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

Accepted Answer

Tax treaties typically address the taxation issues related to cross-border economic activities, such as the treatment of business and investment income earned by a foreign visitor in a host country (B), what tax disclosures must be made (A), and how to compute the taxable amount in the host country (D). They do not generally deal with how a foreign citizen is taxed on income in his own country (C), as this is a matter of domestic tax law.

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.

Accepted Answer

A tax law must be signed into law by the President or Congress must override a presidential veto of the proposed law. The Treasury Department does not have the authority to make a tax law into law.

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.

Accepted Answer

Code section numbers do not start over in each chapter within the Internal Revenue Code; instead, they continue sequentially throughout the document.

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​

Accepted Answer

A tax protester can engage in any or all of these actions, which are considered frivolous by the IRS and the Tax Court. Filing a frivolous return is submitting a tax return with no basis in law or fact, while bringing a frivolous matter before the Tax Court is challenging the IRS's assessment without proper legal authority or justification. Petitioning the Tax Court with a frivolous issue may result in penalties, such as the $25,000 penalty under IRC section 6673.

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

Accepted Answer

The sections of the Internal Revenue Code dealing with partnerships are found in the 700s. This range includes various rules and provisions specific to the formation, operation, and dissolution of partnerships for tax purposes.

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

Accepted Answer

Subtitle A of the Internal Revenue Code deals with income 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

Accepted Answer

The Ways and Means Committee is responsible for all tax-related legislation in the House of Representatives.

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

Accepted Answer

The first Internal Revenue Code was the Internal Revenue Code of 1939, which codified the federal tax laws.

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

Accepted Answer

Revenue rulings are administrative sources of the federal tax law issued by the IRS. Court rulings are judicial sources, the Internal Revenue Code is a legislative source, and tax treaties are international agreements.

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.

Accepted Answer

The Floor Debate Report is contained in the Congressional Record, it may include technical or detailed information excluded from the committee report(s), and it summarizes the discussions made in the House or the Senate concerning a proposed tax bill.

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

Accepted Answer

A subtitle of the Internal Revenue Code is indicated by a capital letter, such as "Subtitle A," and relates to a well-defined area of the law. It is not used as a short-hand reference to describe types of corporations, and while it does relate to a specific area of tax law, not all subtitles necessarily relate to corporations or business entities. Therefore, the best answer is D.

Question 12

Each Congress lasts for:
A)2 years
B)1 year
C)3 years
D)4 years

Accepted Answer

Each Congress lasts for 2 years, starting on January 3 of odd-numbered years and ending on January 3 of the next odd-numbered year. This is specified in Article 1, Section 2 of the US Constitution.

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

Accepted Answer

The current Internal Revenue Code is the Internal Revenue Code of 1986, which has been amended multiple times since its enactment. The most recent major amendment was the Tax Cuts and Jobs Act of 2017. The Internal Revenue Code of 1954 was replaced by the Internal Revenue Code of 1986.

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

Accepted Answer

The first federal income tax law was passed in 1861 as a result of the need to finance the Civil War.

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

Accepted Answer

If any differences exist between the House- and Senate-passed versions of a tax bill, the bill is referred to a Conference Committee, which is composed of members from both the House and Senate. The committee works to resolve the differences and create a compromise bill that both chambers can vote on.

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

Accepted Answer

P.L. 107-16 refers to the 16th public law enacted in the 107th Congress.

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.

Accepted Answer

Committee Reports are documents that provide explanations for proposed tax law changes, including the elements of the changes and the reasons behind them. They are a valuable resource for understanding the legislative intent and can be found in most subscription-based online tax services. While they are not published in the Internal Revenue Bulletin, which is reserved for official IRS pronouncements, their availability through various tax services and their role in explaining tax law changes make all the other statements correct except for the specific mention of the Internal Revenue Bulletin.

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

Accepted Answer

Tax treaties are agreements between two or more countries that aim to prevent double taxation of a taxpayer's income. Double taxation occurs when the same income is taxed in more than one country. Tax treaties help to eliminate this issue by determining which country has the right to tax a particular type of income. This helps to prevent multinational corporations from being taxed twice on their income, thereby minimizing their tax liability. However, tax treaties do not create "tax havens" and do not require business taxpayers to file returns in all countries in which they operate.

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.

Accepted Answer

Tax treaties are usually initiated by the Treasury Department, not the State Department, because they primarily deal with tax matters. The Treasury Department has the expertise and authority in matters related to taxation, making it the appropriate body to initiate and negotiate tax treaties.

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

Accepted Answer

The U.S. Constitution requires that taxes imposed by Congress must apply uniformly throughout the United States. This is known as the Uniformity Clause and is found in Article I, Section 8 of the Constitution. The Constitution also allows for direct taxes to be imposed, but they must be apportioned among the states according to their respective populations. However, the 16th Amendment to the Constitution allowed for a federal income tax to be imposed without being apportioned among the states.

Quiz 3: Constitutional and Legislative Sources

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

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

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

A "tax protester" is:

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

Subtitle A of the Internal Revenue Code deals with:

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

The first Internal Revenue Code was:

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

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

A subtitle of the Internal Revenue Code:

Each Congress lasts for:

The current Internal Revenue Code is the:

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

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

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

Which of the following statements is CORRECT regarding Committee Reports?

The overriding purpose of tax treaties is to:

Which of the following statements is INCORRECT regarding tax treaties?

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