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

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

Answer 2

False

Question 3

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

Answer 3

True

Question 4

Temporary Regulations are only published in the Internal Revenue Bulletin.

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

A taxpayer should always minimize his or her tax liability.

Question 10

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

Question 11

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

Question 12

Technical Advice Memoranda deal with completed transactions.

Question 13

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

Question 14

The first codification of the tax law occurred in 1954.

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

Determination letters usually involve completed transactions.

Question 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

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

Question 28

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

Question 29

The research process should always begin with a tax service.

Question 30

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

Question 31

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

Question 32

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 33

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

Question 34

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 35

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

Question 36

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

Question 37

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

Question 38

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

Question 39

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

Question 40

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

Question 41

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 42

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 43

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 44

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 45

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 46

The Internal Revenue Code was first codified in what year?

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

Question 47

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

Question 48

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

Question 49

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 50

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 51

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 52

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 53

Tax planning usually involves a completed transaction.

Question 54

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

Question 55

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 56

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 57

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 58

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 59

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 60

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

Question 61

What are Treasury Department Regulations?

Question 62

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

Question 63

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 64

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 task-based simulations 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 these are incorrect.

Question 65

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 66

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 67

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 68

Which of the following court decisions 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 69

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 70

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. § 1.752-4T(f).
E)All of these are primary sources.

Question 71

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 72

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 73

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 74

Which company does not publish citators for tax purposes?

A)John Wiley & Sons
B)Commerce Clearing House
C)Thomson Reuters RIA
D)Westlaw
E)Shepard's

Question 75

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 76

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 77

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 78

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 79

Which Regulations have the force and effect of law?

A)Procedural Regulations
B)Finalized Regulations
C)Legislative Regulations
D)Interpretive Regulations
E)All of these

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