Deck 2: Tax Research Methodology

Question 1

A reference source that enables the researcher tofollow the judicial history of court cases is known as:

A)a case reporter
B)a judicial directory
C)the Cumulative Bulletin
D)a citator

Answer 1

D

Question 2

In a closed-fact problem, the main goal of tax research is to:

A)determine several alternative courses of future action for the taxpayer
B)find support for an action the taxpayer has already taken
C)determine several alternative courses of future action for the taxpayer and find support for an action the taxpayer has already taken
D)none of these are correct

Answer 2

B

Question 3

All of the following are goals of tax research EXCEPT:

A)tobalance the need for efficiency against the need for thoroughness
B)tobalance the client's tax goals with the client's nontax, personal considerations
C)tofind a defensible solution toa client's problem
D)tofind a perfect solution toa client's problem, nomatter how long it takes

Answer 3

D

Question 4

The final step of the tax research process is to:

A)develop conclusions and recommendations
B)communicate recommendations
C)document conclusions and recommendations
D)litigate the tax-related dispute

Question 5

Collateral estoppel is a legal concept which:

A)allows relitigation on the same facts or same issues
B)bars relitigation on the same facts or same issues
C)requires that the court resolve factual issues in a taxpayer's favor
D)none of these are correct

Question 6

Which of the following statements is INCORRECT regarding the CPA exam?

A)The National Association of State Boards of Accountancy administers the test.
B)Each state has its own test.
C)CPA exam candidates must pass all four sections of the exam.
D)The Regulation section requires tax research.

Question 7

Which of the following statements describes the tax research process?

A)It is strictly linear.
B)It requires mechanical skills combined with critical thinking.
C)It requires the ability touse complex mathematical techniques toidentify and locate tax authorities.
D)All of these are correct.

Question 8

The IRS website can be used toperform which of the following tasks:

A)obtain downloadable forms
B)keyword search IRS tax publications
C)file your tax return
D)all of these are correct

Question 9

Which of the following represents a law issue?

A)intent of the transaction
B)definition of a term used in the code
C)date of transaction
D)location of the transaction
E)all of these are correct

Question 10

Secondary sources are useful when:

A)conflicting primary authority exists
B)the issue is a closed-fact problem
C)a researcher does not have access toprimary sources
D)a researcher disagrees with the client

Question 11

Which of the following is an example of secondary authority?

A)tax treaties
B)tax journals
C)U.S. Constitution
D)tax laws by Congress

Question 12

The first step in the tax research process is to:

A)establish the facts
B)identify the issues
C)locate authority
D)evaluate authority

Question 13

Which of the following statements is CORRECT regarding online tax research?

A)The method of constructing queries is the same for all databases.
B)Most online tax services allow the use of connectors and wild cards.
C)If a query generates toolittle information, the researcher should add more unique keywords.
D)All of these are correct.

Question 14

Once the research question has been stated, the researcher must next:

A)gather the facts
B)identify the keywords
C)select a database and execute the search
D)interpret and refine the search

Question 15

Once the initial facts have been gathered and the issues defined, the tax researcher must:

A)develop conclusions and recommendations
B)evaluate the authority
C)contact the IRS
D)locate the authority

Question 16

Which of the following are basic connectors you can use toconstruct a search query?

A)google
B)not
C)or
D)*
E)both not and or

Question 17

A statutory source of federal tax law is:

A)various rulings of the Treasury Department and the IRS
B)collected rulings of the various courts on federal tax matters
C)textbooks
D)tax treaties

Question 18

Tax research issues can be divided intotwomain categories. These are:

A)fact and law issues
B)primary and secondary issues
C)major and minor issues
D)internal and external issues
E)tax and nontax issues

Question 19

The amount of a transaction represents a:

A)law issue
B)social issue
C)fact issue
D)political issue

Question 20

Which of the following is an administrative source of primary authority?

A)U.S. Constitution
B)collected rulings of the various courts on federal tax matters
C)revenue rulings
D)newsletters

Question 21

List in sequential order the major steps involved in the tax research process.

Question 22

Tax researchers should not consider the client's potential liability in determining how much time tospend on a client's problem.

Question 23

After the researcher has located authority that deals with the client's problem, he or she must develop conclusions and recommendations.

Question 24

Tax journals perform which of the following functions?

A)offer researchers expert analysis of unclear tax issues
B)keep researchers aware of current developments
C)suggest tax planning techniques
D)all of these are correct

Question 25

Which of the following forms the basis for all tax provisions?

A)secondary authority
B)the administrative authority of the IRS
C)judicial interpretation of the law
D)the statutory authority of Congress

Question 26

The tax research process should be approached in a structured, step-by-step manner.

Question 27

A tax researcher should ignore the personal preferences of a client and concentrate only on minimizing the client's tax liability.

Question 28

Commercial databases are ideal sources for having the most up-to-date information on tax laws and scenarios.

Question 29

A tax researcher can rely on tax journals as substantial authority under Section 6662 of the Code.

Question 30

"Wildcards" such as an asterisk can be used tosearch for word variations in most tax services.

Question 31

If a computer search generates toomuch information, the search may use fewer libraries or more unique keywords.

Question 32

The distinction between primary and secondary authority is important for which of the following reasons?

A)tomeet the accuracy threshold of "substantial authority"
B)toavoid penalties under Section 6662 of the Code
C)tosearch properly with connectors and wildcards
D)tomeet the accuracy threshold of "substantial authority" and toavoid penalties under Section 6662 of the Code

Question 33

Explain the difference in primary and secondary sources of tax information and give several examples of each.

Question 34

Google Scholar is an example of an online, free tax-related internet site.

Question 35

List the significant tax facts that often influence the client's situation:

Question 36

The IRS website is a full-service, tax research resource.

Question 37

The U.S. Constitution is a statutory source of tax law.

Question 38

All primary source material has the same precedential value.

Question 39

The search "stock or securities" would find documents that contain both the term "stock" and the term "securities."

Question 40

Skilled tax research requires a combination of reasoning and creativity.

Question 41

Tax research has been described as an "iterative process." Explain what this means tothe researcher and give an example of how this process might work with a hypothetical client.