Question 1

Determination letters usually involve finalized transactions.

Accepted Answer

True

Question 2

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

Accepted Answer

False

Question 3

Regulations are generally issued immediately after a statute is enacted.

Accepted Answer

Regulations are not necessarily issued immediately after a statute is enacted. It may take some time for agencies to draft and finalize the regulations.

Question 4

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

Accepted Answer

Revenue Procedures provide guidance to IRS employees on how to carry out their duties and responsibilities, and establish processes and procedures to ensure consistency in how the tax code is enforced.

Question 5

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, which remains complex and difficult to navigate for many taxpayers.

Question 6

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 7

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 is not binding on other taxpayers.

Question 8

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

Accepted Answer

Revenue Rulings and Revenue Procedures are considered to be sources of tax law as they provide guidance on how to interpret and apply the tax code. While they may not have the same weight as statutes or regulations, they are still relevant in determining a taxpayer's compliance with the law.

Question 9

Temporary Regulations are only published in the Internal Revenue Bulletin.

Accepted Answer

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

Question 10

Technical Advice Memoranda deal with completed transactions.

Accepted Answer

Technical Advice Memoranda (TAMs) are issued by the IRS to provide guidance to its agents on complex and technical tax issues related to completed transactions. TAMs are not binding, but are relied upon as persuasive authority by taxpayers and tax practitioners.

Question 11

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 12

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 13

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

Accepted Answer

Technical Advice Memoranda (TAMs) are advisory in nature and do not have precedential value for other taxpayers or the IRS. They are only binding on the taxpayer who requested it and the IRS examiner who issued it.

Question 14

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

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

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

Accepted Answer

According to Treasury Regulation § 1.6662-4(d)(3)(iii), post-1984 letter rulings may qualify as substantial authority for purposes of the accuracy-related penalty in § 6662.

Question 17

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 18

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

Accepted Answer

It is important for a tax professional to consider the relative weight of authority within the various tax law sources in order to accurately interpret and apply the law to their clients' situations. Some sources may carry more weight than others and have a greater impact on the outcome of a tax case.

Question 19

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 20

The Code section citation is incorrect: § 212(1).

Accepted Answer

The answer of The Code section citation is incorrect: §...

Quiz 2: Working With the Tax Law