Question 1

The committee that is responsible for holding hearings on tax legislation for the House of Representatives is the

Accepted Answer

The Ways and Means Committee is the committee responsible for holding hearings on tax legislation for the House of Representatives. The Finance Committee is a committee in the Senate, the Joint Committee on Taxation is a non-standing committee that assists with tax-related legislation, and the Conference Committee is responsible for reconciling differences between the House and Senate versions of a bill.

Question 2

Investigation of a tax problem that involves a closed-fact situation means that

Accepted Answer

A closed-fact situation means that the client's transactions have already occurred and the tax questions must now be resolved. This requires investigation and analysis of the available facts and application of the law to come up with a resolution to the tax issue. Future events cannot be controlled or planned in a closed-fact situation as the transactions have already taken place.

Question 3

A revenue ruling is issued by the Internal Revenue Service only in response to a verbal inquiry by a taxpayer.

Accepted Answer

A revenue ruling is an official interpretation by the IRS of the Internal Revenue Code, tax treaties, and other tax laws. It is published in advance in the Internal Revenue Bulletin and applies prospectively to all taxpayers. Revenue rulings are not issued in response to verbal inquiries by individual taxpayers.

Question 4

Tax planning is not an integral part of open-fact situations.

Accepted Answer

Tax planning is an important part of open-fact situations, as it involves analyzing financial information and making strategic decisions to minimize tax liabilities.

Question 5

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

Accepted Answer

When the House and Senate versions of a tax bill are not in agreement, a conference committee is formed. This committee is made up of members from both the House and Senate and is responsible for resolving the differences between the two versions of the bill. The final version is then sent back to both chambers for a final vote before being sent to the President for signature.

Question 6

Final regulations have almost the same legislative weight as the IRC.

Accepted Answer

Final regulations are issued by the Treasury Department and have the force of law, similar to the Internal Revenue Code (IRC). They are the official interpretation of tax law and must be followed by taxpayers and the IRS.

Question 7

When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock,the tax advisor is faced with

Accepted Answer

When a taxpayer contacts a tax advisor requesting advice on how to dispose of a stock, it is usually an open-fact situation. This means that there is no clear answer or specific set of facts to apply to the situation. The tax advisor will need to gather information about the taxpayer's specific circumstances, goals, and preferences in order to provide the most advantageous advice.

Question 8

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

Accepted Answer

The Senate equivalent of the House Ways and Means Committee is the Senate Finance Committee, which has jurisdiction over revenue issues including taxes, customs, and global trade. The other options are not direct equivalents and do not have the same scope of responsibility.

Question 9

Appeals from the Court of Appeals go to the Supreme Court under a writ of certiorari.The Supreme Court decides whether or not they will hear the case.

Accepted Answer

This is the correct process for appeals to the Supreme Court from the Court of Appeals. The Supreme Court has discretion to decide which cases it will hear through the writ of certiorari.

Question 10

A tax bill introduced in the House of Representatives is then

Accepted Answer

Tax bills are first referred to the House Ways and Means Committee for analysis, hearings, and approval before they are presented to the entire House for consideration.

Question 11

Appeals from the U.S.Tax Court are to the Court of Appeals for the Federal Circuit.

Accepted Answer

Appeals from the U.S. Tax Court are typically made to the United States Court of Appeals for the circuit in which the taxpayer resides, not directly to the Court of Appeals for the Federal Circuit.

Question 12

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

Accepted Answer

The House of Representatives is where tax bills must originate according to the Constitution. The House Ways and Means Committee is responsible for considering and approving tax legislation before it can be considered by the entire House. Therefore, consideration by the House Ways and Means Committee occurs first in the process.

Question 13

Identify which of the following statements is true.

Accepted Answer

The answer of Identify which of the following statements is...

Question 14

Identify which of the following statements is false.

Accepted Answer

The answer of Identify which of the following statements is...

Question 15

The term "tax law" includes

Accepted Answer

Tax law includes all of the above, which are legislation, treasury regulations, and judicial decisions. Legislation refers to statutes passed by Congress, while treasury regulations are rules issued by the US Treasury Department to interpret and implement tax laws. Judicial decisions are court opinions that interpret and apply tax laws in specific cases. All of these sources comprise tax law and are used by taxpayers, tax professionals, and the IRS to determine tax obligations and resolve disputes.

Question 16

Taxpayers must pay the disputed tax prior to filing a case with the Tax Court.

Accepted Answer

Taxpayers do not have to pay the disputed tax prior to filing a case with the Tax Court. However, if they want to appeal the Tax Court's decision to a higher court, they may have to pay the disputed tax beforehand.

Question 17

Regulations issued prior to the latest tax legislation dealing with a specific Code section are still effective to the extent they do not conflict with the provisions in the new legislation.

Accepted Answer

Regulations issued prior to the latest tax legislation are still effective unless they conflict with the new legislation.

Question 18

A citator enables tax researchers to locate authorities (e.g.,cases and IRS pronouncements)that have cited a particular case.

Accepted Answer

A citator is a tool that allows researchers to find references to a particular case or authority in other legal documents such as cases and IRS pronouncements. It helps in determining if the case has been cited, affirmed, or overruled by other authorities.

Question 19

According to the Statements on Standards for Tax Services,CPAs must verify all tax return information submitted by reviewing client documentation.

Accepted Answer

According to the Statements on Standards for Tax Services, CPAs are not required to verify all tax return information by reviewing client documentation. They can rely on client-provided information unless it appears incorrect, incomplete, or inconsistent.

Question 20

The Internal Revenue Code of 1986 contains the current version of the tax law.

Accepted Answer

The Internal Revenue Code of 1986 is the current version of the tax law in the United States.

Quiz 15: Tax Research