Deck 1: Tax Research

Question 1

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

A) Finance Committee.
B) Ways and Means Committee.
C) Tax Committee.
D) Joint Conference Committee.

Answer 1

A

Question 2

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?

A) 20
B) 25
C) 26
D) 301

Answer 2

C

Question 3

The primary citation for a federal circuit court of appeals case would be

A) 40 AFTR 2d 78-1234.
B) 44 F.Supp. 403.
C) 3 F.3d 134.
D) 79-2 USTC & 9693.

Answer 3

C

Question 4

In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer.

Question 5

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

Question 6

Describe the format of a client memo.

Question 7

Identify which of the following statements is true.

A) Tax planning is an integral part of both closed-fact situations and open-fact situations.
B) The first step in conducting tax research is to clearly understand the issues involved.
C) The Statements on Standards for Tax Services recommend that only written tax advice be provided to the client in all situations.
D) All of the above are false.

Question 8

Title 26 of the U.S. Code includes

A) income tax legislation only.
B) gift tax and estate tax legislation only.
C) alcohol and tobacco tax legislation only.
D) all of the tax legislation mentioned above.

Question 9

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

A) signature or veto by the President of the United States
B) consideration by the Senate Finance Committee
C) consideration by the entire Senate
D) consideration by the House Ways and Means Committee

Question 10

Explain the difference between a closed-fact and open-fact situation.

Question 11

Identify which of the following statements is false.

A) When tax advisors speak of the "tax law," they usually have in mind just the Internal Revenue Code.
B) Members from both the House and the Senate are on the Conference Committee.
C) Records of committee hearings are helpful in determining Congressional intent.
D) All of the above are false.

Question 12

The term "tax law" includes

A) legislation.
B) treasury regulations.
C) judicial decisions.
D) all of the above.

Question 13

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

A) Ways and Means Committee.
B) Mediation Committee.
C) Revenue Committee.
D) Conference Committee.

Question 14

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

A) Finance Committee.
B) Joint Committee on Taxation.
C) Conference Committee.
D) Ways and Means Committee.

Question 15

Outline and discuss the tax research process.

Question 16

You have the following citation: Joel Munro, 92 T.C. 71 (1989). Which of the following statements is true?

A) The taxpayer, Joel Munro, won the case because there is no reference to the IRS.
B) The case appears on page 71 in Volume 92 of the official Tax Court of the United States Reports and the case was decided in 1989.
C) This citation refers to a taxpayer conference between the IRS and the taxpayer.
D) The case was tried in 1989 and was appealed in 1992.

Question 17

A tax bill introduced in the House of Representatives is then

A) referred to the House Ways and Means Committee for hearings and approval.
B) referred to the entire House for hearings.
C) voted upon by the entire House.
D) forwarded to the Senate Finance Committee for consideration.

Question 18

Identify which of the following statements is true.

A) Paragraph references are most commonly used when citing or referring to the tax statutes.
B) Title 26 of the United States Code and the Internal Revenue Code of 1986 are synonymous.
C) Before 1939, tax statutes were codified or compiled into one document.
D) The Internal Revenue Code contains chapters, which are further subdivided into titles.

Question 19

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

A) a restricted-fact situation.
B) a closed-fact situation.
C) an open-fact situation.
D) a recognized-fact situation.

Question 20

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

A) the client's transactions have already occurred and the tax questions must now be resolved.
B) the client's tax return has yet to be filed.
C) future events may be planned and controlled.
D) research is primarily concerned with applying the law to the facts as they exist.

Question 21

Tax Court memorandum decisions

A) cannot be appealed.
B) are not published.
C) have less precedential value than regular decisions.
D) usually deal with factual variations of issues litigated previously.

Question 22

Identify which of the following statements is true.

A) If regulations are issued prior to the latest tax legislation dealing with a specific Code section, the regulations are no longer effective to the extent they conflict with the provisions in the new legislation.
B) Legislative regulations are more likely to be invalidated by the courts than are interpretative regulations.
C) Regulations have more authoritative weight than tax statutes.
D) All of the above are false.

Question 23

Which of the following statements regarding proposed regulations is not correct?

A) Proposed regulations expire after three years.
B) Practitioners and other interested parties may comment on proposed regulations.
C) Proposed and temporary regulations are generally issued simultaneously.
D) Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.

Question 24

Identify which of the following statements is false.

A) The number "5" in the citation Reg. Sec. 1.166-5 refers to the paragraph number.
B) The Cumulative Bulletin is issued semiannually while the Internal Revenue Bulletin is issued weekly.
C) The citation Rev. Rul. 2006-5, I.R.B. 2006-1, 33, indicates that the revenue ruling can be found on page 33 of the 1st I.R.B. for 2006.
D) All of the above are false.

Question 25

When Congress passes a statute with language such as, "The Secretary shall prescribe such regulations as he may deem necessary," the regulations ultimately issued for that statute are

A) congressional regulations.
B) statutory regulations.
C) interpretative regulations.
D) legislative regulations.

Question 26

Which of the following documents is issued by the IRS to a specific taxpayer?

A) regulation
B) revenue procedure
C) letter ruling
D) information release

Question 27

Identify which of the following statements is false.

A) Letter rulings are not published by the U.S. Government Printing Office.
B) Technical advice memoranda are issued by the Internal Revenue Service's National Office to provide an answer to a technical question that arises in an audit.
C) The citation Ann. 2006-12, I.R.B. 2006-51, 22 refers to an annotation of an Internal Revenue Service release.
D) Announcements are more technical than information releases.

Question 28

A Technical Advice Memorandum is usually

A) an internal IRS document describing alternative legislative proposals.
B) part of a Tax Court decision.
C) requested by the taxpayer before entering into a taxable transaction.
D) issued by the national office in response to an audit request.

Question 29

Regulations are

A) equal in authority to legislation.
B) equal in authority to legislation if statutory.
C) presumed to be valid and to have almost the same weight as the IRC.
D) equal in authority to legislation if interpretative.

Question 30

The citation "Reg. Sec. 1.199-2" refers to

A) the first regulation issued in 1999.
B) the second regulation issued in 1999.
C) a regulation that interprets Code Section 199.
D) a regulation that can be found on page 199.

Question 31

Which regulation deals with Code Section 165?

A) Reg. Sec. 1.165-5
B) Reg. Sec. 165.183-5
C) Reg. Sec. 1.5-165
D) Reg. Sec. 165-5

Question 32

The number appearing immediately following the decimal place in a regulation citation refers to the

A) general subject matter of the regulation.
B) Code section being interpreted.
C) sequential number of the regulation.
D) subsection of the Code section being interpreted.

Question 33

Identify which of the following statements is false.

A) A revenue ruling is issued by the Internal Revenue Service only in response to a written inquiry by a taxpayer.
B) Rev. Proc. 2006-19 is a revenue procedure that was published in 2006.
C) The citation Ltr. Rul. 200611075 usually indicates the ruling was made public in the 11th week of 2006.
D) A technical advice memorandum is made available as a letter ruling.

Question 34

Which of the following best describes the weight of a revenue ruling?

A) Revenue rulings carry more weight than regulations.
B) Revenue rulings carry more weight than federal court decisions.
C) Regulations carry more weight than revenue rulings.
D) Revenue rulings should never be used as authority since they only apply to the taxpayer requesting the ruling.

Question 35

Final regulations can take effect on any of the following dates except

A) the effective date of the statutory language they interpret, provided they are issued within 18 months of the date of the change to the statute.
B) the date on which final regulations were proposed.
C) the date on which related temporary regulations were first published in the Federal Register.
D) the date on which they were issued in final form.

Question 36

Which of the following courts is not a trial court for tax cases?

A) U.S. Bankruptcy Court
B) U.S. District Court
C) U.S. Tax Court
D) U.S. Court of Federal Claims

Question 37

The taxpayer need not pay the disputed tax in advance when the suit is initiated in

A) U.S. Court of Federal Claims.
B) U.S. Tax Court.
C) U.S. District Court.
D) both A and B.

Question 38

Which regulation deals with the gift tax?

A) Reg. Sec. 1.165-5
B) Reg. Sec. 20.2014-5
C) Reg. Sec. 25.2518-5
D) Reg. Sec. 301.7002-5

Question 39

If the U.S. Supreme Court decides to hear an appeal of a tax case, it will grant a

A) writ of appeal.
B) writ of certiorari.
C) writ of detainer.
D) writ of habeas corpus.

Question 40

The citation "Rev. Rul. 2006-8, 2006-1 C.B. 541" refers to

A) the eighth ruling of 2006 found on page 541 in Vol. 1 of the 2006 Cumulative Bulletin.
B) the eighth ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin.
C) the 541st ruling of 2006 found on page eight in Vol. 1 of the 2006 Cumulative Bulletin.
D) the 1st ruling of 2006 found on page 541 in the 2006 volume of the Cumulative Bulletin.

Question 41

Identify which of the following statements is true.

A) The citation, 41 TCM 1272, refers to a Tax Court regular decision published by Commerce Clearing House.
B) The Federal Supplement contains only tax cases.
C) The American Federal Tax Reports contain only tax cases.
D) All of the above are false.

Question 42

Identify which of the following statements is false.

A) The acquiescence policy was adopted by the U.S. Tax Court to permit litigating parties to agree on the exact amount of the tax due.
B) Letter rulings are binding only with respect to the taxpayer requesting the ruling.
C) The small cases procedure of the U.S. Tax Court allows a less formal hearing but provides for no appeal.
D) The IRS may retroactively revoke an acquiescence.

Question 43

When a court discusses issues not raised by the facts, the comments

A) are excluded from the formal court opinion.
B) may be referenced by the parties in other cases having the same facts.
C) are not dicta.
D) will cause the court's decision to be declared invalid.

Question 44

Identify which of the following statements is false.

A) Regular and memorandum decisions of the Tax Court are published by the government in the Tax Court of the United States Reports.
B) The citation Cristofani, 97 T.C. 74 (1991) indicates that the decision is a regular decision of the Tax Court.
C) The citation Estate of Newhouse, 94 T.C. 193 (1990), nonacq. 1991-1 C.B. 1 indicates that the IRS did not formally disagree with this 1990 Tax Court decision until 1991.
D) The Board of Tax Appeals preceded the Tax Court.

Question 45

Identify which of the following statements is true.

A) The U.S. Court of Federal Claims hears cases only in Washington, D.C.
B) Each state has at least one U.S. District Court.
C) Federal district court decisions and federal courts of appeals decisions are not printed by the U.S. Government Printing Office.
D) All of the above are false.

Question 46

George's case was handled under the "small tax case procedure." He does not agree with the findings of the Tax Court. He would like to appeal the decision. Which one of the following is true?

A) There is no appeal.
B) He can appeal the case, but only if the amount of tax involved is greater than $5,000.
C) He would appeal first to the U.S. Court of Appeals for the Federal Circuit.
D) He would appeal first to the U.S. Court of Federal Claims.

Question 47

A tax case cannot be appealed when initiated in the

A) U.S. Court of Federal Claims.
B) U.S. Tax Court.
C) U.S. Tax Court using the small case procedures.
D) none of the above

Question 48

Which of the following citations is the primary citation for a U.S. District Court case?

A) 43 AFTR 2d 79-1023
B) 79-1 USTC &9323
C) 55 F.2d 930
D) 40 F.Supp. 453

Question 49

Identify which of the following statements is false.

A) When a court opinion discusses facts and issues on which the court does not rule, the comments are called dicta.
B) Dicta in a court opinion has no influence on other tax proceedings.
C) Published articles and tax services are examples of secondary sources of authority.
D) Dicta are not authoritative.

Question 50

The phrase "Entered under Rule 155" indicates that

A) the computation of the exact amount of the tax deficiency has been left to the litigating parties.
B) the court has not reached a decision concerning the appropriate tax treatment of an issue.
C) the parties have agreed not to appeal the decision.
D) only one Tax Court judge reviewed the case.

Question 51

Small case procedures of the U.S. Tax Court requires that the amount in dispute not exceed

A) $5,000.
B) $10,000.
C) $50,000.
D) $100,000.

Question 52

The Tax Court departs from its general policy of ruling uniformly for all taxpayers where

A) a U.S. District Court has ruled differently on the issue in the taxpayer's jurisdiction.
B) the U.S. Court of Federal Claims has ruled differently on the issue in the taxpayer's jurisdiction.
C) the Court of Appeals in the circuit to which the Tax Court decision would be appealed has ruled differently on the issue.
D) the IRS has indicated that it will acquiesce.

Question 53

You need to locate a recent tax case that was tried in a Federal district court. The decision is an "unreported" decision. This means the decision was

A) not published in the Federal Supplement.
B) not published in American Federal Tax Reports.
C) not published in United States Tax Cases.
D) settled out of court.

Question 54

Which of the following is a true statement regarding primary authority of tax law?

A) Articles in The Journal of Taxation are viewed as primary authority.
B) Primary authority includes the Code, as well as administrative and judicial interpretations.
C) The Bloomberg BNA Daily Tax Reporter is a source of primary tax authority.
D) Tax services are sources of primary tax authority.

Question 55

Which of the following is secondary authority?

A) Internal Revenue Code
B) Treasury Regulations
C) RIA and CCH tax services
D) Revenue Ruling

Question 56

Identify which of the following statements is false.

A) Citations to the AFTR and the USTC are referred to as secondary citations.
B) A circuit court of appeals must follow the opinion of another circuit court of appeals if the latter appeals court has previously ruled on the tax issue.
C) A U.S. Supreme Court opinion in a tax matter has the same status as Congressional tax legislation.
D) Circuit Court decisions are reported in the Federal Reporter.

Question 57

A jury trial is permitted in the

A) U.S. District Court.
B) U.S. Tax Court.
C) U.S. Court of Federal Claims.
D) U.S. Tax Court when the small case procedures are used.

Question 58

Identify which of the following statements is false.

A) The U.S. Tax Court must follow the previous decisions of the U.S. District Court for the district in which the taxpayer lives.
B) The U.S. Tax Court follows the previous decisions of the U.S. Court of Appeals to which the tax matter is appealable.
C) The opportunity for "forum shopping" occurs when different precedents on the same point exist.
D) The U.S. Tax Court may intentionally issue conflicting decisions.

Question 59

The acquiescence policy of the IRS extends to the

A) U.S. Supreme Court decisions.
B) U.S. Tax Court regular decisions.
C) U.S. District Court decisions.
D) both B and C

Question 60

Explain how committee reports can be used in tax research. What do they indicate?

Question 61

The Tax Court decides an expenditure is deductible in the year the issue was first litigated. The government appealed and won a reversal in the Ninth Circuit Court of Appeals. It is the only appellate decision regarding the issue. If and when the Tax Court encounters this issue again, how will it hold?

Question 62

Compare and contrast "interpretative" and "statutory" regulations.

Question 63

Discuss the purposes and scope of temporary regulations.

Question 64

What are some of the factors to consider when deciding in which court to file a tax-related claim?

Question 65

What is the purpose of Treasury Regulations?

Question 66

Why should tax researchers take note of the date on which a Treasury Regulation was adopted?

Question 67

What is an information release?

Question 68

Indicate which courts decided the case cited below. Also indicate on which pages and in which publications the authority is reported.
U.S. v. Maclin P. Davis, 397 U.S. 301, 25 AFTR 2d 70-827, 70-1 USTC & 9289 (1970).

Question 69

What are the purposes of citations in tax research?

Question 70

In 1998, Congress passed legislation concerning shifting the burden of proof to the IRS. The taxpayer must introduce "credible evidence" to shift the burden of proof to the IRS. What constitutes "credible evidence"?

Question 71

What is "forum-shopping"?

Question 72

Are letter rulings of precedential value to third parties?

Question 73

Where must a tax researcher look to access all Tax Court cases?

Question 74

Is it possible for the Tax Court to intentionally issue conflicting decisions?

Question 75

Does Title 26 contain statutory provisions dealing only with income taxation? Explain.

Question 76

Compare and contrast proposed, temporary, and final regulations.

Question 77

If the U.S. District Court for Rhode Island, the Tax Court, and the Eleventh Circuit have all ruled on a particular issue, then what precedents have been set for which courts in the future?

Question 78

Under what circumstances might a tax advisor find the provisions of a tax treaty useful?

Question 79

What is the difference between a taxpayer-requested letter ruling and a technical advice memorandum issued as a letter ruling?

Question 80

What are some of the consequences of the small cases procedure of the Tax Court?