Question 1

In general, the Supreme Court only hears tax cases when one or more of certain conditions apply.These conditions exclude which of the following?

Accepted Answer

The Supreme Court only hears tax cases when one or more of the following conditions apply: 
1) The Courts of Appeals are in conflict on an issue.
2) A decision of a Court of Appeals is in apparent conflict with a decision of the Supreme Court.
3) The tax deficiency involved exceeds $100,000.
4) The Court of Appeals has not used accepted or usual methods of judicial procedure or has sanctioned an unusual method by the trial court. 
Option D is the exception and therefore, excluded.

Question 2

Which one of the following authorities is not correctly paired with a source where that authority might be found?

Accepted Answer

Letter rulings are not typically published in the Code of Federal Regulations. They are typically issued in response to specific taxpayer inquiries and are only binding on the taxpayer who requested them. The other answer choices are correctly paired with sources where those authorities can be found.

Question 3

Temporary regulations are generally issued

Accepted Answer

Temporary regulations are issued shortly after enactment of a major change in the tax law so that taxpayers have guidance until final regulations are formulated. They have the same binding effect as final regulations until they are replaced by final regulations.

Question 4

Which of the following administrative interpretations would be generally accorded the force and effect of law?

Accepted Answer

Legislative regulations are issued under a specific grant of authority by Congress and have the force and effect of law.

Question 5

Which of the statements below is not a characteristic of the Tax Court?

Accepted Answer

This statement is not a characteristic of the Tax Court as taxpayers do not have to pay the alleged deficiency before suing for a refund. In fact, taxpayers can file a petition with the court to dispute the deficiency before paying any amount.

Question 6

For the most accurate indication of Congressional intent for the enactment of a particular tax bill, a researcher would most likely consult the

Accepted Answer

The answer of For the most accurate indication of Congressional...

Question 7

A taxpayer may take a case into the District Court

Accepted Answer

A taxpayer may take a case into the District Court only in the district where he or she resides.

Question 8

Taxpayers who are in doubt about the particular tax consequences of a contemplated transaction may ask the IRS for a ruling on the tax question involved.Which one of the following statements is not true?

Accepted Answer

The answer of Taxpayers who are in doubt about the...

Question 9

Which of the following statements is not a characteristic of the Internal Revenue Code?

Accepted Answer

The Internal Revenue Code itself does not typically include the reasons why Congress made specific changes or additions. These reasons are often found in legislative history documents, such as committee reports, rather than in the Code.

Question 10

Before litigating a tax case in court, the taxpayer must

Accepted Answer

Before litigating a tax case in court, the taxpayer must have exhausted the required administrative remedies available within the IRS. This means that the taxpayer must have attempted to resolve the issue with the IRS through the administrative process, which may include filing a protest letter, appealing an adverse decision by the IRS, or pursuing alternative dispute resolution methods. Failing to exhaust all administrative remedies could result in the court dismissing the case for lack of jurisdiction.

Question 11

Letter ruling 201107048 was issued in which of the following months.

Accepted Answer

The first four digits of the ruling number "2011" indicates the year it was issued, and the next two digits "07" indicate that it was the 7th ruling issued in that year. Therefore, the ruling "201107048" was issued in February 2011.

Question 12

The difference between regulations and revenue rulings is that

Accepted Answer

Revenue rulings are interpretations of tax laws by the IRS and are used to guide taxpayers in specific situations, but they do not have the same legal authority as regulations. Regulations are issued by the Treasury Department with the force of law to implement the tax statutes enacted by Congress, making them a direct extension of the law-making powers of Congress.

Question 13

Which one of the following types of Regulations cannot be cited as authoritative?

Accepted Answer

Proposed regulations are not authoritative as they are only a suggestion for future actions and have not yet been implemented.

Question 14

Which of the following could be a reason for a taxpayer not taking his tax case to a federal court of appeals?

Accepted Answer

All of the above could be reasons for a taxpayer not taking his tax case to a federal court of appeals. It may be too expensive, administrative remedies may not have been exhausted or there may be no appealable decision from a trial court.

Question 15

Which one of the following is not true of the Supreme Court's appellate jurisdiction?

Accepted Answer

The Supreme Court does not review many tax cases during the year because they are not considered to be of national importance. Instead, tax cases are usually heard at the lower levels, such as district courts and Courts of Appeals.

Question 16

Although the Small Tax Division of the U.S.Tax Court allows a taxpayer to obtain a decision with little formality or expense, a disadvantage is that

Accepted Answer

In the Small Tax Division of the U.S. Tax Court, decisions are final and cannot be appealed, which is a disadvantage for taxpayers seeking further recourse.

Question 17

The body or group that generally initiates revenue bills is

Accepted Answer

According to the Constitution, all bills for raising revenue must originate in the House of Representatives. Therefore, the House of Representatives is the body that generally initiates revenue bills.

Question 18

Which of the following is not a characteristic of U.S.District Courts?

Accepted Answer

This statement is not a characteristic of U.S. District Courts. Generally, taxpayers are required to pay any alleged deficiency before they can sue the IRS in court.

Question 19

Which one of the following authorities is not correctly paired with a reporter or case system where that authority might be found?

Accepted Answer

Decisions of the Small Tax Division of the Tax Court are not published in the United States Tax Court Reports. These decisions are generally not published in any reporter.

Question 20

Which of the following sources of authority would most likely contain a review of Congress's intentions with respect to a particular piece of tax legislation?

Accepted Answer

The House Ways and Means Committee is responsible for the originating of all taxation laws, and their report on a particular tax legislation provides insight into Congress's intentions regarding that legislation. The Internal Revenue Code provides the actual law, the Code of Federal Regulations provides the administrative regulations, and revenue procedures and technical advice memoranda are internal guidance documents used by the IRS.

Quiz 17: Sources and Applications of Federal Tax Law