Deck 2: Working With the Tax Law

Question 1

A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S. Court of Federal Claims. Only in the Tax Court can jurisdiction be obtained without first paying the assessed tax deficiency.

Answer 1

True

Question 2

Post­1984 letter rulings may be substantial authority for purposes of the accuracy­related penalty in § 6662.

Answer 2

True

Question 3

Regulations are generally issued immediately after a statute is enacted.

Answer 3

False

Question 4

Rules of tax law do not include Revenue Rulings and Revenue Procedures.

Question 5

Revenue Rulings issued by the National Office of the IRS carry the same legal force and effect as Regulations.

Question 6

A tax professional need not worry about the relative weight of authority within the various tax law sources.

Question 7

Temporary Regulations are only published in the Internal Revenue Bulletin.

Question 8

The first codification of the tax law occurred in 1954.

Question 9

Determination letters usually involve finalized transactions.

Question 10

The IRS is not required to make a letter ruling public.

Question 11

Technical Advice Memoranda deal with completed transactions.

Question 12

A letter ruling applies only to the taxpayer who asks for and obtains a letter ruling.

Question 13

Subchapter D refers to the "Corporate Distributions and Adjustments" section of the Internal Revenue Code.

Question 14

A taxpayer should always minimize his or her tax liability.

Question 15

The Code section citation is incorrect: § 212(1).

Question 16

A Revenue Ruling is a judicial source of Federal tax law.

Question 17

Revenue Procedures deal with the internal management practices and procedures of the IRS.

Question 18

In recent years, Congress has been relatively successful in simplifying the Internal Revenue Code.

Question 19

The following citation can be a correct citation: Rev. Rul. 95-271,1995-64 I.R.B. 18.

Question 20

Technical Advice Memoranda may not be cited as precedents by taxpayers.

Question 21

Texas is in the jurisdiction of the Second Circuit Court of Appeals.

Question 22

The "petitioner" refers to the party against whom a suit is brought.

Question 23

The term "petitioner" is a synonym for "defendant."

Question 24

There are 11 geographic U.S. Circuit Court of Appeals.

Question 25

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Question 26

The U.S. Tax Court meets most often in Washington, D.C.

Question 27

The research process should begin with a tax service.

Question 28

The granting of a Writ of Certiorari indicates that at least four members of the Supreme Court believe that an issue is of sufficient importance to be heard by the full court.

Question 29

A taxpayer can obtain a jury trial in the U.S. Tax Court.

Question 30

Electronic databases are most frequently searched by the keyword approach.

Question 31

The Index to Federal Tax Articles (published by Warren, Gorham, and Lamont) is available in print and electronic formats.

Question 32

The test for whether a child qualifies for dependency status is first conducted under the qualified child requirement.

Question 33

Three judges will normally hear each U.S. Tax Court case.

Question 34

Arizona is in the jurisdiction of the Eighth Circuit Court of Appeals.

Question 35

The IRS issues an acquiescence or nonacquiescence only for regular Tax Court decisions.

Question 36

There is a direct conflict between a Code section adopted in 2008 and a treaty with France (signed in 2012). The Code section controls.

Question 37

A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S. District Court.

Question 38

A U.S. District Court is the lowest trial court.

Question 39

The Golsen rule has been overturned by the U.S. Supreme Court.

Question 40

The following citation is correct: Larry G. Mitchell, 131 T.C. 215 (2008).

Question 41

Which statement is not true with respect to a Regulation that interprets the tax law?

A) Issued by the U.S. Congress.
B) Issued by the U.S. Treasury Department.
C) Designed to provide an interpretation of the tax law.
D) Carries more legal force than a Revenue Ruling.
E) All of the above statements are true.

Question 42

Deferring income to a subsequent year is considered to be tax avoidance.

Question 43

Subtitle A of the Internal Revenue Code covers which of the following taxes?

A) Income taxes.
B) Estate and gift taxes.
C) Excise taxes.
D) Employment taxes.
E) All of the above.

Question 44

Tax planning usually involves a completed transaction.

Question 45

Which of the following indicates that a decision has precedential value for future cases?

A) Stare decisis.
B) Golsen doctrine.
C) En banc.
D) Reenactment doctrine.
E) None of the above.

Question 46

In addressing the importance of a Regulation, an IRS agent must:

A) Give equal weight to the Code and the Regulations.
B) Give more weight to the Code rather than to a Regulation.
C) Give more weight to the Regulation rather than to the Code.
D) Give less weight to the Code rather than to a Regulation.
E) None of the above.

Question 47

The Internal Revenue Code was first codified in what year?

A) 1913.
B) 1923.
C) 1939.
D) 1954.
E) 1986.

Question 48

Tax bills are handled by which committee in the U.S. House of Representatives?

A) Taxation Committee.
B) Ways and Means Committee.
C) Finance Committee.
D) Budget Committee.
E) None of the above.

Question 49

Federal tax legislation generally originates in what body?

A) Internal Revenue Service.
B) Senate Finance Committee.
C) House Ways and Means Committee.
D) Senate Floor.
E) None of the above.

Question 50

The Regulation section of the CPA exam is approximately 60% Taxation and 40% Law & Professional Responsibilities.

Question 51

Which of the following is not an administrative source of tax law?

A) Field Service Advice.
B) Revenue Procedure.
C) Technical Advice Memoranda.
D) General Counsel Memorandum.
E) All of the above are administrative sources.

Question 52

Which of these is not a correct citation to the Internal Revenue Code?

A) Section 211.
B) Section 1222(1).
C) Section 2(a)(1)(A).
D) Section 280B.
E) All of above are correct cites.

Question 53

In § 212(1), the number (1) stands for the:

A) Section number.
B) Subsection number.
C) Paragraph designation.
D) Subparagraph designation.
E) None of the above.

Question 54

Which of the following sources has the highest tax validity?

A) Revenue Ruling.
B) Revenue Procedure.
C) Regulations.
D) Internal Revenue Code section.
E) None of the above.

Question 55

What administrative release deals with a proposed transaction rather than a completed transaction?

A) Letter Ruling.
B) Technical Advice Memorandum.
C) Determination Letter.
D) Field Service Advice.
E) None of the above.

Question 56

The primary purpose of effective tax planning is to reduce or defer the tax in the current tax year.

Question 57

A Bluebook opinion is substantial authority for purposes of the accuracy related penalty.

Question 58

What statement is not true with respect to Temporary Regulations?

A) May not be cited as precedent.
B) Issued as Proposed Regulations.
C) Automatically expire within three years after the date of issuance.
D) Found in the Federal Register.
E) All of the above statements are true.

Question 59

Which of the following types of Regulations has the highest tax validity?

A) Temporary.
B) Legislative.
C) Interpretive.
D) Procedural.
E) None of the above.

Question 60

Which item may not be cited as a precedent?

A) Regulations.
B) Temporary Regulations.
C) Technical Advice Memoranda.
D) U.S. District Court decision.
E) None of the above.

Question 61

When searching on an online tax service, which approach is more frequently used?

A) Code section approach.
B) Keyword approach.
C) Table of contents approach.
D) Index.
E) All are about the same.

Question 62

Which is not a primary source of tax law?

A) Notice 89-99, 1989-2 C.B. 422.
B) Estate of Harry Holmes v. Comm., 326 U.S. 480 (1946).
C) Rev. Rul. 79-353, 1979-2 C.B. 325.
D) Prop. Reg. § 1.752­4T(f).
E) All of the above are primary sources.

Question 63

The IRS will not acquiesce to the following tax decisions:

A) U.S. District Court.
B) U.S. Tax Court.
C) U.S. Court of Federal Claims.
D) Small Case Division of the U.S. Tax Court.
E) All of the above.

Question 64

Tax research involves which of the following procedures:

A) Identifying and refining the problem.
B) Locating the appropriate tax law sources.
C) Assessing the validity of the tax law sources.
D) Follow-up.
E) All of the above.

Question 65

A taxpayer may not appeal a case from which court:

A) U.S. District Court.
B) U.S. Circuit Court of Appeals.
C) U.S. Court of Federal Claims.
D) Small Case Division of the U.S. Tax Court.
E) None of the above.

Question 66

If a taxpayer decides not to pay a tax deficiency, he or she must go to which court?

A) Appropriate U.S. Circuit Court of Appeals.
B) U.S. District Court.
C) U.S. Tax Court.
D) U.S. Court of Federal Claims.
E) None of the above.

Question 67

Which court decision carries more weight?

A) Federal District Court.
B) Second Circuit Court of Appeals.
C) U.S. Tax Court decision.
D) Small Cases Division of U.S. Tax Court.
E) U.S. Court of Federal Claims.

Question 68

Which tax-related website probably gives the best policy-orientation results?

A) taxalmanac.org.
B) irs.gov.
C) taxsites.com.
D) taxanalysts.com.
E) ustaxcourt.gov.

Question 69

Which court decision would probably carry more weight?

A) Regular U.S. Tax Court decision.
B) Reviewed U.S. Tax Court decision.
C) U.S. District Court decision.
D) Tax Court Memorandum decision.
E) U.S. Court of Federal Claims.

Question 70

Which is presently not a major tax service?

A) Standard Federal Tax Reporter.
B) Federal Taxes.
C) United States Tax Reporter.
D) Tax Management Portfolios.
E) All of the above are major tax services.

Question 71

Which Regulations have the force and effect of law?

A) Procedural Regulations.
B) Finalized Regulations.
C) Legislative Regulations.
D) Interpretive Regulations.
E) All of the above.

Question 72

How can Congressional Committee Reports be used by a tax researcher?

Question 73

Which company does not publish citators for tax purposes?

A) John Wiley & Sons.
B) Commerce Clearing House.
C) Research Institute of America.
D) Westlaw.
E) Shepard's.

Question 74

A jury trial is available in the following trial court:

A) U.S. Tax Court.
B) U.S. Court of Federal Claims.
C) U.S. District Court.
D) U.S. Circuit Court of Appeals.
E) None of the above.

Question 75

Which publisher offers the Standard Federal Tax Reporter?

A) Research Institute of America.
B) Commerce Clearing House.
C) Prentice-Hall.
D) LexisNexis.
E) None of the above.

Question 76

Which publisher offers the United States Tax Reporter?

A) Research Institute of America.
B) Commerce Clearing House.
C) LexisNexis.
D) Tax Analysts.
E) None of the above.

Question 77

A researcher can find tax information on home page sites of:

A) Governmental bodies.
B) Tax academics.
C) Publishers.
D) CPA firms.
E) All of the above.

Question 78

A taxpayer who loses in a U.S. District Court may appeal directly to the:

A) U.S. Supreme Court.
B) U.S. Tax Court.
C) U.S. Court of Federal Claims.
D) U.S. Circuit Court of Appeals.
E) All of the above.

Question 79

Which statement is incorrect with respect to taxation on the CPA exam?

A) The CPA exam now has only four parts.
B) There are no longer case studies on the exam.
C) A candidate may not go back after exiting a testlet.
D) Simulations include a four-function pop-up calculator.
E) None of the above are incorrect.

Question 80

Which items tell taxpayers the IRS's reaction to certain court decisions?

A) Notices.
B) Revenue Procedures.
C) Revenue Rulings.
D) Actions on Decisions.
E) Legislative Regulations.