Question 1

Edie would like to better understand a new code section enacted four weeks ago.Which of the following authorities will help Edie understand the newly enacted code section?

Accepted Answer

Committee reports are documents that are produced by a committee that have analyzed a proposed law or code section. The committee report will explain the intent behind the new law, the objectives it aims to achieve, and the practical implications of the new law. Therefore, committee reports can be the best source for Edie to understand the newly enacted code section.

Question 2

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question.Which trial level court would she prefer to have issued the opinion?

Accepted Answer

As the tax question is related to tax law, the best trial level court to issue a favorable opinion would be the Tax Court. This court specifically deals with tax issues and its decisions have the authority of precedent in tax cases. The other trial level courts may not have the same expertise or focus on tax law.

Question 3

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

Accepted Answer

Stare decisis is the judicial doctrine that means a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction.

Question 4

Which of the following has the highest authoritative weight?

Accepted Answer

Legislative regulations are created by Congress or state legislatures, and therefore, they have the highest authoritative weight. They are considered the highest form of authority in tax law and must be followed by taxpayers, the IRS, and other government agencies. Private letter rulings, revenue rulings, action on decision, and revenue procedures are all types of administrative guidance issued by the IRS, which have varying levels of authority.

Question 5

The regulation with the lowest authoritative weight is the:

Accepted Answer

Proposed regulations are regulations that have been proposed for adoption but have not yet become effective. They carry the lowest authoritative weight because they have not gone through the full rulemaking process and are not yet finalized.

Question 6

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Accepted Answer

The answer of Jeremy has a new client.He has identified...

Question 7

Which of the following is not a common tool used in conducting tax research?

Accepted Answer

All of the choices listed are common tools used in conducting tax research, so none of the choices are correct.

Question 8

Which of the following is not considered a secondary authority?

Accepted Answer

Private Letter Ruling (PLR) is considered a primary authority as it is an official interpretation of the tax law by the IRS. Text book, tax article, and tax service are all examples of secondary authority. Therefore, the correct answer is B.

Question 9

In a planning context,

Accepted Answer

In a planning context, open facts (facts that are subject to change or are still being determined) are preferred to closed facts (facts that are settled and unlikely to change) because they allow for more flexibility and adaptation in the planning process. This allows planners to consider a wider range of possible scenarios and make adjustments as necessary.

Question 10

Which of the following has the highest authoritative weight?

Accepted Answer

Revenue rulings are issued by the IRS and have the highest authoritative weight. Private letter rulings are limited to specific taxpayers and situations, while tax services and articles are interpretations or opinions by third-party sources. Textbooks can be helpful resources but do not have the same level of authority as IRS-issued rulings.

Question 11

Which of the following is not a source of a tax practitioner's professional responsibilities?

Accepted Answer

All of the listed sources are sources of a tax practitioner's professional responsibilities. Therefore, none of the choices are correct, making E the best choice.

Question 12

Which of the following committees typically initiates tax legislation?

Accepted Answer

The House Ways and Means Committee has primary jurisdiction over tax legislation in the United States House of Representatives.

Question 13

If the President vetoes tax legislation,Congress:

Accepted Answer

According to the US Constitution, Congress can override a presidential veto with a two-thirds positive vote in both the House of Representatives and the Senate. Therefore, option C is the correct answer.

Question 14

Circular 230 was issued by:

Accepted Answer

Circular 230 is a set of guidelines issued by the IRS that govern the practice of tax professionals, including attorneys, accountants, and enrolled agents, who represent taxpayers before the IRS.

Question 15

Which of the following types of tax services are arranged by code section?

Accepted Answer

The answer of Which of the following types of tax...

Question 16

Generally,code sections are arranged (grouped together):

Accepted Answer

It is best to group code sections together by topic, as it makes it easier to read and understand the code. This way, related sections of code are together, making the overall structure of the code clearer.

Question 17

Princess,who resides in the 2ⁿᵈ Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Accepted Answer

Princess would prefer the 2nd Circuit, where she resides, to have issued the opinion. However, if the 2nd Circuit did not issue a favorable opinion, she would also prefer the Federal Circuit, as it hears appeals from all circuit courts and could provide a favorable decision regardless of the circuit of origin.

Question 18

Josephine is considering taking a 6-month rotation in Paris for her job.Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

Accepted Answer

A tax treaty is a bilateral agreement between two countries that outlines the tax treatment of certain types of income for individuals and businesses. Given that Josephine is considering working in Paris, a tax treaty between the United States and France may provide guidance on how her income will be taxed and whether she will be eligible for any tax benefits or exemptions. A determination letter, private letter ruling, regulation, or revenue procedure may not specifically address Josephine's situation or provide guidance on cross-border tax issues.

Question 19

According to Statement on Standards for Tax Services No.1,a tax practitioner can recommend a tax return position:

Accepted Answer

According to Statement on Standards for Tax Services No.1, a tax practitioner can recommend a tax return position if it complies with applicable tax authority standards. The other options listed are not acceptable reasons for recommending a tax return position.

Question 20

Which of the following has the lowest authoritative weight?

Accepted Answer

Private letter rulings are specific to the taxpayer who requested them and do not have general applicability or precedential value, making them the lowest authoritative weight. Legislative regulations are the highest authoritative weight, followed by interpretative regulations, revenue rulings, and revenue procedures.

Quiz 2: Tax Compliance, The IRS and Tax Authorities

Edie would like to better understand a new code section enacted four weeks ago.Which of the following authorities will help Edie understand the newly enacted code section?

Jaime recently found a "favorable" trial level court opinion directly on point for her tax question.Which trial level court would she prefer to have issued the opinion?

Which judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction?

Which of the following has the highest authoritative weight?

The regulation with the lowest authoritative weight is the:

Jeremy has a new client.He has identified a research question that relates to a transaction that the client completed several months ago.This type of research question will primarily involve:

Which of the following is not a common tool used in conducting tax research?

Which of the following is not considered a secondary authority?

In a planning context,

Which of the following has the highest authoritative weight?

Which of the following is not a source of a tax practitioner's professional responsibilities?

Which of the following committees typically initiates tax legislation?

If the President vetoes tax legislation,Congress:

Circular 230 was issued by:

Which of the following types of tax services are arranged by code section?

Generally,code sections are arranged (grouped together) :

Princess,who resides in the 2ⁿᵈ Circuit,recently found a circuit court case that is favorable to her income tax research question.Which of the following circuits would she prefer to have issued the opinion?

Josephine is considering taking a 6-month rotation in Paris for her job.Which type of authority may be especially helpful in determining the tax consequences of Josephine's job in Paris?

According to Statement on Standards for Tax Services No.1,a tax practitioner can recommend a tax return position:

Which of the following has the lowest authoritative weight?