Evaluate IRS Examination And Appeals Processes Practice Test

An individual taxpayer receives a notice of deficiency after an IRS examination disallowed significant cash charitable contributions due to lack of written substantiation. The taxpayer wants to continue disputing the liability without paying first. Which step should the taxpayer take next in the appeals process?

An individual taxpayer is in an IRS field audit where the examiner questions whether rental real estate losses were properly limited due to passive activity rules and whether the taxpayer materially participated. The taxpayer provides a summary spreadsheet of hours but no underlying logs or calendars. Which factor would most likely affect the IRS's decision on the loss allowance?