Question 1

Which of the following steps,related to a tax bill,occurs first?
A)signature or veto by the President of the United States
B)consideration by the Senate Finance Committee
C)consideration by the entire Senate
D)consideration by the House Ways and Means Committee

Accepted Answer

The first step in the process of passing a tax bill is usually consideration by the House Ways and Means Committee, which is responsible for writing tax legislation.

Question 2

Which regulation deals with the gift tax?
A)Reg.Sec.1.165-5
B)Reg.Sec.20.2014-5
C)Reg.Sec.25.2518-5
D)Reg.Sec.301.7002-5

Accepted Answer

Regulation Section 25.2518-5 deals with the gift tax, specifically addressing the qualified disclaimers and their impact on gift and estate taxation. The other answer choices do not pertain to the gift tax.

Question 3

Identify which of the following statements is false.
A)A revenue ruling is issued by the Internal Revenue Service only in response to a written inquiry by a taxpayer.
B)Rev.Proc.2006-19 is a revenue procedure that was published in 2006.
C)The citation Ltr.Rul.200611075 usually indicates the ruling was made public in the 11th week of 2006.
D)A technical advice memorandum is made available as a letter ruling.

Accepted Answer

Revenue rulings are not issued solely in response to written inquiries by taxpayers; they are also issued by the IRS to provide guidance to all taxpayers and IRS personnel.

Question 4

Which of the following best describes the weight of a revenue ruling?
A)Revenue rulings carry more weight than regulations.
B)Revenue rulings carry more weight than federal court decisions.
C)Regulations carry more weight than revenue rulings.
D)Revenue rulings should never be used as authority since they only apply to the taxpayer requesting the ruling.

Accepted Answer

Regulations are formal statements of legal interpretation authorized by Congress, while revenue rulings are only interpretations issued by the IRS in response to a specific taxpayer request. Therefore, regulations carry more weight than revenue rulings.

Question 5

When the House and Senate versions of a tax bill are not in agreement,the disagreements are resolved by the
A)Ways and Means Committee.
B)Mediation Committee.
C)Revenue Committee.
D)Conference Committee.

Accepted Answer

When the House and Senate versions of a tax bill are not in agreement, the disagreements are resolved by a conference committee. This committee is made up of members from both the House and Senate, who work to come up with a compromise bill that can be passed by both chambers.

Question 6

Identify which of the following statements is true.
A)Paragraph references are most commonly used when citing or referring to the tax statutes.
B)Title 26 of the United States Code and the Internal Revenue Code of 1986 are synonymous.
C)Before 1939,tax statutes were codified or compiled into one document.
D)The Internal Revenue Code contains chapters,which are further subdivided into titles.

Accepted Answer

Title 26 of the United States Code is indeed synonymous with the Internal Revenue Code of 1986, as it is the formal codification of the federal tax laws in the United States.

Question 7

Regulations are
A)equal in authority to legislation.
B)equal in authority to legislation if statutory.
C)presumed to be valid and to have almost the same weight as the IRC.
D)equal in authority to legislation if interpretative.

Accepted Answer

Regulations are generally presumed to be valid and to have almost the same weight as the Internal Revenue Code (IRC), reflecting their role in detailing and implementing the broad principles found in legislation.

Question 8

Identify which of the following statements is false.
A)The number "5" in the citation Reg.Sec.1.166-5 refers to the paragraph number.
B)The Cumulative Bulletin is issued semiannually while the Internal Revenue Bulletin is issued weekly.
C)The citation Rev.Rul.2006-5,I.R.B.2006-1,33,indicates that the revenue ruling can be found on page 33 of the 1st I.R.B.for 2006.
D)All of the above are false.

Accepted Answer

The number "5" in the citation Reg. Sec. 1.166-5 actually refers to the section number, not the paragraph number.

Question 9

Which of the following documents is issued by the IRS to a specific taxpayer?
A)regulation
B)revenue procedure
C)letter ruling
D)information release

Accepted Answer

A letter ruling is a written statement issued by the IRS in response to a specific taxpayer's request for guidance on a tax issue. It applies only to the taxpayer who requested it and can be relied upon by that taxpayer. Regulations, revenue procedures, and information releases are issued to provide guidance to taxpayers in general and do not apply to specific individuals.

Question 10

Identify which of the following statements is true.
A)If regulations are issued prior to the latest tax legislation dealing with a specific Code section,the regulations are no longer effective to the extent they conflict with the provisions in the new legislation.
B)Legislative regulations are more likely to be invalidated by the courts than are interpretative regulations.
C)Regulations have more authoritative weight than tax statutes.
D)All of the above are false.

Accepted Answer

This statement is true according to the principle of statutory construction known as the "last-in-time rule." If the latest tax legislation conflicts with previously issued regulations, the new legislation will prevail to the extent of the conflict. Legislative regulations have the same weight as statutory law, and interpretative regulations are given deference by the courts. Therefore, B and C are false.

Question 11

The Senate equivalent of the House Ways and Means Committee is the Senate
A)Finance Committee.
B)Ways and Means Committee.
C)Tax Committee.
D)Joint Conference Committee.

Accepted Answer

The Senate equivalent of the House Ways and Means Committee is the Senate Finance Committee.

Question 12

When Congress passes a statute with language such as,"The Secretary shall prescribe such regulations as he may deem necessary," the regulations ultimately issued for that statute are
A)congressional regulations.
B)statutory regulations.
C)interpretative regulations.
D)legislative regulations.

Accepted Answer

Regulations issued under a statute with language such as "shall prescribe" are considered legislative regulations. This means that the agency has been given the authority to create regulations with the force of law, but only within the scope set by Congress. The agency is essentially acting as a delegate of Congress in creating regulations to implement the statute.

Question 13

Which regulation deals with Code Section 165?
A)Reg.Sec.1.165-5
B)Reg.Sec.165.183-5
C)Reg.Sec.1.5-165
D)Reg.Sec.165-5

Accepted Answer

Regulation Section 1.165-5 deals with Code Section 165, which pertains to deductions for losses.

Question 14

Which of the following statements regarding proposed regulations is not correct?
A)Proposed regulations expire after three years.
B)Practitioners and other interested parties may comment on proposed regulations.
C)Proposed and temporary regulations are generally issued simultaneously.
D)Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.

Accepted Answer

Proposed regulations do provide insight into the IRS's interpretation of the tax law, as they outline the IRS's position on the issue at hand and provide guidance for taxpayers and practitioners.

Question 15

The citation "Reg.Sec.1.199-2" refers to
A)the first regulation issued in 1999.
B)the second regulation issued in 1999.
C)a regulation that interprets Code Section 199.
D)a regulation that can be found on page 199.

Accepted Answer

The citation "Reg.Sec.1.199-2" refers to a regulation that interprets Code Section 199. The term "Reg.Sec." commonly refers to a regulation section, and the specific numbering ("1.199-2") indicates that it pertains to Internal Revenue Code Section 199, which relates to the deduction for domestic production activities.

Question 16

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?
A)20
B)25
C)26
D)301

Accepted Answer

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in Title 26 of the Code.

Question 17

The number appearing immediately following the decimal place in a regulation citation refers to the
A)general subject matter of the regulation.
B)Code section being interpreted.
C)sequential number of the regulation.
D)subsection of the Code section being interpreted.

Accepted Answer

The number immediately following the decimal place in a regulation citation refers to the Code section being interpreted. This helps in identifying the specific section of the code that the regulation is meant to provide guidance on.

Question 18

Final regulations can take effect on any of the following dates except
A)the effective date of the statutory language they interpret,provided they are issued within 18 months of the date of the change to the statute.
B)the date on which final regulations were proposed.
C)the date on which related temporary regulations were first published in the Federal Register.
D)the date on which they were issued in final form.

Accepted Answer

The answer of Final regulations can take effect on any...

Question 19

Title 26 of the U.S.Code includes
A)income tax legislation only.
B)gift tax and estate tax legislation only.
C)alcohol and tobacco tax legislation only.
D)all of the tax legislation mentioned above.

Accepted Answer

Title 26 of the U.S.Code includes income tax legislation, gift tax and estate tax legislation, and alcohol and tobacco tax legislation. Therefore, the best choice is D, all of the tax legislation mentioned above.

Question 20

The citation "Rev.Rul.2006-8,2006-1 C.B.541" refers to
A)the eighth ruling of 2006 found on page 541 in Vol.1 of the 2006 Cumulative Bulletin.
B)the eighth ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin.
C)the 541st ruling of 2006 found on page eight in Vol.1 of the 2006 Cumulative Bulletin.
D)the 1st ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin.

Accepted Answer

The citation format indicates the eighth ruling of 2006, and it specifies that it can be found on page 541 in the first volume of the 2006 Cumulative Bulletin.

Quiz 1: Tax Research

Which of the following steps,related to a tax bill,occurs first?

Which regulation deals with the gift tax?

Identify which of the following statements is false.

Which of the following best describes the weight of a revenue ruling?

When the House and Senate versions of a tax bill are not in agreement,the disagreements are resolved by the

Identify which of the following statements is true.

Regulations are

Identify which of the following statements is false.

Which of the following documents is issued by the IRS to a specific taxpayer?

Identify which of the following statements is true.

The Senate equivalent of the House Ways and Means Committee is the Senate

When Congress passes a statute with language such as,"The Secretary shall prescribe such regulations as he may deem necessary," the regulations ultimately issued for that statute are

Which regulation deals with Code Section 165?

Which of the following statements regarding proposed regulations is not correct?

The citation "Reg.Sec.1.199-2" refers to

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?

The number appearing immediately following the decimal place in a regulation citation refers to the

Final regulations can take effect on any of the following dates except

Title 26 of the U.S.Code includes

The citation "Rev.Rul.2006-8,2006-1 C.B.541" refers to