Deck 2: Working with the Tax Law

Question 1

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

Answer 1

True

Question 2

Post-1984 letter rulings may be substantial authority for purposes of the accuracy-related penalty in § 6662.

Answer 2

True

Question 3

Determination letters usually involve completed transactions.

Answer 3

True

Question 4

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

Question 5

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

Question 6

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.

Question 7

This Internal Revenue Code section citation is incorrect: § 212(1).

Question 8

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

Question 9

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

Question 10

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

Question 11

The first codification of the tax law occurred in 1954.

Question 12

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

Question 13

Temporary Regulations are only published in the Internal Revenue Bulletin.

Question 14

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

Question 15

A taxpayer should always minimize his or her tax liability.

Question 16

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

Question 17

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

Question 18

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

Question 19

Technical Advice Memoranda deal with completed transactions.

Question 20

In general, Regulations are issued immediately after a statute is enacted.

Question 21

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

Question 22

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

Question 23

There is a direct conflict between an Internal Revenue Code section adopted in 2010 and a treaty with France (signed in 2016). The Internal Revenue Code section controls.

Question 24

The Index to Federal Tax Articles (published by Thomson Reuters) is available electronically.

Question 25

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

Question 26

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

Question 27

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

Question 28

The research process should always begin with a tax service.

Question 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

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 35

Electronic (online) databases are most frequently searched by the keyword approach.

Question 36

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

Question 37

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

Question 38

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

Question 39

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 40

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

Question 41

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

Question 42

Before a tax bill can become law, it must be approved (signed) by the President of the United States.

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 these

Question 44

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 these are correct cites.

Question 45

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

Question 46

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

Question 47

Normally, when the Senate version of a tax bill differs from that passed by the House, a Joint Conference Committee drafts a compromise tax bill.

Question 48

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

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

Question 49

The Tax Cuts and Jobs Act of 2017 became part of the Internal Revenue Code of 1986.

Question 50

The Internal Revenue Code was first codified in what year?

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

Question 51

Currently, the Internal Revenue Code of 1986 does not contain §§ 308, 309, and 310. This absence means these sections were repealed by Congress.

Question 52

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 these

Question 53

Federal tax legislation generally originates in which of the following?

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

Question 54

The Regulation section of the CPA exam is approximately 80% Taxation and 20% Law & Professional Responsibilities.

Question 55

Revenue Rulings are first published in the Internal Revenue Bulletin.

Question 56

Subchapter C refers to the subchapter in the Internal Revenue Code that deals with partnerships and partners.

Question 57

Revenue tax measures typically originate in the Senate Finance Committee of the U.S. Congress.

Question 58

A Temporary Regulation under § 303 of the Code would be cited as follows: Temp. Reg. § 303.

Question 59

Tax planning usually involves a completed transaction.

Question 60

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

Question 61

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 these

Question 62

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 these.

Question 63

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 these.

Question 64

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 these

Question 65

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 these

Question 66

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

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

Question 67

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 these are administrative sources.

Question 68

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 these.

Question 69

What statement is not true with respect to Temporary Regulations?

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

Question 70

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 these.

Question 71

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 these.

Question 72

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 these statements are true.

Question 73

Which publisher offers the United States Tax Reporter?

A) Research Institute of America (Thomson Reuters)
B) Commerce Clearing House
C) LexisNexis
D) Tax Analysts
E) None of these

Question 74

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

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

Question 75

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 these.

Question 76

Which publisher offers the Standard Federal Tax Reporter?

A) Research Institute of America
B) Commerce Clearing House
C) Thomson Reuters
D) LexisNexis
E) None of these

Question 77

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 these

Question 78

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

A) Temporary
B) Legislative
C) Interpretive
D) Procedural
E) None of these

Question 79

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 these

Question 80

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 these are major tax services