Deck 1: Tax Research

Question 1

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.

Answer 1

True

Question 2

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

Answer 2

False

Question 3

Describe the format of a client memo.

Answer 3

A client memo should include a statement of the facts, a list of issues, a discussion of relevant authority, analysis, and recommendations of appropriate actions to the client based on the research results.

Question 4

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

Question 5

Identify which of the following statements is false.

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

Question 6

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

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

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

Question 8

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

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

Question 9

The term "tax law" includes

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

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

Question 14

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

A) 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.
B) The case was tried in 1989 and was appealed in 1992.
C) The taxpayer, Joel Munro, won the case because there is no reference to the IRS.
D) This citation refers to a taxpayer conference between the IRS and the taxpayer.

Question 15

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.

Question 16

Identify which of the following statements is true.

A) The first step in conducting tax research is to clearly understand the issues involved.
B) Tax planning is an integral part of both closed- fact situations and open- fact situations.
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 17

Which of the following citations denotes a regular decision of the Tax Court?

A) 35 T.C. 1083 (2003)
B) 39 AFTR 2d 77- 640
C) 41 TCM 1272
D) all of the above

Question 18

When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the court is following the

A) Golsen rule.
B) Forum shopping rule.
C) Acquiescence rule.
D) Conformity rule.

Question 19

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

Question 20

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

Question 21

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

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

Question 22

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

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

Question 23

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

A) the date on which they were issued in final form.
B) the date on which related temporary regulations were first published in the Federal Register.
C) the date on which final regulations were proposed.
D) 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.

Question 24

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

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

Question 25

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

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

Question 26

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

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

Question 27

Which regulation deals with the gift tax?

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

Question 28

Identify which of the following statements is false.

A) 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.
B) The Cumulative Bulletin is issued semiannually while the Internal Revenue Bulletin is issued weekly.
C) The number "5" in the citation Reg. Sec. 1.166- 5 refers to the paragraph number.
D) All of the above are false.

Question 29

Regulations are

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

Question 30

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

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

Question 31

Identify which of the following statements is true.

A) Legislative regulations are more likely to be invalidated by the courts than are interpretative regulations.
B) 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.
C) Regulations have more authoritative weight than tax statutes.
D) All of the above are false.

Question 32

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

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

Question 33

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) forwarded to the Senate Finance Committee for consideration.
D) voted upon by the entire House.

Question 34

Identify which of the following statements is true.

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

Question 35

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

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

Question 36

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

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

Question 37

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

Question 38

Title 26 of the U.S. Code includes

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

Question 39

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

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

Question 40

Which regulation deals with Code Section 165?

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

Question 41

Identify which of the following statements is true.

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

Question 42

The phrase "Entered under Rule 155" indicates that

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

Question 43

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

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

Question 44

A jury trial is permitted in the

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

Question 45

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

Question 46

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

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

Question 47

Identify which of the following statements is false.

A) 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.
B) The citation Ann. 2006- 12, I.R.B. 2006- 51, 22 refers to an annotation of an Internal Revenue Service release.
C) Letter rulings are not published by the U.S. Government Printing Office.
D) Announcements are more technical than information releases.

Question 48

Identify which of the following statements is true.

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

Question 49

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

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

Question 50

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

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

Question 51

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 Board of Tax Appeals preceded the Tax Court.
C) The citation Cristofani, 97 T.C. 74 (1991) indicates that the decision is a regular decision of the Tax Court.
D) 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.

Question 52

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

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

Question 53

The acquiescence policy of the IRS extends to the

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

Question 54

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

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

Question 55

A Technical Advice Memorandum is usually

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

Question 56

Identify which of the following statements is false.

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

Question 57

A tax case cannot be appealed when initiated in the

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

Question 58

Tax Court memorandum decisions

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

Question 59

Identify which of the following statements is false.

A) A U.S. Supreme Court opinion in a tax matter has the same status as Congressional tax legislation.
B) Circuit Court decisions are reported in the Federal Reporter.
C) Citations to the AFTR and the USTC are referred to as secondary citations.
D) 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.

Question 60

Identify which of the following statements is false.

A) The IRS may retroactively revoke an acquiescence.
B) Letter rulings are binding only with respect to the taxpayer requesting the ruling.
C) 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.
D) The small cases procedure of the U.S. Tax Court allows a less formal hearing but provides for no appeal.

Question 61

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

Question 62

Are letter rulings of precedential value to third parties?

Question 63

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

Question 64

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

A) the IRS has indicated that it will acquiesce.
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) a U.S. District Court has ruled differently on the issue in the taxpayer's jurisdiction.

Question 65

Identify which of the following statements is false.

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

Question 66

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

Question 67

Which of the following is secondary authority?

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

Question 68

What are the purposes of citations in tax research?

Question 69

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

Question 70

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

Question 71

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

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

Question 72

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

Question 73

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

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

Question 74

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

Question 75

What is an information release?

Question 76

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 77

What is the purpose of Treasury Regulations?

Question 78

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

Question 79

Discuss the purposes and scope of temporary regulations.

Question 80

Identify which of the following statements is false.

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