions: 10 Passing Score: 8 of 10 Question Answer Site Coordinator Test 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Intake/Interview & Quality Review 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Basic Scenario 5 Advanced Scenario 6 9. 10. 13. 14. 15. 16. 17. 18. 19. 20. Basic Scenario 6 11. 12. 13. 14. 15. 16. 17. Advanced Scenario 7 21. 22. 23. 24. 25. 26. 27. 28. 18. 19. 20. 21. 22. 23. 24. Advanced Scenario 8 Basic Scenario 8 Total Questions: 10 Passing Score: 8 of 10 29. 30. 31. 32. 33. 34. 35. 25. 26. 27. 28. 29. 30. Total Answers Correct: Total Answers Correct: 10 Introduction & Instructions 4. 5. 10. 11. 12. Basic Scenario 7 Total Answers Correct: Advanced Scenario 2 Advanced Scenario 5 7. 8. 15 2. 3. 8. 9. Basic Scenario 4 12 of 15 1. Advanced Scenario 4 5. 6. Passing Score: Advanced Scenario 1 6. 7. Basic Scenario 3 Total Questions: Answer Advanced Scenario 3 Basic Scenario 2 3. 4. Total Answers Correct: Answer 1. 2. Question Total Questions: 30 Total Questions: 35 Passing Score: 24 of 30 Passing Score: 28 of 35 Retest Answer Sheet Name If you are entering your retest answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Retest Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Question Answer Question Qualified Experienced Volunteer Test QEV Scenario 1 1. 2. 3. Answer Question International Scenario 1 Military Scenario 2 International Scenario 2 Military Scenario 3 International Scenario 3 1. 2. 1. 2. 3. 4. 5. 6. QEV Scenario 2 4. 5. QEV Scenario 3 3. 4. 5. 6. 7. 6. 7. 7. 8. 9. 10. 11. 12. 13. 14. 15. 8. Military Scenario 4 QEV Scenario 4 9. 10. 8. 9. Military Scenario 5 QEV Scenario 5 11. 12. 13. 14. 15. 10. 11. 12. 13. 14. 15. Total Answers Correct: Total Answers Correct: QEV Scenario 6 16. 17. 18. 19. 20. Answer Military Scenario 1 Total Questions: 15 Passing Score: 12 of 15 Total Questions: 15 Passing Score: 12 of 15 Total Answers Correct: Total Questions: 20 Passing Score: 16 of 20 Introduction & Instructions 11 Circular 230 Retest Answer Sheet Name If you are entering your retest answers in Link & Learn Taxes, do not use this answer sheet. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Retest Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement. Privacy Act Notice The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301. We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers. Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs. Question Answer Question Federal Tax Law Update Test for Circular 230 Professionals Circular 230 Scenario 1 1. 2. 3. Circular 230 Scenario 2 4. 5. Circular 230 Scenario 3 6. 7. 8. Circular 230 Scenario 4 9. 10. 11. Answer Foreign Student Residency Status, Form 8843, and Filing Status 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Foreign Student Scenario 1 Circular 230 Scenario 5 12. 13. 14. 15. 14. 15. 16. 17. Foreign Student Taxability of Income, ITINs, and Credits Total Answers Correct: Total Questions: 15 Passing Score: 12 of 15 18. 19. 20. 21. 22. 23. 24. Foreign Student Scenario 2 25. 26. 27. 28. 29. 12 Introduction & Instructions Question Answer Foreign Student Scenario 3 30. 31. 32. 33. Foreign Student Scenario 4 34. 35. 36. 37. Foreign Student Refunds, Deductions, and the Best Form to Use 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. Total Answers Correct: Total Questions: 50 Passing Score: 40 of 50 Volunteer Standards of Conduct Test It is important that all individuals who volunteer their time and services in the VITA/TCE Programs understand their roles and responsibilities under the program. All volunteers are expected to: • Take the Volunteer Standards of Conduct (VSC) Training, at a minimum, the first year of volunteering with VITA/TCE Programs • Annually, pass the VSC/Ethics certification test with a score of 80% or higher; and • Sign and date Form 13615, Volunteer Standards of Conduct Agreement, indicating they have successfully completed the certification test(s) and agree to adhere to the VSC. These Volunteer Standards of Conduct requirements are in addition to the tax law certification process (i.e., Basic, Advanced, Military, or International) for becoming a qualified volunteer to teach tax law, correct tax returns, conduct quality reviews, prepare tax returns, or address tax law related questions as a volunteer in the VITA/TCE Programs. Use your training and reference tools to answer the questions. You must answer eight of the following ten questions correctly to pass the Volunteer Standards of Conduct test. Test Questions Directions Using your resource materials, answer the following questions: 1. Prior to working at a VITA/TCE site, ALL VITA/TCE volunteers (greeters, client facilitators, tax preparers, quality reviewers, etc.) must: a. Annually pass the Volunteer Standards of Conduct (VSC) certification test with a score of 80% or higher. b. Sign and date the Form 13615, Volunteer Standards of Conduct Agreement, agreeing to comply with the VSC by upholding the highest ethical standards. c. Pass the Advanced tax law certification. d. All of the above. e. Both a and b 2. Can a volunteer be removed and barred from the VITA/TCE Programs for violating the Volunteer Standards of Conduct? a. Yes b. No Standards of Conduct (Ethics) 13 3. If a taxpayer offers you a $20 bill because they were so happy about the quality service they received, what would be the appropriate action to take? a. Take the $20 and thank the taxpayer for the tip. b. Tell the taxpayer it would be better to have the $20 deposited directly into your bank account from his refund. c. Thank the taxpayer, and explain that you cannot accept any payment for your services. d. Refer the taxpayer to the tip jar located on the quality review and print station. 4. Jake is an IRS tax law-certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three or four weeks longer than the refund being direct deposited. Jill asks Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do? a. Jake can offer to use his account to receive the direct deposit, and turn the money over to Jill once the refund is deposited. b. Jake should explain that a taxpayer’s federal or state refund cannot be deposited into a VITA/TCE volunteer’s bank account and she will have to open an account in her own name to have the refund direct deposited. c. Jake can suggest she borrow a bank account number from a friend because the taxpayer’s name does not need to be on the bank account. 5. Max prepares a tax return for Ali at a VITA/TCE site. He finds out during the interview that Ali has no health insurance. After Ali leaves the site, Max writes her name and contact information down to take home to his wife who sells health insurance for profit. Which of the following statements is true? a. There is no violation to the Volunteer Standards of Conduct (VSC) unless Max’s wife makes a big commission on the sale of health insurance to Ali. b. Max has violated the VSC because he is using confidential information to engage in a financial transaction to further his own or another’s personal interest. c. Max is doing Ali a favor by using her personal information to secure business for his wife. d. Information a taxpayer provides at a VITA/TCE site can be used for the volunteer’s personal gain. 14 Standards of Conduct (Ethics) 6. Bob, an IRS tax law-certified volunteer preparer, told the taxpayer that cash income does not need to be reported because the IRS does not know about it. Bob indicated NO cash income on Form 13614-C. Bob prepared a tax return excluding the cash income. Jim, the designated quality reviewer, was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Who has violated the Volunteer Standards of Conduct? a. Bob, the tax law-certified volunteer who prepared the return. b. Jim, the designated quality reviewer who was unaware of the cash income when he reviewed the return. c. Betty, the site coordinator. d. No one has violated the Volunteer Standards of Conduct. 7. Sue, a VITA/TCE site coordinator, was watching the local news when she saw Aaron, a new tax law-certified volunteer, in a story about several bank employees being arrested for suspicion of embezzlement. She saw Aaron being led out of the bank in handcuffs. Three days later, Sue is shocked when she sees Aaron show up at the site ready to volunteer, apparently out on bond. She pulls Aaron aside and explains that his arrest on suspicion of embezzlement could have a negative effect on the site and therefore she must ask him to leave the site. Sue uses the external referral process to report the details to IRS-SPEC by sending an email to WI.Voltax@irs.gov. Did Sue take appropriate actions as the site coordinator? a. Yes b. No 8. Heidi, a VSC-certified volunteer, is working at the intake station. As part of her duties, she is required to explain to the taxpayer what they are expected to do today as part of the return preparation process. What should Heidi tell them? a. Form 13614-C, Intake/Interview & Quality Review Sheet, must be completed prior to having the return prepared. b. You will be interviewed by the return preparer and asked additional questions as needed. c. You need to participate in a quality review of your tax return by someone other than the return preparer. d. All of the above. 9. During the intake process, the volunteer should verify the taxpayer (and spouse, if applicable) have photo identification. Additionally, taxpayers must provide verification of taxpayer identification number (SSN or ITIN) for everyone who will be on the tax return. a. True b. False Standards of Conduct (Ethics) 15 10. Mary, a VSC-certified greeter, reviews the taxpayer’s completed Form 13614-C, page 2, to identify what potential volunteer certification level is needed for this tax return. Mary sees the taxpayer has checked the “yes” box indicating he has selfemployment income and the certification level next to the question is (A). All other questions answered “yes” have a (B) certification. When Mary assigns the return to a tax preparer, what tax law certification level should the tax preparer have? a. Advanced b. Basic c. It doesn’t matter, any level is fine d. No tax law certification is necessary 16 Standards of Conduct (Ethics) Volunteer Standards of Conduct Retest Questions Directions Using your resource materials, answer the following questions: 1. Which volunteers must pass the Volunteer Standards of Conduct (VSC) certification test? a. Site coordinators/local coordinators b. Quality reviewers and tax return preparers c. Greeters or client facilitators d. All VITA/TCE site volunteers must pass the VSC certification test 2. Failure of a VITA/TCE volunteer to comply with the Volunteer Standards of Conduct could result in which of the following? a. The volunteer’s removal from the VITA/TCE Programs. b. The volunteer’s inclusion in the IRS Volunteer Registry to bar future VITA/TCE activity indefinitely. c. Termination of the sponsoring organization’s partnership with the IRS. d. All of the above may be considered an appropriate action depending on the type of violation and the sponsoring organization’s corrective actions. 3. Is having a donation/tip jar at the quality review station within the VITA/TCE site a violation of the Volunteer Standards of Conduct? a. Yes b. No 4. Maggie wants her tax refund quickly; however, she doesn’t have a bank account for direct deposit. She asks Josh, the tax law-certified preparer, to deposit her refund into his checking account and turn the funds over to her when received. If Josh agrees to do this, has he violated any of the Volunteer Standards of Conduct? a. Yes b. No Standards of Conduct (Ethics) 17 5. Pat is a paid tax preparer in the community; he also gives back to the community by serving as an IRS tax law-certified volunteer tax preparer at a VITA/TCE site. While conducting the interview with the taxpayer, Pat discovers the taxpayer’s small business will generate a loss, making the return out of scope for the VITA/ TCE Programs. Pat explains to the taxpayer that the tax return cannot be prepared at the VITA/TCE site, but he will offer the taxpayer a discount at his paid tax preparation business down the road. Has Pat violated the Volunteer Standards of Conduct (VSC)? a. Yes, it is a violation of the VSC for Pat to solicit business from any taxpayer at the VITA/TCE site. b. No, it is not a violation since the return cannot be prepared at the site. c. No, none of the VSC addresses soliciting business while volunteering at the VITA/TCE site. 6. Ann, an IRS tax law-certified tax preparer, told the taxpayer that cash income does not need to be reported because the IRS will never know about it. Ann indicated NO cash income on Form 13614-C. Ann prepared the return without the cash income. The designated quality reviewer was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Did the designated quality reviewer violate the Volunteer Standards of Conduct? a. Yes b. No 7. Jan, a greeter, overheard an IRS tax law-certified volunteer, Jim, trying to sell insurance to a taxpayer he was helping. Jim is an insurance agent in the community. Jan feels like Jim was pushy, made the taxpayer uncomfortable, and violated Volunteer Standard of Conduct #3. What should Jan do? a. Make an announcement to the taxpayers in the waiting room to ignore Jim if he tries to sell them insurance. b. Tell the site coordinator what she heard, so he can immediately remove Jim from the site and report the incident using the external referral process by sending an email to WI.Voltax@irs.gov. c. Mind her own business and do nothing. 8. Explaining the intake/interview and quality review process is important so the taxpayer understands they are expected to: a. Have a completed Form 13614-C, Intake/Interview & Quality Review Sheet, prior to having the return prepared. b. Answer the tax preparer’s additional questions during the interview. c. Participate in the quality review of their tax return. d. All of the above. 18 Standards of Conduct (Ethics) 9. During the intake process, which of the following should the volunteer verify that the taxpayer (and spouse, if applicable) has with them to ensure the taxpayers can be served that day? a. Photo identification for both b. Social Security or taxpayer identification number verification documents for everyone listed on the return c. All tax statement documents, including Forms W-2, 1099-R, etc. d. All of the above 10. To ensure quality service and accurate return preparation, every site is required to have a process for assigning taxpayers to IRS tax law-certified preparers who are certified at or above the level required to prepare their tax return. a. True b. False Standards of Conduct (Ethics) 19 20 Standards of Conduct (Ethics) Standards of Conduct (Ethics) 21 22 Standards of Conduct (Ethics) Intake / Interview and Quality Review Test Questions Directions Review the Intake/Interview and Quality Review training and answer the following questions. 1. All IRS-certified volunteer preparers participating in the VITA/TCE programs must use Form 13614-C along with an effective interview for every return prepared at the site. a. True b. False 2. What should the certified volunteer preparer do before starting the tax return? a. Make sure all questions on Form 13614-C are answered. b. Change “Unsure” answers to “Yes” or “No” based on a conversation with the taxpayer. c. Complete all applicable Certified Volunteer Preparer shaded-area questions on Form 13614-C. d. All of the above. 3. When reviewing Form 13614-C, you see the “Interest” question is marked “Yes” and the taxpayer gives you a Form 1099-INT. You should ask the taxpayer if they had any other interest income. a. True b. False 4. VITA/TCE sites are required to conduct Quality Reviews: a. Of all the returns prepared by volunteers who have less than two years of experience preparing returns. b. Of every return prepared at the site. c. Only when there is a Quality Reviewer available. d. Of all returns prepared by volunteers with certification levels below Advanced, Military, or International. 5. You do not need to see proof of cash donations made by a taxpayer if you feel that the information is not unusual or questionable. a. True b. False 6. In most cases a volunteer must review photo identification for every taxpayer(s) to deter the possibility of identity theft. a. True b. False Intake / Interview Test 23 7. When does the taxpayer sign the tax return? a. Before quality review and before being advised of their responsibility for the accuracy of the information on the return. b. Before quality review and after being advised of their responsibility for the accuracy of the information on the return. c. After quality review and before being advised of their responsibility for the accuracy of the information on the return. d. After quality review and after being advised of their responsibility for the accuracy of the information on the return. 8. The site is busy with many taxpayers waiting for assistance. All volunteers are busy preparing tax returns. Can you quality review the return you just prepared instead of waiting for someone else to quality review the return? a. Yes, if it is a returning taxpayer. b. Yes, with approval of the Site Coordinator. c. No, self review is never an acceptable quality review method. d. No, unless you are certified at the Advanced level. 9. Which of the following is true? a. Quality review can be conducted by a volunteer preparer certified at Basic when the tax return required an Advanced certification to prepare. b. Quality review is conducted after the taxpayer signs the tax return. c. Quality review is an effective tool for preparing an accurate tax return. d. Taxpayers do not need to be involved in the quality review process. 10. As part of the intake process, each site must: a. Have a process to ensure a return is within the scope of the VITA/TCE Programs. b. Identify the certification level needed to prepare a return. c. Have a process to ensure volunteers have the certification needed for the returns they prepare. d. All of the above. 24 Intake / Interview Test Intake / Interview and Quality Review Retest Questions Directions Review the Intake/Interview and Quality Review training and answer the following questions. 1. When should an IRS-certified volunteer preparer participating in the VITA/TCE Programs perform a complete interview of a taxpayer? a. Only when the taxpayer has questions. b. Only if the taxpayer has never visited your site. c. Only when the site is not busy. d. For every return prepared at the site. 2. The certified volunteer preparer should verify the return is within their certification level as part of the Intake/Interview process. a. True b. False 3. When reviewing Form 13614-C, you see the “Interest” question is marked “Yes” and the taxpayer gives you a Form 1099-INT. What should you do next? a. Input Form 1099-INT into tax software. b. Go to the next question on Form 13614-C. c. Ask the taxpayer if they had any other interest income. 4. VITA/TCE sites are required to conduct quality reviews of every return prepared at the site. a. True b. False 5. A taxpayer tells you that they donated $50 to their church but they did not bring proof of the donation. This information along with all other information gathered during your interview does not seem unusual or questionable. As a tax preparer, you should: a. Send the taxpayer home to get proof of their donation. b. Prepare the return giving credit for the donation without seeing proof. c. Prepare their return without giving them credit for the donation. Intake / Interview Retest 25 6. What information must a volunteer review to deter the possibility of identity theft? a. Form W-2 b. Photo identification c. Last year’s tax return d. Medicaid card 7. The taxpayer signs the tax return after quality review and after being advised of their responsibility for the accuracy of the information on the return. a. True b. False 8. You can quality review a tax return you just prepared instead of waiting for someone else to quality review the return. a. True b. False 9. Which of the following four critical processes for quality review is not correct: a. Engaging the taxpayer in the review process. b. Using Google as a main reference for tax law determinations. c. Using the Quality Review Checklist located in Publication 4012 as a guide while conducting the quality review. d. Comparing source documents provided by the taxpayer. 10. Completing a thorough interview before entering taxpayer information into the software helps avoid which of the following potential problems? a. The volunteer may not have the required certifications to prepare the return. b. The return may be Out of Scope. c. The taxpayer may not have all the information needed to prepare the return. d. All of the above. 26 Intake / Interview Retest Site Coordinator Test Questions Site Coordinator Certification Test Questions 1. The Site Coordinator Test is mandatory for a designated coordinator and optional for alternate coordinators. a. True b. False 2. The Site Coordinator roles and responsibilities are in which Publication? a. Publication 5166, IRS Volunteer Quality Site Requirements b. Publication 1084, VITA/TCE Volunteer Site Coordinator Handbook c. Publication 4299, Privacy, Confidentiality and Civil Rights - A Public Trust d. Publication 4012, VITA/TCE Volunteer Resource Guide 3. Prior to signing and dating the Form 13615, Volunteer Standards of Conduct Agreement – VITA/TCE Programs, the sponsoring partner’s approving official must confirm government-issued photo identification and the required certification level of the volunteer for the Form 13615 to be valid. a. True b. False 4. If partner owned computers or IRS loaned computers or printers are lost or stolen, the partner is required to notify the IRS _____. Partners should provide all information that is readily available to the local SPEC Territory Office. a. Immediately or by the next business day b. Within 30 days or as soon as possible c. Before May 15th d. Before the end of the calendar year 5. All sites are required to have the following reference materials available for use at VITA/TCE sites in paper or electronic format: Publication 17, Publication 4012, Volunteer Tax Alerts (VTA), and Quality Site Requirement Alerts (QSRA). AARP Foundation Tax Aide uses CyberTax Alerts in lieu of VTAs and QSRAs. What other publication must be available at each site and contains information about the new security requirements at sites? Publication _____. (type only the number) Site Coordination Certification 27 Site Coordinator Certification: Test Questions 6. Coordinators are required to have a correct Quality Review process for 100% of the returns prepared at VITA/TCE sites. The two acceptable types of quality review are as follows: a. Self-Review and/or Peer to Peer Review b. Peer to Peer Review and/or Designated Review c. Designated Review and/or Self-Review d. Taxpayer Review and/or Designated Review 7. For a correct Intake, Interview, and Quality Review process, all questions in Parts I-V of the Form 13614-C, Intake/Interview & Quality Review Sheet must be verified and all “Unsure” answers must be addressed and changed to “Yes” or “No”. a. True b. False 8. It is acceptable to use IRS loaned equipment (including laptops and printers) outside of the scope of the VITA/TCE program, such as for personal use after site hours. a. True b. False 9. Which of the following are not qualifying certifications for Continuing Education Credits? a. Military b. Advanced c. Qualified Experienced Volunteer d. International 10. An approved VITA/TCE Security Plan must be available for review at every site ______. a. Annually b. Monthly c. Never d. Before the end of the filing season 11. The coordinator must ensure volunteer return preparer’s access to the tax preparation software is restricted to: a. Generally limit access outside of site operation hours b. Remove access to individuals no longer volunteering at the site c. None of the above d. Both a and b 28 Site Coordinator Certification Site Coordinator Certification: Test Questions 12. All WiFi or wireless connections at a VITA/TCE tax preparation site must be password protected at a minimum. a. True b. False 13. When conducting taxpayer interviews in close proximity, it is important to limit unauthorized access to taxpayer information and ensure privacy (i.e. positioning computer screens, protecting taxpayer documents and preventing others from hearing sensitive information). a. True b. False 14. When a volunteer is identified as violating one or more of the Volunteer Standards of Conduct, partners and coordinators should elevate the specifics to the local SPEC Territory Office for consideration to be added to the: a. Volunteer Link and Learn Taxes Certification list b. Volunteer Registry list c. Volunteer Milestone Recognition list d. Volunteer Ethics Training list 15. When a potential data breach occurs, site coordinators must contact their local SPEC Territory Office immediately upon confirmation of the incident. a. True b. False Site Coordinator Certification 29 Site Coordinator Certification Retest Questions 1. Coordinators and alternate coordinators are required to pass with a score of 80% or higher, which of the following: a. Volunteer Standards of Conduct Test b. Site Coordinator Test c. Both a and b d. None of the above 2. Publication 5166, IRS Volunteer Quality Site Requirements, is the primary resource for coordinator roles and responsibilities. a. True b. False 3. Form 13615, Volunteer Standards of Conduct Agreement – VITA/TCE Programs is not valid until the sponsoring partner’s approving official signs and dates the form after confirming the volunteer’s______________. a. Government-issued photo identification b. Certification levels on Form 13615, Volunteer Standards of Conduct Agreement- VITA/TCE Programs c. Government-issued photo identification and certification levels on Form 13615, Volunteer Standards of Conduct Agreement - VITA/TCE Programs d. None of the above 4. All partner-owned computers or loaned IRS computers and printers that are lost or stolen, must be reported to the local SPEC Territory Office immediately or by the next business day. a. True b. False 5. The use of reference materials is an important key to preparing accurate tax returns and to research security requirements. In addition to Volunteer Tax Alerts and Quality Site Requirement Alerts (AARP Foundation Tax Aide uses CyberTax Alerts), which reference materials are required to be available for use at each site? a. Pub 4012, VITA/TCE Volunteer Resource Guide and Pub 17, Your Federal Income Tax (For Individuals) b. Pub 1084, VITA/TCE Volunteer Site Coordinator Handbook and Pub 5166, IRS Volunteer Quality Site Requirements c. Pub 4299, Privacy, Confidentiality and Civil Rights - A Public Trust d. Both a and c 30 Site Coordination Certification Site Coordinator Certification Retest Questions 6. The three acceptable types of quality review at VITA/TCE sites are: Designated Review, Peer to Peer Review, and Self Review. a. True b. False 7. During the Intake, Interview, and Quality Review process, all questions in Parts I-V of the Form 13614-C, Intake/Interview & Quality Review Sheet must be addressed and marked as: a. Yes b. No c. Unsure d. Both a and b 8. The use of IRS loaned equipment (including laptops and printers) is restricted to the preparation and filing of electronic tax returns and related program activities that support the VITA/TCE free tax preparation program. IRS loaned equipment may not be used for commercial purposes, games, or other personal use. a. True b. False 9. The new Qualified Experienced Volunteer Test is not a qualifying certification for receiving Continuing Education Credits. a. True b. False 10. The VITA/TCE Security Plan must be updated monthly by the site coordinator. a. True b. False 11. Coordinators must use the security features in the tax software to generally restrict volunteer’s access to the software outside of site operating hours. a. True b. False Site Coordination Certification 31 Site Coordinator Certification: Retest Questions 12. IRS sponsored free tax preparation sites must use the following WiFi or wireless connection: a. Public access WiFi or wireless connection b. Password protected WiFi or wireless connection c. Unsecured wired internet connection d. Unsecured volunteer Hotspot wireless connection 13. Volunteers must ensure that taxpayer privacy is protected when sharing personally identifiable information (PII). During conversations with taxpayers in close proximity,______ should not be discussed out loud. a. SSNs b. Addresses c. Bank account numbers d. All of the above 14. Volunteers who violate the Volunteer Standards of Conduct or commit certain unethical actions, must be reported to the local SPEC Territory Office for consideration to be added to the Volunteer Registry and removed from the VITA/TCE program for a period of one year. a. True b. False 15. What are examples of potential security breaches that would need to be referred to the local SPEC Territory Office? a. Loss of computer containing PII b. Loss of computer bag containing tax returns c. Loss of taxpayer information d. All of the above 32 Site Coordination Certification Basic Course Scenarios and Test Questions Directions The first five scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios. Basic Scenario 1: Sheldon and Odessa Sanford Interview Notes • Sheldon and Odessa Sanford are married and elect to file Married Filing Jointly. • Sheldon is 73 years old and Odessa is 64 years old. Odessa earned $33,000 in wages. • After 30 years of service, Sheldon retired from his job on February 1, 2018. During his career, Sheldon contributed pre-tax dollars to a qualified 401(k) retirement plan through his employer. His retirement is fully taxable. Sheldon also received Social Security benefits of $7,600. • Sheldon and Odessa are not blind and cannot be claimed as dependents by another taxpayer. • Sheldon and Odessa are U.S. citizens and have valid Social Security numbers. Basic Scenario 1: Test Questions 1. Sheldon must take a required minimum distribution from his retirement plan by December 31, 2020 to avoid an additional tax due. a. True b. False 2. Sheldon and Odessa’s standard deduction is $________. Basic Scenarios 33 Basic Scenario 2: Marsha Perry Interview Notes • Marsha is 23 years old and single. She cannot be claimed as a dependent by another taxpayer. • Marsha earned wages of $18,500 and had $1,500 of federal income tax withholding in tax year 2020. • Marsha gave birth to Shelby on November 10, 2020. • Marsha paid all the cost of keeping up a home and support for Shelby. • Shelby and Marsha are U.S. citizens and have valid Social Security numbers. • Marsha filed Single with no dependents on her 2019 tax return and received a $1,200 Economic Impact Payment in May 2020. Basic Scenario 2: Test Questions 3. Which of the following statements is true? a. Marsha is required to file a tax return. b. Marsha is not required to file a tax return, but should file a tax return to claim a refund of her federal income tax withholding. c. Marsha does not qualify for the earned income credit because she is under the age of 25. d. Both a and c. 4. Marsha qualifies for the recovery rebate credit of $500 for Shelby. Note: Congress may have enacted additional legislation that will affect taxpayers after this publication went to print. Please answer questions based on the information provided in Publication 4491, VITA/TCE Training Guide and Publication 4012, VITA/ TCE Resource Guide. a. True b. False 34 Basic Scenarios Basic Scenario 3: Aiden and Sophia Duke Interview Notes • Aiden and Sophia are married and they have always filed Married Filing Jointly. • Aiden died May 5, 2020 at the age of 58. Sophia, age 56, has not remarried. • Aiden earned $5,000 in wages and Sophia earned $51,000 in wages. • Sophia paid all the cost of keeping up a home and provided all the support for their two children, Mia and Oliver, who lived with them all year. • Mia is 11 years old and Oliver is 15 years old. • Sophia does not have enough deductions to itemize, but she did make a $500 cash charitable contribution to a qualified charitable organization in tax year 2020. • Aiden, Sophia, Mia, and Oliver are all U.S. citizens with valid Social Security numbers. Basic Scenario 3: Test Questions 5. What is most advantageous filing status allowable that Sophia can claim on the tax return for tax year 2020? a. Single b. Head of Household c. Qualifying Widow(er) d. Married Filing Jointly 6. What amount can Sophia deduct as a charitable contribution adjustment? a. $0 b. $250 c. $300 d. $500 Basic Scenarios 35 Basic Scenario 4: Benjamin and Amelia Hopkins Interview Notes • Benjamin and Amelia Hopkins have been married since 2016. • Benjamin is a U.S. citizen with a valid Social Security number. Amelia is a resident alien with an Individual Taxpayer Identification Number (ITIN). They elect to file Married Filing Jointly. • Benjamin worked in 2020 and earned wages of $25,000. Amelia worked part-time and earned wages of $15,000. • They have two children: Harper, who is 9 years old, and Evelyn, who is 12 years old. • Both children were supported by their parents all year. Harper is a U.S. citizen and has a valid Social Security number. Evelyn is a resident alien and has an ITIN. • Benjamin, Amelia, Harper, and Evelyn lived together in the U.S. all year. Basic Scenario 4: Test Questions 7. Which credit(s) can the Hopkins claim on their 2020 tax return? a. Child tax credit for Harper b. Credit for other dependents for Evelyn c. Both a and b d. Neither a nor b 8. Are the Hopkins eligible to claim the earned income credit? a. Yes, because Benjamin has a Social Security number. b. Yes, because everyone has a taxpayer identification number. c. No, because their income is too high. d. No, because Amelia has an ITIN. 36 Basic Scenarios Basic Scenario 5: Lucas and Abagail Brown Interview Notes • Lucas and Abagail are married and want to file a joint return. • Lucas earned $35,000 in wages and Abagail earned $20,000 in wages. • Lucas and Abagail have three children. Their twin sons, Mason and Logan, are both 4 years old. Their oldest son, Warren, is 17 years old. • Mason, Logan, and Warren lived with their parents all year and did not provide more than half of their own support. • Lucas and Abagail paid $5,000 in daycare for Mason and Logan. The statement from the daycare provider includes the provider’s name, address, valid Employer Identification Number, and the amount paid for Mason and Logan’s care. • Lucas, Abagail, Mason, Logan, and Warren are all U.S. citizens with valid Social Security numbers. Basic Scenario 5: Test Questions 9. The Browns qualify for which of the following credits? a. Earned income credit b. Child and dependent care credit c. Both a and b d. Neither a nor b 10. The refundable additional child tax credit is limited to $1,400 per child. a. True b. False Basic Scenarios 37 Basic Scenario 6: Daniel and Avery Emory Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Daniel, age 64 and Avery, age 53, are married. They elect to file Married Filing Jointly. • Daniel is retired. He received Social Security benefits, a pension, and wages from a part-time job. • Avery was a full-time elementary school teacher and paid $700 out of pocket for classroom supplies. • Avery is paying off a student loan that she took out when she attended college for her bachelor’s degree. • Daniel and Avery have two sons, Jackson, age 19 and Matthew, age 16. Matthew lived at home the entire year. Jackson is a full-time college student in his second year of study. He is pursuing a degree in Accounting and does not have a felony drug conviction. He received a Form 1098-T for 2019. Box 2 was not filled in and Box 7 was not checked. • Jackson lived in an apartment near campus during the school year and spent the summer at home with his parents. • Jackson received a scholarship and the terms require that it be used to pay tuition. Daniel and Avery paid the cost of Jackson’s tuition and course-related books in 2020 not covered by scholarship. They paid $90 for a parking sticker, $4,500 for a meal plan, $500 for textbooks purchased at the college bookstore, and $100 for access to an online textbook. • Daniel and Avery paid more than half the cost of maintaining a home and support for Jackson and Matthew. • Daniel and Avery do not have enough deductions to itemize on their federal tax return. They made a charitable contribution in the amount of $350 cash and they have a receipt for it. • The Emorys made four timely estimated tax payments of $125 each for tax year 2020. • The Emorys received a $2,900 Economic Impact Payment (EIP) in 2020. • If Daniel and Avery receive a refund, they would like to deposit it into their checking account. Documents from County Bank show that the routing number is 111000025. Their checking account number is 11337890. 38 Basic Scenarios Basic Scenarios 39 40 Basic Scenarios Basic Scenarios 41 42 Basic Scenarios Basic Scenarios 43 44 Basic Scenarios Basic Scenarios 45 46 Basic Scenarios Basic Scenario 6: Test Questions 11. What is the amount of Daniel and Avery’s standard deduction? $________. 12. What is the total amount of adjustments on the Emorys’ tax return? a. $250 b. $925 c. $1,175 d. $1,475 13. What is the total amount of the Emorys’ refundable American opportunity credit? $________. 14. Jackson qualifies Daniel and Avery to claim the credit for other dependents. a. True b. False 15. What is the total amount of federal income tax withholding? a. $1,525 b. $1,935 c. $1,945 d. $3,880 16. How much of Daniel’s Social Security is taxable? a. $0 b. $3,750 c. $6,375 d. $7,500 17. Daniel and Avery cannot claim Jackson for the earned income credit because he did not live with them for more than half the year and does not meet the residency test. a. True. Jackson only lived with his parents during the summer, which was less than six months. b. False. Attendance at school is considered a temporary absence and those months are counted as time that Jackson lived with his parents for the earned income credit. Basic Scenarios 47 Basic Scenario 7: Emma Davis Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Emma is 45 years old and single. • Emma has two children, Poppy, age 17 and Sebastian, age 25, who lived with her all year. Sebastian had a part-time job where he earned $4,500 in 2020. • Emma paid all the cost of keeping up the home and more than half the support for her children. • Emma received disability pension benefits. She has not reached the minimum retirement age of her employer’s plan. She also received interest and dividend income. • In early January 2020, she went to the local casino and won some money playing the slot machines. During the intake and interview, she mentioned that she had gambling losses of $700. • She does not have enough expenses to itemize for the 2020 tax year. • Emma made a $100 cash contribution to her daughter’s school to help buy masks for students. • Emma received a $1,700 Economic Impact Payment (EIP) in 2020. 48 Basic Scenarios Basic Scenarios 49 50 Basic Scenarios Basic Scenarios 51 52 Basic Scenarios Basic Scenarios 53 Basic Scenario 7: Test Questions 18. Emma’s disability pension is reported as wages and considered earned income for the purposes of the earned income credit. a. True b. False 19. What is Emma’s most advantageous filing status allowable? a. Married Filing Separately b. Qualifying widow(er) c. Head of Household d. Single 20. Which of the following statements are true? a. Qualified dividends are ordinary dividends. b. Qualified dividends qualify for lower, long-term capital gains tax rates. c. Qualified dividends are reported on Form 1099-DIV. d. All of the above. 21. Poppy and Sebastian are dependents on Emma’s tax return. a. True b. False 22. What is the amount of gambling winnings Emma must report on her 2020 tax return? a. $0 b. $5,800 c. $6,500 d. $7,200 23. Emma can prevent having a balance due next year by using the Tax Withholding Estimator at IRS.gov and then adjust her withholding. a. True b. False 24. Emma has a balance due of $________ on her 2020 tax return. 54 Basic Scenarios Basic Scenario 8: Aioki Ellis Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Aioki is 27 years old and married to John, age 30. • Aioki and John are not legally separated. Aioki does not want to file a joint return with John. • John lived with Aioki for ten months of the year. John moved out of Aioki’s home and in with his parents at: 458 Hasbro Ave., Your city, state, ZIP code. • Aioki and John do not live in a community property state. • Aioki does not know John’s Social Security number. (Hint: Refer Publication 4012, VITA/TCE Resource Guide) • Aioki’s seven-year-old daughter, Sofia, lived with her the entire year. • Aioki paid more than half the cost of keeping up a home and support for John and Sofia. • Aioki received unemployment compensation in January and February. She also received a distribution from her traditional IRA in January to pay for car repairs so she could have reliable transportation to and from her job interviews. In March, she began working as an administrative assistant and earned $23,000 in wages. • Aioki paid child and dependent care expenses for Sofia while she worked. • Aioki and John received a $2,900 Economic Impact Payment (EIP) in 2020 based on their 2019 Married Filing Joint return. • Aioki and Sofia were not medically or financially affected by the COVID-19 pandemic. • Aioki was a victim of ID theft and received an Identity Protection PIN in December 2020. Her assigned IP PIN is 222222. • Aioki and Sofia are U.S. citizens and have valid Social Security numbers. • If Aioki is entitled to a refund, she would like to deposit half into her checking account and half into her savings account. Documents from County Bank show that the routing number for both accounts is 111000025. Her checking account number is 113355779 and her savings account number is 224466880. Basic Scenarios 55 56 Basic Scenarios Basic Scenarios 57 58 Basic Scenarios Basic Scenarios 59 60 Basic Scenarios Basic Scenarios 61 Basic Scenario 8: Test Questions 25. Aioki qualifies for the retirement savings contribution credit. a. True b. False 26. The amount of taxable unemployment compensation is ________. a. Taxable income b. Reported on Form 1099-G, Certain Government Payments c. Subject to federal income tax withholding d. All of the above 27. Aioki must pay an additional _______ tax on the early distribution from her IRA. a. 0% b. 5% c. 10% d. 15% 28. Aioki qualifies for which of the following credits? a. Child tax credit b. Child and dependent care credit c. Earned income credit d. All of the above 29. Aioki can split her refund using Form 8888, Allocation of Refund (Including Savings Bonds Purchases). a. True b. False 30. Aioki must use the most current IP PIN to file her 2020 tax return. a. True b. False 62 Basic Scenarios Basic Course Retest Questions Directions The first five scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios. Basic Scenario 1: Sheldon and Odessa Sanford Interview Notes • Sheldon and Odessa Sanford are married and elect to file Married Filing Jointly. • Sheldon is 73 years old and Odessa is 64 years old. Odessa earned $33,000 in wages. • After 30 years of service, Sheldon retired from his job on February 1, 2018. During his career, Sheldon contributed pre-tax dollars to a qualified 401(k) retirement plan through his employer. His retirement is fully taxable. Sheldon also received Social Security benefits of $7,600. • Sheldon and Odessa are not blind and cannot be claimed as dependents by another taxpayer. • Sheldon and Odessa are U.S. citizens and have valid Social Security numbers. Basic Scenario 1: Retest Questions 1. The required minimum distribution rules are temporarily waived for tax year 2020. a. True b. False 2. What is the amount of Sheldon and Odessa’s standard deduction? a. $24,800 b. $26,100 c. $26,450 d. $27,400 Basic Scenarios Retest Questions 63 Basic Scenario 2: Marsha Perry Interview Notes • Marsha is 23 years old and single. She cannot be claimed as a dependent by another taxpayer. • Marsha earned wages of $18,500 and had $1,500 of federal income tax withholding in tax year 2020. • Marsha gave birth to Shelby on November 10, 2020. • Marsha paid all the cost of keeping up a home and support for Shelby. • Shelby and Marsha are U.S. citizens and have valid Social Security numbers. • Marsha filed Single with no dependents on her 2019 tax return and received a $1,200 Economic Impact Payment in May 2020. Basic Scenario 2: Retest Questions 3. Marsha is not required to file a return, but should file a return to claim a refund of her federal income tax withholding. a. True b. False 4. Marsha qualifies for the recovery rebate credit of $________ for Shelby. Note: Congress may have enacted additional legislation that will affect taxpayers after this publication went to print. Please answer questions based on the information provided in Publication 4491, VITA/TCE Training Guide and Publication 4012, VITA/ TCE Resource Guide. a. $300 b. $500 c. $600 d. $1,200 64 Basic Scenarios Retest Questions Basic Scenario 3: Aiden and Sophia Duke Interview Notes • Aiden and Sophia are married and they have always filed Married Filing Jointly. • Aiden died May 5, 2020 at the age of 58. Sophia, age 56, has not remarried. • Aiden earned $5,000 in wages and Sophia earned $51,000 in wages. • Sophia paid all the cost of keeping up a home and provided all the support for their two children, Mia and Oliver, who lived with them all year. • Mia is 11 years old and Oliver is 15 years old. • Sophia does not have enough deductions to itemize, but she did make a $500 cash charitable contribution to a qualified charitable organization in tax year 2020. • Aiden, Sophia, Mia, and Oliver are all U.S. citizens with valid Social Security numbers. Basic Scenario 3: Retest Questions 5. Qualifying Widow(er) is the most advantageous filing status Sophia can claim on the tax return for tax year 2020. a. True b. False 6. Sophia can deduct a charitable contribution as an adjustment in the amount of $300. a. True b. False Basic Scenarios Retest Questions 65 Basic Scenario 4: Benjamin and Amelia Hopkins Interview Notes • Benjamin and Amelia Hopkins have been married since 2016. • Benjamin is a U.S. citizen with a valid Social Security number. Amelia is a resident alien with an Individual Taxpayer Identification Number (ITIN). They elect to file Married Filing Jointly. • Benjamin worked in 2020 and earned wages of $25,000. Amelia worked part-time and earned wages of $15,000. • They have two children: Harper, who is 9 years old, and Evelyn, who is 12 years old. • Both children were supported by their parents all year. Harper is a U.S. citizen and has a valid Social Security number. Evelyn is a resident alien and has an ITIN. • Benjamin, Amelia, Harper, and Evelyn lived together in the U.S. all year. Basic Scenario 4: Retest Questions 7. Evelyn is a qualifying child for the child tax credit. a. True b. False 8. The Hopkins are eligible to claim the earned income credit. a. True b. False 66 Basic Scenarios Retest Questions Basic Scenario 5: Lucas and Abagail Brown Interview Notes • Lucas and Abagail are married and want to file a joint return. • Lucas earned $35,000 in wages and Abagail earned $20,000 in wages. • Lucas and Abagail have three children. Their twin sons, Mason and Logan, are both 4 years old. Their oldest son, Warren, is 17 years old. • Mason, Logan, and Warren lived with their parents all year and did not provide more than half of their own support. • Lucas and Abagail paid $5,000 in daycare for Mason and Logan. The statement from the daycare provider includes the provider’s name, address, valid Employer Identification Number, and the amount paid for Mason and Logan’s care. • Lucas, Abagail, Mason, Logan, and Warren are all U.S. citizens with valid Social Security numbers. Basic Scenario 5: Retest Questions 9. The Browns are eligible to claim the earned income credit and child and dependent care credit. a. True b. False 10. The refundable amount of the additional child tax credit is limited to $________ per child. Basic Scenarios Retest Questions 67 Basic Scenario 6: Retest Questions Directions Read the scenario information for Daniel and Avery Emory beginning on page 38. 11. Daniel and Avery’s standard deduction is: a. $24,800 b. $26,100 c. $26,450 d. $27,400 12. What is the total amount of adjustments on the Emorys’ tax return? $________. 13. Daniel and Avery’s total qualified education expenses used to calculate the American opportunity credit are $2,500. a. True b. False 14. Daniel and Avery can claim the child tax credit for Matthew. a. True b. False 15. Which of the following items are included in the total payments on Daniel and Avery’s tax return? a. Federal income tax withheld from Forms W-2 and 1099 b. $500 estimated tax payment c. Refundable credits d. All of the above 16. The taxable amount of Daniel’s Social Security is $7,500. a. True b. False 17. Attendance at school is considered a temporary absence and those months are counted as time that Jackson lived with his parents for the earned income credit. a. True b. False 68 Basic Scenarios Retest Questions Basic Scenario 7: Retest Questions Directions Read the scenario information for Emma Davis beginning on page 48. 18. What amount is reported as wages on Emma’s tax return? $________. 19. Single is the most advantageous filing status Emma is eligible to claim on her tax return. a. True b. False 20. Qualified dividends qualify for lower, long-term capital gain tax rates. a. True b. False 21. Who qualifies as Emma’s dependent? a. Poppy b. Sebastian c. Both a and b d. Neither a nor b 22. Emma’s gambling losses reduced the amount of her gambling winnings reported as taxable income. a. True b. False 23. What actions should Emma take to prevent having a balance due next year? (Choose the best answer.) a. She should use the IRS Tax Withholding Estimator and adjust her withholding. b. Emma should decrease the amount of withholding on her form W-4P for next year. c. Emma should ask friends what they are doing to avoid having a balance due. d. Emma should not do anything to prevent having a balance next year. 24. Emma should not file her tax return until she can pay the entire balance due. a. True b. False Basic Scenarios Retest Questions 69 Basic Scenario 8: Retest Questions Directions Read the scenario information for Aioki Ellis beginning on page 55. 25. What is the amount of Aioki’s credit on Form 8880, Credit for Qualified Retirement Savings Contributions? a. $0 b. $200 c. $2,000 d. $4,000 26. What is the taxable amount of unemployment compensation? $________. 27. Aioki is subject to the additional 10% tax on early distributions. a. True b. False 28. Aioki is not eligible for the child and dependent care credit and earned income credit because her filing status is Married Filing Separately. a. True b. False 29. Aioki wants to split the refund between her savings and checking accounts. How is this accomplished, if possible? a. Splitting a refund is not possible. b. Aioki does not have an overpayment on her return. c. This can only be accomplished if filing a paper return. d. Complete Form 8888, Allocation of Refund (Including Savings Bond Purchases). 30. Aioki can use her IP PIN from any year to file her 2020 tax return. a. True b. False 70 Basic Scenarios Retest Questions Advanced Course Scenarios and Test Questions Directions The first five scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios. Advanced Scenario 1: Rebecca Washington Interview Notes • Rebecca was single on December 31, 2020. Her husband, Doug Washington, passed away on March 20, 2019, and she has not remarried. Rebecca and Doug have always filed Married Filing Jointly in previous tax years. • Rebecca and Doug have two children, Sara, age 15 and David, age 11. Rebecca is 45 years old. • Rebecca earned $36,000 in wages in tax year 2020. This was her only source of income. Each of the children received $200 in Social Security Survivor Benefits for the year, which Rebecca put into a college fund for their education. • Rebecca paid all the cost to keep up her home and support for Sara and David. • Rebecca received $2,200 in an Economic Impact Payment. • In order to work, Rebecca paid $3,100 to ABC Academy for after-school child care. The statement from the care provider includes the provider’s name, address, valid Employer Identification Number, and the amount paid for child care expenses for David ($2,500) and Sara ($600). • They all are U.S. citizens and have valid Social Security numbers. No one in the family has a disability. Advanced Scenario 1: Test Questions 1. What is the most beneficial filing status allowable for Rebecca? a. Single b. Married Filing Jointly c. Head of Household d. Qualifying Widow(er) 2. Rebecca has $3,100 in qualifying child care expenses for the child and dependent care credit. a. True b. False Advanced Scenarios 71 Advanced Scenario 2: Pat and Terri Jefferson Interview Notes • Pat and Terri are married and want to file a joint return. • Pat is a U.S. citizen and has a valid Social Security number. Terri is a resident alien and has an ITIN. • Pat has a child from a previous marriage, Jacob, age 17. • Pat and Terri have a child together, Jill, age 12. • Jacob and Jill are U.S. citizens and have valid Social Security numbers. • Pat received a total of $3,300 in unemployment compensation when he lost his job due to the coronavirus pandemic. He also earned $22,000 in wages. • Terri did not have any income. • Pat and Terri provided all the support for their two children. Advanced Scenario 2: Test Questions 3. Pat and Terry are eligible for which of the following credits? Select the best answer. a. Credit for other dependents b. Child tax credit c. Earned income credit d. Both a and b 4. Pat’s unemployment compensation is not taxable this year because it was received as a result of the coronavirus pandemic. a. True b. False 72 Advanced Scenarios Advanced Scenario 3: Janice Billings and Andrew Noble Interview Notes • Janice Billings, age 40, and Andrew Noble, age 45 are engaged and lived together the entire year. • Janice moved her mother Dorothy in with them on December 1, 2019, due to Dorothy’s Alzheimer’s diagnosis. • Janice received Medicaid waiver payments of $15,000 for the care of her mother. The payments were reported on Form W-2. • Dorothy’s only income was Social Security in the amount of $13,000, which she used for her own support. • Andrew earned wages of $25,000 and was enrolled the entire year in a high deductible health plan (HDHP) with self-only coverage. • During the year, Andrew contributed $1,500 to his Health Savings Account (HSA). Andrew’s mother also contributed $1,000 to his HSA account. • Andrew’s Form W-2 shows $500 in Box 12 with code W. He has Form 5498-SA showing $3,000 in Box 2. • Andrew took a distribution from his HSA to pay his unreimbursed expenses: – Urgent care bill: $375 – Hospital bill: $1,200 – Prescription medicine: $578 – Dental bills for routine exams: $168 – Over-the-counter allergy medication: $79 – Yoga Classes: $600 • Janice, Andrew, and Dorothy are U.S. citizens with valid Social Security numbers. Advanced Scenario 3: Test Questions 5. Which of the following statements is true? a. Janice’s Medicaid waiver payments must be included in taxable income in order to be considered earned income when calculating the earned income credit. b. Janice’s Medicaid waiver payments can never be considered earned income when calculating the earned income credit. c. Janice’s Medicare waiver payments are not included in taxable income and are never considered earned income when calculating the earned income credit. d. Janice’s Medicaid waiver payments are not included in taxable income but can be considered earned income for calculating the earned income credit. Advanced Scenarios 73 6. What is the amount of Andrew’s HSA deduction on Form 8889, Part I, line 13? a. $1,500 b. $2,000 c. $2,500 d. $3,455 7. Andrew can identify the employer’s HSA contribution by the Code W in Box 12 on his Form W-2. a. True b. False 8. What is the total unreimbursed qualified medical expenses reported on Form 8889, Part II? a. $2,025 b. $2,153 c. $2,321 d. $2,400 74 Advanced Scenarios Advanced Scenario 4: Barbara Williams Interview Notes • Barbara is age 54 and was widowed in 1999. She owns her own home and provided all the cost of keeping up her home for the entire year. Her only income for 2020 was $29,000 in W-2 wages. • In January of 2020, Barbara’s daughter Jenny, age 25, and her granddaughter Molly, age 3, moved in and lived with her the entire year. Jenny’s only income for 2020 was $13,000 in unemployment compensation. Jenny provided over half of her own support. Molly did not provide more than half of her own support. • Barbara’s sister Claire is age 47. She lived with Barbara for the last 7 months of 2020. Her only income for 2020 was $26,350 in W-2 wages. She used this income to provide over half of her own support. • All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability. Advanced Scenario 4: Test Questions 9. Which individuals can make an agreement on who can claim Molly as a dependent? a. Barbara and Jenny b. Barbara and Claire c. Jenny and Claire d. Barbara, Jenny, and Claire 10. Who can claim the earned income credit for Molly? a. Claire, because she has the lower AGI b. Jenny, because she is Molly’s mother c. Barbara, if Jenny allows her to claim Molly as a dependent d. None of the above Advanced Scenarios 75 Advanced Scenario 5: Robert Adams Interview Notes • Robert is 41 years old and files as Head of Household. He is not blind. • His 2020 adjusted gross income (AGI) is $48,624, which includes gambling winnings of $200. • Robert would like to itemize his deductions this year. • Robert brings documentation for the following expenses: – $7,257 Hospital and doctor bills – $600 Contributions to Health Savings Account (HSA) – $2,325 Long Term Care Insurance premiums before age limitation applied – $2,970 State withholding (higher than Robert’s calculated state sales tax deduction) – $273 Personal property taxes based on value of vehicle – $700 Friend’s personal GoFundMe campaign to help with COVID-19 – $250 Cash contributions to the Red Cross – $100 FMV of clothing in good condition donated to the Salvation Army (Robert purchased clothing for $800) – $7,025 Mortgage interest – $797 Real estate tax – $260 Mortgage Insurance Premiums (PMI) – $120 Homeowners association fees – $3,500 Gambling losses 76 Advanced Scenarios Advanced Scenario 5: Test Questions 11. If Robert chooses to itemize, which of the following is he eligible to claim as a deduction on Schedule A? a. $700 GoFundMe donation b. $3,500 Gambling losses c. $120 Homeowner’s Association fees d. $260 Mortgage Insurance Premiums (PMI) 12. If Robert chooses not to itemize, what is the amount that he can deduct as an above-the-line charitable contribution adjustment in 2020? a. $250 b. $300 c. $350 d. $1,050 Advanced Scenarios 77 Advanced Scenario 6: Harris and Carly Franklin Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Harris and Carly Franklin are married and choose to file Married Filing Jointly on their 2020 tax return. • Harris and Carly have one son Billy and a newborn baby Cristina born in 2020. • Carly was a kindergarten teacher at a private school through May and decided not to return after the birth of her child. • Carly worked a total of 800 hours in 2020 (January - May). She spent $375 on unreimbursed classroom expenses while she was employed. • In order to work, the Franklins paid child care expenses of $1,500 through May for Billy. They also paid $750 in child care expenses for Cristina while Carly volunteered in Billy’s class in November. • The Franklins paid $3,960 in student loan interest in 2020. • In August of 2020, Harris enrolled in college to pursue a bachelor’s degree in Accounting. He provided Form 1098-T and an account statement from the college that included additional expenses. • Harris had no previous post-secondary education. Gordon College is a qualified educational institution. • Harris does not have a felony drug conviction. • The Franklins received a $2,900 Economic Impact Payment (EIP) in 2020. • Harris purchased insurance for the entire family through the Marketplace and received Form 1095-A. • They are all U.S. citizens with valid Social Security numbers. 78 Advanced Scenarios Advanced Scenarios 79 80 Advanced Scenarios Advanced Scenarios 81 82 Advanced Scenarios Advanced Scenarios 83 84 Advanced Scenarios Advanced Scenarios 85 86 Advanced Scenarios Advanced Scenario 6: Test Questions 13. What is the amount of Carly’s student loan interest deduction on Form 1040, Schedule 1? $________. 14. How do educator expenses affect Carly’s tax return? a. Carly can claim these expenses as a miscellaneous itemized deduction on her Schedule A. b. These expenses cannot be claimed on her 2020 tax return because she does not meet the requirements to claim the educator expenses. c. $250 is deducted as an adjustment to income on Form 1040, Schedule 1. d. Carly is entitled to deduct the full $375 as an adjustment to income on Form 1040, Schedule 1. 15. What is the amount of qualified child care expenses used in the calculation of the Franklin’s Form 2441, Child and Dependent Care Expenses? a. $0 b. $750 c. $1,500 d. $2,250 16. The refundable portion of the American opportunity credit located on Form 8863, Education Credit is $________. 17. The amount of the Franklin’s net premium tax credit on Form 8962, Premium Tax Credit is $________. 18. The Franklins can claim a recovery rebate credit of $________ for Cristina on their 2020 tax return. Note: Congress may have enacted additional legislation that will affect taxpayers after this publication went to print. Please answer questions based on the information provided in Publication 4491, VITA/TCE Training Guide and Publication 4012, VITA/ TCE Resource Guide. 19. Do the Franklins qualify for the earned income credit? a. Yes, they meet all the qualifications to receive the credit. b. No, their income is too high. Advanced Scenarios 87 Advanced Scenario 7: Travis and Sylvia Kennedy Directions Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario. Note: When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Interview Notes • Travis is age 72 and blind. Sylvia is age 71. They are married and want to file a joint return. • The Kennedys had a balance due in 2019. They made 4 timely estimated tax payments of $250 each for tax year 2020. • Travis retired in 2013 and began receiving his pension on September 1st of that year. He explains that this is a joint survivor annuity. He has already recovered $9,551 in the cost of the plan. • The Kennedys have a consolidated broker’s statement. Their 2019 tax return shows a $17,362 long-term carryover loss. • Sylvia worked part-time as a greeter in a local store. • In February, Sylvia won $2,500 gambling at a casino. She also had additional lottery winnings of $215. • Sylvia has documented casino losses of $1,902 and she also purchased 5 lottery tickets during 2020 for $10 each. • Travis and Sylvia received $2,400 in an Economic Stimulus Payment. • If Travis and Sylvia have a refund, they would like to deposit it into their checking account. • Travis and Sylvia both have full year health care coverage through Medicare. 88 Advanced Scenarios Advanced Scenarios 89 90 Advanced Scenarios Advanced Scenarios 91 92 Advanced Scenarios Advanced Scenarios 93 94 Advanced Scenarios ABC INVESTMENTS 2020 TAX REPORTING STATEMENT 456 Pima Plaza Your City, YS ZIP Travis and Sylvia Kennedy 742 Red Rooster Road Your City, YS ZIP Account No. 111-222 Recipient ID No. 318-00-XXXX Payer’s Fed ID Number: 40-200XXXX Form 1099-DIV* 2020 Dividends and Distributions Copy B for Recipient (OMB NO. 1545-0110) 1aTotal Ordinary Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164.00 1b Qualified Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.00 2a Total Capital Gain Distributions (Includes 2b- 2d). . . . . . . . . . . . . . . . 250.00 2b Capital Gains that represent Unrecaptured 1250 Gain. . . . . . . . . . . . . . 0.00 2c Capital Gains that represent Section 1202 Gain. . . . . . . . . . . . . . . . . . . 0.00 2d Capital Gains that represent Collectibles (28%) Gain. . . . . . . . . . . . . . . 0.00 2 Nondividend Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 4 Federal Income Tax Withheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 5 Section 199A Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468.00 6 Investment Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 7 Foreign Tax Paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312.00 8 Foreign Country or U.S. Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 9 Cash Liquidation Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 10 Non-Cash Liquidation Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 11 Exempt Interest Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 12 Specified Private Activity Bond Interest Dividends. . . . . . . . . . . . . . . . . 0.00 13 State. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 State Identification No. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 State Tax Withheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Form 1099-MISC* 2020 Miscellaneous Income Copy B for Recipient (OMB NO. 1545-0115) 2 4 8 16 17 18 Royalties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Federal Income Tax Withheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Substitute Payments in Lieu of Dividends or Interest. . . . . . . . . . . . . . . 0.00 State Tax Withheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 State/ Payer’s State No.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . State Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Form 1099-INT* 2020 Interest Income Copy B for Recipient (OMB NO. 1545-0112) 1 2 3 4 5 6 7 8 9 10 14 Interest Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.00 Early Withdrawal Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Interest on U.S. Savings Bonds and Treas. Obligations. . . . . . . . . . . . . 0.00 Federal Income Tax Withheld. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Investment Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Foreign Tax Paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Foreign Country or U.S. Possession. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00 Tax-Exempt Interest . . . . . . . . . . . . . . . . . . ....
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