REG exam 2 questions & answers 100% CORRECT 2024/2025
can an oral contract be enforceable that takes longer than 1 year to complete? - ANSWERS1. yes, although under Statute of Frauds most contracts that cannot be completed within one year must be evidenced by writing, there is an exception if ...
can an oral contract be enforceable that takes longer than 1 year to complete? - ANSWERS1. yes,
although under Statute of Frauds most contracts that cannot be completed within one year must be
evidenced by writing, there is an exception if one party has FULLY PERFORMED his part of contract.
novation - ANSWERSnovation occurs when a new contract substitutes a new party for an old party in an
existing contact on the agreement of all parties.
an accord and satisfaction - ANSWERShappens when both parties agree to new terms that vary from
original contract such that fulfilling the terms of new agreement will discharge the old agreement
completely, it is an accord. When the agreement is fulfilled, the fulfillment is called satisfaction.
Circular 230 - ANSWERS1. an IRS publication entitled "Regulations Governing Practice before the IRS."
Addresses practice before the IRS of practitioners. It includes not only CPA, attorneys and enrolled
agents, but also enrolled actuaries, retirement plan agents and appraisers.
2. prohibits a practitioner from endorsing or negotiating refund checks issued to the client.
3. Unconscionability (sometimes known as unconscionable dealing/conduct in Australia) is a doctrine in
contract law that describes terms that are so extremely unjust, or overwhelmingly one-sided in favor of
the party who has the superior bargaining power, that they are contrary to good conscience.
Unconscionable fee is prohibited, but CONTINGENT FEE IS ALLOWED in Following situations:
a. an IRS examination or audit.
b. a claim solely for a refund of interest and/or penalties, or
c. a judicial proceeding arising under the internal Revenue Code.
4. Circular 230 DOES NOT prohibit referral or compensation agreement. It merely requires that any
compensation agreement or referral agreement between the practitioner and a promoter be disclosed.
, dischargeable and non-dischargeable debt under bankruptcy petition - ANSWERS1. bankruptcy
discharges most of pre-petition debits.
2. non-dischargeable debts include:
a. certain taxes
b. debt incurred by fraud
c. unscheduled debts
d. debts arising from crimes
e. fines and penalties
f. alimony/child support debts
g. and student loans
contingent fee - ANSWERSA contingent fee or contingency fee or conditional fee is any fee for services
provided where the fee is payable only if there is a favourable result. Although such a fee may be used in
many fields, it is particularly well associated with legal practice.
are mortgage payments on house title that's transferred to ex spouse from divorce decree taxable? -
ANSWERS1. No, because it is considered a property settlement and it's not taxable and nondeductible.
2. It is not considered alimony, which is taxable to receiver and deductible to payer.
section 179 expense election - ANSWERS1. for 2017, maximum amount of that can be expensed under
section 179 (immediate expensing) is $510,000, but that amount is reduced dollar for dollar for total
property placed into service in the year exceeds $2,030,000.
expensing for business meals and entertainment - ANSWERSEmployee's business expenses are
deductible as a miscellaneous itemized deduction (from AGI) subject to a 2% AGI floor. Meals and
entertainment expenses are also limited to a 50% deduction before being subject to the 2% floor.
modification of sales contract - ANSWERS1. If a sales contract has been modified, it is the contract as it
has been modified that determines whether a writing is required under the Statute of Frauds.
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