Deck 2: Tax Research Methodology

Question 1

The first step in the tax research process is to:

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

Answer 1

A

Question 2

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

Answer 2

D

Question 3

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

Answer 3

C

Question 4

Tax research issues can be divided into two main 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 5

All of the following are goals of tax research EXCEPT:

A)to balance the need for efficiency against the need for thoroughness
B)to balance the client's tax goals with the client's nontax, personal considerations
C)to find a defensible solution to a client's problem
D)to find a perfect solution to a client's problem, no matter how long it takes

Question 6

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 7

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 8

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 9

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 too little information, the researcher should add more unique keywords.
D)All of these are correct.

Question 10

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

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

Question 11

CCH's annotated or code-based commercial tax service is:

A)the United States Tax Reporter
B)the Tax Coordinator 2d
C)the Thomson Reuters Checkpoint
D)the Federal Tax Library

Question 12

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

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

Question 13

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 14

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 to use complex mathematical techniques to identify and locate tax authorities.
D)All of these are correct.

Question 15

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 16

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

Question 17

The Tax Management Portfolios are published by:

A)CCH
B)RIA
C)Bloomberg BNA Tax and Accounting
D)LexisNexis

Question 18

The amount of a transaction represents a:

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

Question 19

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 to primary sources
D)a researcher disagrees with the client

Question 20

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 21

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

Question 22

Thomson Reuters Checkpoint is a web-based tax research service that contains research material on federal, state, local, and international taxation.

Question 23

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

Question 24

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

Question 25

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

Question 26

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 27

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 28

FindLaw includes links for federal and state laws and a searchable database of summaries of published opinions from selected federal and state courts back to 2000.

Question 29

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

Question 30

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 31

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

Question 32

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

Question 33

Skilled tax research requires a combination of reasoning and creativity.

Question 34

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

Question 35

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

A)to meet the accuracy threshold of "substantial authority"
B)to avoid penalties under Section 6662 of the Code
C)to search properly with connectors and wildcards
D)to meet the accuracy threshold of "substantial authority" and to avoid penalties under Section 6662 of the Code

Question 36

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

Question 37

The power of Congress to implement and collect taxes is summarized in the Internal Revenue Code, the official title of U.S. tax law.

Question 38

The IRS website can be used to perform 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 39

The Tax Adviser journal is published by the AICPA.

Question 40

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

Question 41

All primary source material has the same precedential value.

Question 42

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

Question 43

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

Question 44

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

Question 45

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

Question 46

One of the issues a tax researcher should be concerned about is how definitive a research result must be.

Question 47

The CPA exam is prepared by the AICPA.

Question 48

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

Question 49

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