Deck 3: Constitutional and Legislative Sources

Question 1

Which of the following issues is NOT addressed by tax treaties?

A)what tax disclosures must be made by a visitor to a host country
B)treatment of business and investment income earned by a foreign visitor in the United States
C)treatment of business and investment income earned by a foreign citizen in his home country
D)how to compute the taxable amount in the host country
E)all of these are correct

Answer 1

C

Question 2

Which of the following statements is CORRECT regarding the enactment into law of a tax bill?

A)A tax bill must always be signed by the President to become law.
B)A tax law must be approved by the Treasury Department.
C)A tax law must either be signed into law by the President or Congress must override a presidential veto of the proposed law.
D)None of these are correct.

Answer 2

C

Question 3

Which of the following statements is INCORRECT regarding the structure of the Internal Revenue Code?

A)Code section numbers start over in each chapter.
B)Each Code section is used only once in the Internal Revenue Code.
C)Code sections inserted between existing section numbers are indicated by adding a capital letter to the Section number (e.g., Section 25A)
D)The Internal Revenue Code is Title 26 of the United States Code.

Answer 3

A

Question 4

A "tax protester" is:

A)a person who files a "frivolous" return with the IRS
B)a person who brings a "frivolous" matter before the Tax Court
C)a person who may be subject to a penalty for frivolous Tax Court petitions
D)all of these are correct
E)none of these are correct​

Question 5

Which of the following sections of the Internal Revenue Code deal with partnerships?

A)the 700s
B)the 300s
C)Section 162
D)Section 501

Question 6

Subtitle A of the Internal Revenue Code deals with:

A)estate and gift taxes
B)employment taxes
C)income taxes
D)excise taxes

Question 7

In the House of Representatives, tax law changes are primarily considered by:

A)the Finance Committee
B)a Conference Committee
C)the Budget Committee
D)the Ways and Means Committee

Question 8

The first Internal Revenue Code was:

A)the Internal Revenue Code of 1939
B)the Internal Revenue Code of 1954
C)the Revenue Act of 1913
D)none of these are correct

Question 9

Which of the following is an administrative source of the federal tax law issued by the IRS?

A)court rulings
B)Internal Revenue Code
C)tax treaties
D)revenue rulings
E)none of these are correct

Question 10

Which of the following is CORRECT regarding the Floor Debate Report?

A)It is contained in the Congressional Record.
B)Technical or detailed information excluded from the committee report(s) may be included.
C)It summarizes the discussions made in the House or the Senate concerning a proposed tax bill.
D)All of these are correct.

Question 11

A subtitle of the Internal Revenue Code:

A)is indicated by a capital letter, such as "Subtitle A"
B)relates to a well-defined area of the law
C)is used as a short-hand reference to describe types of corporations
D)is indicated by a capital letter, such as "Subtitle A," and relates to a well-defined area of the law
E)all of the above

Question 12

Each Congress lasts for:

A)2 years
B)1 year
C)3 years
D)4 years

Question 13

The current Internal Revenue Code is the:

A)Internal Revenue Code of 2011
B)Internal Revenue Code of 1986
C)Internal Revenue Code of 1954
D)none of these are correct

Question 14

The first federal income tax law was passed as a result of the:

A)Civil War
B)Mexican-American War
C)Spanish-American War
D)none of these are correct

Question 15

If any differences exist between the House- and Senate-passed versions of a tax bill, the bill is referred to:

A)the Finance Committee
B)the President
C)a Conference Committee
D)the Supreme Court

Question 16

P.L. 107-16 is the citation for:

A)the Conference report on the 16th public law enacted in the 107th Congress
B)the 16th public law enacted in the 107th Congress
C)a public law enacted by Congress but not signed by the President
D)none of these are correct

Question 17

Which of the following statements is CORRECT regarding Committee Reports?

A)They are published in the Internal Revenue Bulletin.
B)They can be found in most subscription online tax services.
C)They explain the elements of proposed tax law changes and reasons for the changes.
D)All of these are correct.
E)None of these are correct.

Question 18

The overriding purpose of tax treaties is to:

A)create "tax havens"
B)minimize tax liability of multinational corporations
C)require business taxpayers to file returns in all countries in which they operate
D)eliminate the "double taxation" that a taxpayer would face if his or her income were subject to tax in both countries

Question 19

Which of the following statements is INCORRECT regarding tax treaties?

A)They are authorized by the U.S. Constitution.
B)They are usually initiated by the State Department, not the Treasury.
C)The United States can have multiple types of tax treaties with one country.
D)All of these are correct.

Question 20

Regarding the taxing powers of the federal government, the U.S. Constitution requires that:

A)taxes imposed by Congress must apply uniformly throughout the United States
B)no direct taxes may be imposed on income
C)all revenues from the federal income tax must be apportioned to the population of the states from which they were collected
D)all of these are correct

Question 21

A "technical corrections act" is:

A)a set of changes made by IRS to fit new tax law provisions into the Code
B)an act passed by Congress to remove errors in implementing and interpreting the new provisions of a tax law
C)the act that provides the effective dates for a new tax law
D)none of these are correct

Question 22

Statutory sources of federal tax law come out of the legislative branch of the U.S. government.

Question 23

Historically, the 1913 income tax was a tax on wealthy and high-income taxpayers.

Question 24

Tax treaties are agreements negotiated between countries concerning the treatment of entities subject to tax in both countries.

Question 25

In Pollock v. Farmers' Loan and Trust Co., the Supreme Court held that the income tax was unconstitutional because it was a constitutionally prohibited "direct tax."

Question 26

Subparagraphs are the major divisions of the Internal Revenue Code covering such broad topics as Income Taxes, and Estate and Gift Taxes.

Question 27

Congress cannot override a Presidential veto of a tax bill.

Question 28

Which of the following statements is INCORRECT regarding the reasons tax researchers may have difficulty in interpreting the Internal Revenue Code?

A)Code sections can appear to conflict.
B)Definitions can be significantly different from the common use of a term.
C)All exceptions to a Code section are addressed within that same section.
D)Frequently, phrases modify percentage or dollar amounts.

Question 29

The Joint Conference Committee is called on to resolve differences between the House Ways and Means Committee version and the full House version of tax legislation.

Question 30

Most tax legislation begins in the House of Representatives.

Question 31

Which of the following statements is CORRECT regarding the definition of terms in the Internal Revenue Code?

A)All definitions are included in Section 7701.
B)Definitions are always included within the Code section to which they apply.
C)Definitions are written into the Code by the IRS rather than included in tax laws passed by Congress.
D)Sometimes, a researcher may need to consult the regulations to find a complete definition of a term.

Question 32

Which of the following statements is INCORRECT regarding effective dates in the Internal Revenue Code?

A)All sections of a new tax law go into effect at the same time.
B)New Code provisions may not go into effect immediately upon adoption by Congress.
C)Some effective dates can precede passage of the act.
D)All of these are correct.

Question 33

Section 121(B)(2)(a)(b)(iii) would be a correct type of Code citation.

Question 34

Circuit Courts are administrative sources of the federal tax law.

Question 35

​When a Code provision and a provision under a treaty conflict, the one adopted earlier in time generally rules.

Question 36

Taxpayers who file frivolous returns are subject to a $25,000 fine.

Question 37

Treaties may expire because of a specific Congressional time limitation.

Question 38

The 16th Amendment to the U.S. Constitution authorized the imposition of a Federal income tax.

Question 39

Code Section 61 relates to:

A)deductions for adjusted gross income
B)the definition of gross income
C)corporate tax rates
D)the deduction for state taxes

Question 40

The North American Free Trade Agreement (NAFTA) is a non-tax international treaty that addresses some tax-related issues.

Question 41

A report of Floor Debate is included in the Congressional Record and may include some detailed or technical information that is excluded from a Committee Report.

Question 42

Whenever a major new tax law is passed, CCH and RIA both publish the related Committee Reports.

Question 43

Trade or business deductions are contained in Code Section 62.

Question 44

The term "not less than 50" represents only those numbers which are more than 50.

Question 45

List several issues that tax treaties commonly address.

Question 46

What is a tax protester and what types of sanctions are tax protesters subject to?

Question 47

What information is included in the history of a Code section?

Question 48

Describe the steps in the legislative process by which a tax bill becomes law.

Question 49

The "General Explanation" of tax legislation, called the "Blue Book," is prepared by the Joint Conference Committee.