CHAPTER 7 – Questions and Answers

	Students - Here are 14 questions to test 	what you have learned!

			Press the buttons on the left to check your 			answers.

			If you answer correctly, I will tell you 				“Affirmative”.

			If you answer incorrectly, I will tell you 				“Negative”.

IT IS TIME TOPROCEED TO THE FIRST QUESTION

Question 1 - When you “terminate collection action” on a debt you are:

stopping all collection action on  the debt.

ceasing active collection on the debt.

C.	writing-off the debt.

“AFFIRMATIVE”

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Question 2 - Temporarily ceasing active collection on a debt is called:

A.	being lazy.

B.	currently-not-collectible.

C.	suspension.

“AFFIRMATIVE”

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Question 3 - All of the following are legitimate reasons for terminating collection action except:

A.	The debtor is discharged in bankruptcy.

B.	You cannot locate the debtor.

C.	Your boss tells you to finish action on the       	debt before you go on vacation.

D.	The debtor does not have the ability to pay 	any portion of the debt.

“AFFIRMATIVE”

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Question 4 - The term write-off refers to:

	A.	A decision by Santa Clause that a child should not 	receive a present for the upcoming Christmas.

   B.	A determination that a debtor does not have to 	pay a debt that is owed.

   C.	A determination that a debt has no value for 	accounting purposes and an agency’s action to 	reflect this determination in the agency’s 	accounting reports.

“AFFIRMATIVE”

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Question 5 - You may only write-off a debt after the debt has been terminated:

A.	True

B.	False

C.	True and False

“AFFIRMATIVE”

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Question 6 - According to OMB Circular No. A-129, how many classifications of write-off are there?

A. Two

B. Three

C.  This is a trick question - there is no such thing as OMB. 

“AFFIRMATIVE”

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Question 7 - The two classifications of write-off are called:

A.  Termination and currently-not-collectible.

B. Jack and Jill.

C.  Currently-not-collectible and close-out.

“AFFIRMATIVE”

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Question 8 - 	A debt is classified as “close-out”...

A. Before it is terminated.

B. When it is determined that the agency does not intend to take any further action to collect the debt.

C.  When it is determined that a debt is ineligible for the Treasury Offset Program.

“AFFIRMATIVE”

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Question 9 - A 1099-C is...

A. 	A form filed with the Internal Revenue Service used to report potential income  of a debtor whose debt has been closed-out.

B.	 A Federal Claims Collection Standards section dealing with termination of indebtedness.

C.	A new jumbo aircraft created by Boeing that can hold up to 1099 passengers.

“AFFIRMATIVE”

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Question 10 - The dollar threshold for mandatory 1099-C reporting is:

				A. $1.37

				B. $500

				C. $600

“AFFIRMATIVE”

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Question 11 - What is an “identifiable event”?

A.  A lineup at a police station where a witness to a crime identifies a suspect.

B. An event that triggers the requirement to report a discharge of indebtedness to IRS as potential income.

C. A verifiable UFO siting. 

“AFFIRMATIVE”

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Question 12 - How many identifiable events are there under IRS regulations?

			A. 6

			B. 8

			C.   Its not the quantity that matters, 		but the quality.

“AFFIRMATIVE”

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Question 13 - Which answer has each of the terms on the left matched to the appropriate source document on the right.

Active collection --- Federal Claims Collection Standards

		Discharge of Indebtedness --- Internal Revenue Code

		Currently-not-collectible --- OMB Circular No. A-129

         B.  Active collection --- OMB Circular No. A-129

		Discharge of Indebtedness --- Internal Revenue Code

		Currently-not-collectible --- Federal Claims Collection Standards

         C.   Active collection --- The Bone Collector

		 Discharge of Indebtedness --- A River Runs Through It

		 Currently-not-collectible --- The Merchant of Venice

“AFFIRMATIVE”

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Question 14 - If a debtor files for Chapter 11 bankruptcy protection, the agency should:

	A.  Close-out the debt and issue a 1099-C.

	B. Terminate collection action on the debt.

	C.  Write-off the debt.

	D.  Suspend collection action until the bankruptcy case is dismissed.

“AFFIRMATIVE”

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YOU HAVE FINISHED MY TUTORIAL.

YOU ARE A GOOD STUDENT AND DID WELL.

“HASTA LA VISTA, BABY!”

“NEGATIVE!”

HIT BACK ARROW AND TRY AGAIN