Question 1

A letter ruling applies only to the taxpayer who asks for and obtains a letter ruling.

Accepted Answer

A letter ruling is specific to the taxpayer who requests it and cannot be relied upon by any other taxpayer.

Question 2

Post-1984 letter rulings may be substantial authority for purposes of the accuracy-related penalty in § 6662.

Accepted Answer

Post-1984 letter rulings are considered substantial authority for purposes of the accuracy-related penalty in § 6662.

Question 3

Determination letters usually involve completed transactions.

Accepted Answer

True

Question 4

Technical Advice Memoranda may not be cited as precedents by taxpayers.

Accepted Answer

Technical Advice Memoranda (TAMs) are not considered authoritative guidance and cannot be cited as precedents by taxpayers. They are only intended to provide guidance to IRS personnel regarding the resolution of a specific taxpayer's issue.

Question 5

Rules of tax law do not include Revenue Rulings and Revenue Procedures.

Accepted Answer

Revenue Rulings and Revenue Procedures are considered sources of authority in tax law and provide guidance on how tax laws should be interpreted and applied. Therefore, they are considered part of the rules of tax law.

Question 6

A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S. Court of Federal Claims. Only in the Tax Court can jurisdiction be obtained without first paying the assessed tax deficiency.

Accepted Answer

The U.S. Tax Court allows taxpayers to dispute their tax deficiencies before paying them, unlike the U.S. Court of Federal Claims, where the taxpayer must first pay the assessed tax and then sue for a refund.

Question 7

This Internal Revenue Code section citation is incorrect: § 212(1).

Accepted Answer

The answer of This Internal Revenue Code section citation is...

Question 8

In recent years, Congress has been relatively successful in simplifying the Internal Revenue Code.

Accepted Answer

Congress has not been successful in simplifying the Internal Revenue Code in recent years. In fact, the code has continued to expand and become more complex.

Question 9

Revenue Procedures deal with the internal management practices and procedures of the IRS.

Accepted Answer

Revenue Procedures provide guidance to IRS employees on procedures to follow in their daily work, including how to process tax returns, issue refunds, and handle taxpayer disputes. They do not establish legal precedent or rights for taxpayers.

Question 10

The IRS is not required to make a letter ruling public.

Accepted Answer

The answer of The IRS is not required to make...

Question 11

The first codification of the tax law occurred in 1954.

Accepted Answer

The first codification of the tax law in the United States occurred with the Internal Revenue Code of 1939, not 1954. The 1954 and later 1986 revisions were significant updates to the tax code, but not the first codification.

Question 12

The following citation could be a correct citation: Rev. Rul. 95-271,1995-64 I.R.B. 18.

Accepted Answer

The answer of The following citation could be a correct...

Question 13

Temporary Regulations are only published in the Internal Revenue Bulletin.

Accepted Answer

Temporary Regulations are published in both the Federal Register and the Internal Revenue Bulletin.

Question 14

Subchapter D refers to the "Corporate Distributions and Adjustments" section of the Internal Revenue Code.

Accepted Answer

The answer of Subchapter D refers to the "Corporate Distributions...

Question 15

A taxpayer should always minimize his or her tax liability.

Accepted Answer

While minimizing tax liability can be financially beneficial, it must be done within the confines of the law. Overly aggressive tax strategies can lead to legal issues, and there are situations where taxpayers might choose not to minimize taxes, such as supporting public services through taxes or taking advantage of tax credits that require a higher taxable income.

Question 16

Revenue Rulings issued by the National Office of the IRS carry the same legal force and effect as Regulations.

Accepted Answer

Revenue Rulings are the IRS's official interpretation of how the law is applied to specific factual situations, whereas Regulations (also known as Treasury Regulations) are the IRS's official interpretation of the tax code itself and carry more legal weight. Regulations are generally issued following a notice and comment period and are published in the Federal Register, making them more formal and authoritative than Revenue Rulings.

Question 17

A Revenue Ruling is a judicial source of Federal tax law.

Accepted Answer

A Revenue Ruling is an administrative source of Federal tax law, issued by the Internal Revenue Service (IRS) to interpret the tax laws and guide taxpayers.

Question 18

A tax professional need not worry about the relative weight of authority within the various tax law sources.

Accepted Answer

A tax professional should be aware of the relative weight of authority within the various tax law sources in order to properly advise clients and make informed decisions. For example, a statute would generally carry more weight than a regulation, and a regulation would generally carry more weight than a revenue ruling or other guidance.

Question 19

Technical Advice Memoranda deal with completed transactions.

Accepted Answer

Technical Advice Memoranda (TAMs) are issued by the IRS to provide guidance on complex tax issues related to completed transactions. TAMs are used to explain the IRS's position on a particular issue and provide direction on how to handle similar situations in the future.

Question 20

In general, Regulations are issued immediately after a statute is enacted.

Accepted Answer

Regulations are not necessarily issued immediately after a statute is enacted. It can take time for the relevant agency or department to draft and finalize regulations based on the new law.

Quiz 2: Working with the Tax Law