Deck 2: Tax Research, Practice and Procedure

Question 1

Private letter rulings by the Internal Revenue Service are only made available by an official court order.

Answer 1

False
Under the Freedom of Information Act and under the Tax Reform Act of 1976, the IRS is required to make public all private rulings and other written determinations issued to taxpayers concerning the tax treatment of specific transactions. However, names, addresses of taxpayers, etc
will be deleted

Question 2

The Citator Service outlines the history of a court case, from inception, through appeals and tells which later cases or rulings have cited it.

Answer 2

True
A citator does not look at any events preceding a case

Question 3

Tax Court decisions that involve issues not previously decided by the Court are released as Memorandum decisions.

Answer 3

False
Issues not previously decided by the Court are issued as Regular Tax Court decisions, whereas decisions that rest on federal determinations or on previously decided legal issues are known as Memorandum decisions.

Question 4

Information Releases (IRs) usually are not published in the Internal Revenue Bulletin, but are distributed via a practitioners' mailing list.

Question 5

Current tax law dates back only to post-1986 Internal Revenue Code developments.

Question 6

Since regulations, revenue rulings, and acquiesced Tax Court decisions all lack judicial authority, an IRS agent would more easily be persuaded by reference to District Court and Circuit Court decisions.

Question 7

"Closed Fact" tax research relates to the various procedures involved in "before-the-facts planning" situations.

Question 8

Title 26 of the United States Code contains the statutes that authorize the Treasury Department, specifically, the Internal Revenue Service, to collect taxes for the federal government.

Question 9

In a Court of Appeals dispute between the 5th and 8th Circuits, the U.S. Tax Court operating within the 5th Circuit will usually refer the case to the U.S. Supreme Court.

Question 10

The Mertens tax service is a tax service that is sometimes cited by the courts.

Question 11

Tax "evasion" and "avoidance" are almost identical concepts, both relating to the willful failure to comply with tax laws.

Question 12

The Internal Revenue Code of 1986 is arranged as follows: Chapter, Subtitle, Subchapter, Part, Section, Subpart, Subsection.

Question 13

A thorough legislative history and background of a Section of the Internal Revenue Code is generally found in the CCH and RIA tax services.

Question 14

Committee reports of the House Ways and Means Committee, the Senate Finance Committee, and the conference committees are published by the Government Printing Office and are also reprinted in the Internal Revenue Bulletin and Cumulative Bulletin.

Question 15

The IRS must follow the precedents set by decisions of the U.S. Court of Federal Claims.

Question 16

Section numbers run consecutively through the entire Code, but with occasional breaks in their sequence.

Question 17

The IRS might issue an Acquiescence or a Nonacquiescence to a Regular Tax Court decision, but not to a Memorandum decision.

Question 18

The CCH "Citator," outlines current amendments to the Code.

Question 19

All Revenue Rulings are published in the Internal Revenue Bulletin, and eventually in the Cumulative Bulletin.

Question 20

If the IRS revokes or modifies a published ruling, open tax years can be retroactively affected for all taxpayers.

Question 21

The Tax Court hears cases only if the tax has been assessed or paid.

Question 22

Taxpayers may request a determination letter from the National Office of the IRS.

Question 23

A jury trial is allowed in the Tax Court.

Question 24

The U.S. Tax Court is an independent judicial body that has no connection with the Internal Revenue Service.

Question 25

The Tax Court is less likely to be lenient in its enforcement of the rules of evidence than the District Court or the Court of Federal Claims.

Question 26

A notice of deficiency received by a taxpayer from the Internal Revenue Service means that a proposed tax liability has been automatically assessed and the taxpayer can no longer take his or her case to the Tax Court.

Question 27

An unenrolled individual may represent his or her regular full-time employer before the Internal Revenue Service.

Question 28

Doris Duncan received a statutory notice of deficiency at her residence in Ohio. If she wishes to appeal the deficiency to the Tax Court, she may file a petition at any time within 120 days of the issuance of the notice.

Question 29

A practitioner who is an income tax return preparer and who files a power of attorney with the Internal Revenue Service may receive and endorse a taxpayer's refund check.

Question 30

An accountant discovers an error on a client's returns. The accountant must advise the client and the Internal Revenue Service of the error.

Question 31

An individual who is a regular full-time employee of a partnership may represent the partnership before the Internal Revenue Service.

Question 32

The taxpayer or the Government may appeal decisions of a District Court to the Court of Appeals.

Question 33

Determination letters regarding the written qualifications of an individually designed retirement plan are issued by the Internal Revenue Service's National Office in Washington.

Question 34

The U.S. Supreme Court is not obligated to hear all tax cases that are appealed to it.

Question 35

Arnold Ames, a partner in an accounting firm, discovers that one of his clients omitted a substantial amount of gross income. Arnold should immediately notify his partners and the IRS.

Question 36

Payment of tax is not necessary to litigate in the District Court.

Question 37

An examination of Farley Field's 2012 income tax return resulted in an unagreed deficiency of $20,000, and he has requested that his case be heard by the Tax Court under the Small Tax Case procedures. If his case is handled using these procedures, he cannot appeal the decision.

Question 38

Decisions of the Court of Federal Claims are appealed to the U.S. Supreme Court.

Question 39

The Commissioner of Internal Revenue may appeal an adverse decision of the Tax Court.

Question 40

A claim for refund (Form 1040X, Amended U.S. Individual Income Tax Return) must be filed within three years from the date the return was due or filed, or within two years from the date the tax was paid, whichever is later.

Question 41

A claim for refund must be filed within three years from the date the return was filed or within three years from the date the tax was paid, whichever date is later.

Question 42

Barry Broom's tax return was examined by a tax auditor who determined additional tax due of $2,400. Barry does not agree with the proposed change and requests a conference with the Appeals Office. Barry is required to submit a written protest with his request to the Appeals Office.

Question 43

A return preparer who fails to sign a tax return is subject to civil penalties as contained in the Internal Revenue Code.

Question 44

Revenue legislation begins in the Senate.

Question 45

Regulations often define terms, clarify language used in the Code, and explain how the President believes the tax laws should be interpreted.

Question 46

The Tax Code provides criminal penalties for tax professionals that include prison time.

Question 47

Both the taxpayer and the government may appeal decisions of the U.S. Tax Court or U.S. District Court to the
U.S. Court of Appeals.

Question 48

The internal revenue laws were revised by the Tax Reform Act of 1986 and renamed the Internal Revenue Code of 1986.

Question 49

The purpose of revenue rulings is to promote uniform application of the tax law to an entire set of facts. Therefore, IRS employees must follow the rulings, while taxpayers may appeal adverse return examination decisions based on these rulings.

Question 50

Upon examination of a tax return, the IRS has the authority to impose additional taxes and penalties.

Question 51

If the taxpayer disagrees with an examiner's findings, the taxpayer must first make an appeal to the IRS before going to the courts.

Question 52

The American Institute of Certified Public Accountants (AICPA) has adopted Statements on Standards for Tax Service that are enforceable against all tax practitioners.

Question 53

Research products prepared by publishing companies can be relied on as primary tax authorities.

Question 54

The United States Tax Court is a court of national jurisdiction.

Question 55

Practice before the IRS is available only for "enrolled agents."

Question 56

Secondary sources of authority such as tax services, citators, and legal periodicals are references that explain and comment on primary sources of authority.

Question 57

The Internal Revenue Code and IRS revenue rulings are types of primary sources of tax authority.

Question 58

Regulations may be legislative, interpretative, and procedural, and are afforded different weight by the courts.

Question 59

Decisions of the U.S. Courts of Appeals and some decisions of other federal courts may be reviewed by the United States Supreme Court. The Supreme Court is obligated to hear all federal tax cases that it has been requested to review.

Question 60

Revenue rulings are issued on the basis of Code sections and may be subsequently changed (modified) or revoked to reflect subsequent law or regulation changes and court decisions.

Question 61

Which of the following sources of tax law are cross-referenced to related Internal Revenue Code sections through the use of a similar numbering system?

A) Revenue Rulings
B) Tax Court cases
C) Treasury Regulations
D) Determination Letters

Question 62

Which of the following is published in the Cumulative Bulletin?

A) Treasury Regulations
B) Revenue Rulings
C) Internal Revenue Code amendments
D) Tax Court cases

Question 63

Which of the following statements is true?

A) Technical Information Releases and Announcements are published in the Internal Revenue Bulletin, and are typically included in the Cumulative Bulletin.
B) The IRS issues "Determination Letters" and publishes summaries of these letters in the Internal Revenue Bulletin; they are rarely reprinted in the Cumulative Bulletin.
C) The editorial opinion included in the leading looseleaf tax services is an excellent substitute for authoritative sources of law since it is more direct and easier to understand.
D) LEXIS/NEXIS is one of the leading computerized legal data bank services which affords the researcher-user access to the full texts of primary source materials.

Question 64

The "Compilations" which comprise the major portion of Volumes 1 through 18 of the CCH Standard Tax Service:

A) Are not arranged in Code section order
B) Do not include related Treasury Regulations
C) Do not contain any CCH editorial opinion
D) Do not contain the full text of Revenue Rulings

Question 65

The major portion of the CCH Standard Federal Tax Reports, in Volumes 1 through 18, consists of the various "Compilations." The purpose of the compilations is:

A) To offer tax planning ideas related to each income tax topic, and to direct the user to appropriate research articles in selected periodicals.
B) To provide the reader with in-depth discussions of general concepts of law without reflecting details of the various Code sections or regulations.
C) To outline related current developments, cross-referenced to each Code section, and to provide in-depth coverage of the legislative history of each Code section.
D) To reflect the text of each Code section, followed by Regulations, Committee Reports, Explanations, and editorial opinion.

Question 66

Which of the following arrangements of an Internal Revenue Code citation is customary?

A) Section 21(A) II(1)(a)iii
B) Section 81(A)(iv), 2(b)c
C) Section 243(a)(3)(C)(ii)
D) Section 482(B)(4)(d)-i
E) Section 501(IV)(a)5(B)(iii)

Question 67

When dealing with the Tax Court, which of the following pronouncements has the highest authority?

A) Revenue Procedures
B) Treasury Regulations
C) Revenue Rulings
D) Technical Information Releases

Question 68

Which of the following statements regarding Treasury Regulations is false?

A) In dealing with the IRS, Treasury Regulations have the authority of law.
B) Courts are bound to follow Treasury Regulations when they are in conflict with the law.
C) The legal citation for a Treasury Regulation refers to the associated Internal Revenue Code section.
D) Regulations are published in the Federal Register.

Question 69

Upon completion of an audit, which procedural form does the IRS agent give to the taxpayer?

A) Form 870, Waiver of Restrictions
B) 30-day letter
C) 90-day letter
D) Revenue Agent's Report

Question 70

In order for a case to be handled in the U.S. Tax Court under the "small tax case procedures," the amount involved must be $25,000 or less for any one tax year.

Question 71

Determine the correct CCH citation for the following-U.S. District Court of Florida, 1969, Volume 2, P9354, CCH U.S. Tax Cases.

A) USTC 69-2, U.S. Dist. Fla., P9354
B) 69-2 USTC P9354 (DC Fla. 1969)
C) 69-2 USTC, Fla., P9354
D) USDC-FLA (1969), USTC 69-2, P9354, CCH

Question 72

Which of the following types of tax matters are typically handled by a Correspondence Examination?

A) Audits involving complex corporate reorganizations
B) Simple matters that can usually be resolved by mail
C) Tax shelter examinations
D) TCMP audits

Question 73

Which of the following are not published either by the government or by any of the private publishing services?

A) Private Letter Rulings
B) Tax Court Memorandum Decisions
C) Revenue Procedures
D) Determination Letters

Question 74

Determine the correct explanation for the following CCH citation-72- 1 USTC P9725 (CA-2 1972).

A) CCH, U.S. Tax Court, P9725, 2nd District of California, 1972, page 1.
B) CCH, U.S. Tax Cases, U.S. Court of Appeals, Second Circuit, 1972, Vol. 1, P9725.
C) CCH, U.S. Tax Cases, 2nd Circuit of California, 1972, Vol. 1, P9725.
D) CCH, U.S. Tax Court, U.S. Second Court of Appeals, 1972, California, Vol. 2, P9725.

Question 75

When an individual taxpayer wishes to file a claim for refund of federal income tax, he or she should file an appeal with the appropriate IRS Appeals Office.

Question 76

Which level of the IRS handles the majority of tax audits?

A) The National Office
B) The Chief Counsel
C) The Regional Service Centers
D) The District Offices

Question 77

The term "Practice before the IRS" refers to:

A) Tax planning for nonprofit organizations
B) Macro-economic tax projections
C) Representing a client before the IRS
D) Tax planning for timber and forest investments

Question 78

The term "tax doctrine" refers to a:

A) Legal concept that is found in Treasury Regulations
B) Statutory provision of the tax law
C) Judicial interpretation with strong precedential value
D) Tax treaty with a foreign country

Question 79

The authority of the U.S. government to raise revenue through a federal income tax is derived from:

A) The Internal Revenue Service
B) Eisner v. Macomber (a Supreme Court case)
C) The 16th Amendment to the Constitution
D) The House Ways and Means Committee

Question 80

Which of the following options is not available to a taxpayer after receipt of a 30-day letter from the IRS?

A) Sign the Form 879 and await assessment of the deficiency.
B) File a protest and obtain a conference at the Appellate Division of the IRS.
C) Either request or await a 90-day letter.
D) Request a rehearing by a new IRS agent.