Deck 16: Tax Research

Question 1

Primary sources of tax law include
I)Treasury Regulations.
II)IRS Revenue Procedures.
III)Internal Revenue Code of 1986.
IV)The Tax Law Review.
​

A)Only statement III is correct.
B)Statements II and III are correct.
C)Only statement I is correct.
D)Statements I, II, and III are correct.
E)Statements I, II, III, and IV are correct.

Answer 1

D

Question 2

Which of the following is (are) primary sources of tax law?
I)Joint Conference Committee Reports.
II)Journal of Taxation.
III)Revenue Procedures.
IV)Tax Treaty with France.
V)U.S. Tax Court Memorandum Decisions.
​

A)Only statement IV is correct.
B)Only statement I is correct.
C)Statements II and III are correct.
D)Statements I, III, IV, and V are correct.
E)Statements I, II, III, IV, and V are correct.

Answer 2

D

Question 3

Tax planning refers to the preparation of tax returns and doing research on completed transactions.

Answer 3

False

Question 4

The final step in the tax research process is to reach a conclusion, make a recommendation and communicate the results to the client.

Question 5

Which of the following is (are) secondary sources of tax law?
I)Joint Conference Committee Reports.
II)Journal of Taxation
III)Revenue Procedures.
IV)Tax Treaty with France.
V)U.S. Tax Court Memorandum Decisions.
​

A)Only statement IV is correct.
B)Only statement II is correct.
C)Statements II and III are correct.
D)Statements I, II, III, and V are correct.
E)Statements I, II, III, IV, and V are correct.

Question 6

Secondary sources of tax law include
I)Internal Revenue Code of 1986.
II)United States Tax Reporter (RIA)
III)Taxes: The Tax Magazine.
IV)Tax Court Memo Decision.
​

A)Only statement III is correct.
B)Statements II and III are correct.
C)Only statement I is correct.
D)Statements I, II, and III are correct.
E)Statements I, II, III, and IV are correct.

Question 7

Tax articles in law review journals are primary sources of federal income tax law.

Question 8

The Tax Court will not necessarily follow a U.S. Court of Appeal decision unless the taxpayer lives in the geographic jurisdiction of the appellate court.

Question 9

Search engines used in computer-assisted tax research tools provide advantages over manual searches.

Question 10

The National Office of the IRS issues private letter rulings and technical advice memoranda and these pronouncements are binding on the IRS.

Question 11

A tax treaty with a foreign country negotiated by the president is considered a legislative source of tax law.

Question 12

Title 26 of the United States Code is commonly referred to as the Internal Revenue Code.

Question 13

After a tax bill has been enacted, the House Ways and Means committee prepares a general explanation of the bill as approved by the president.

Question 14

Citators provide the full text of court decisions.

Question 15

All judicial citations follow the same format: case name, volume number of the reporter in which the case is published, name of the reporter, and the page of the reporter on which the case begins.

Question 16

When the Supreme Court grants a writ of certiorari, they are agreeing to review a lower court's decision.

Question 17

If the IRS loses a case in a court proceeding, they may issue an acquiescence that means they will not follow the decision in similar cases.

Question 18

The first step in tax research is to locate the relevant legal authorities.

Question 19

Which of the following statements pertaining to tax law is true?
I)A tax textbook is considered a primary source.
II)Secondary sources help locate and interpret primary sources.
III)Primary sources emanate from the three branches of the federal government.
IV)An article in a law journal written by a former commissioner of the Internal Revenue Service is considered a secondary source of tax law.
​

A)Only statement I is correct.
B)Statements I and II are correct.
C)Statements I, II, and III are correct.
D)Statements II, III, and IV are correct.
E)Statements I, II, III, and IV are correct.

Question 20

An interpretative regulation is issued when Congress specifically delegates the authority to the Treasury Department to write specific rules for a designated Code section.

Question 21

The acquiescence policy of the IRS extends to

A)the U.S. Tax Court
B)the U.S. District Court
C)the U.S. Circuit Court of Appeals
D)All of the above

Question 22

The most important source of current federal income tax law is the

A)Internal Revenue Code of 1986, as amended.
B)IRS.
C)U.S. Supreme Court.
D)U.S. Tax Court.

Question 23

What body has jurisdiction over all tax matters and is responsible for initiating tax legislation?

A)Joint Conference Committee.
B)Joint Committee on Taxation.
C)House Ways and Means Committee.
D)Judiciary Committee.
E)Senate Finance Committee.

Question 24

Which of the following Administrative sources has the highest level of authority?

A)Revenue Ruling
B)Nonacquiescence
C)Treasury Regulation
D)General Counsel Memorandum
E)Private Letter Ruling

Question 25

Which of the following statements concerning the Internal Revenue Code is true?
I)The most current tax laws may be found in the Internal Revenue Code of 2016.
II)A tax treaty may override the Code.
III)The most common references to a particular part of the Code are to a section.
IV)The Internal Revenue Code is considered a secondary source of tax law.
​

A)Statements I and II are correct.
B)Statements I and III are correct.
C)Statements II and III are correct.
D)Statements II and IV are correct.
E)Only II is correct.

Question 26

Title 26 of the U.S. Code includes

A)Alcohol and tobacco tax legislation only.
B)Gift tax and estate tax legislation only.
C)Income Tax legislation only.
D)Self employment tax legislation only.
E)All of the tax legislation mentioned above.

Question 27

Which of the following is true of revenue rulings?

A)Lower courts are bound by them.
B)They are a subset of Treasury Regulations.
C)Once affirmed by an appellate court, they have the force of law.
D)Although they represent the official policy of the IRS, courts may overrule them.
E)All of the above.

Question 28

What body prepares a compromise version of tax legislation when the House and Senate versions are not in agreement?

A)Arbitration Committee.
B)Joint Committee on Taxation.
C)House Ways and Means Committee.
D)Judiciary Committee.
E)Joint Conference Committee.

Question 29

Tax regulations are first issued in

A)Proposed form
B)Revised form
C)Temporary form
D)Final form
E)Either A or C

Question 30

The Internal Revenue Service is a branch of

A)Congress
B)The Secret Service
C)The Federal Reserve Bank
D)The Treasury Department
E)The Federal Bureau of Investigation

Question 31

Title 26 of the U.S. Code includes
I)Bankruptcy legislation.
II)Employment tax legislation.
III)Estate and Gift tax legislation.
IV)Alcohol and Tobacco tax legislation.
​

A)Only statement II is correct.
B)Statements II and III are correct.
C)Statements II, III, and IV are correct.
D)Statements I, II, III, and IV are correct.
E)None of the above are in Title 26.

Question 32

Which of the following is generally accorded the highest level of authority?

A)Private Letter Ruling.
B)A legislative regulation.
C)Revenue Ruling.
D)Decisions of a U.S. District Court.
E)Internal Revenue Bulletin.

Question 33

Which of the following statements pertaining to acquiescence and nonacquiescence is not true?

A)Acquiescence means the IRS will follow the decision of the court in cases.
B)An announcement of nonacquiescence would prevent a taxpayer with similar circumstances from following that court decision.
C)The IRS may issue an acquiescence or nonacquiescence to opinions of the Tax Court and other federal court decisions.
D)An announcement of acquiescence may be withdrawn, modified or reversed.

Question 34

Which of the following authorities can help the taxpayer interpret a new tax law soon (i.e. during the first few months) after it becomes law?

A)Treasury Regulations.
B)Committee Reports.
C)Revenue Rulings.
D)Internal Revenue Code.
E)Court Cases.

Question 35

What body oversees the operation and administration of the tax system as a whole, and prepares a general explanation of any tax bill signed by the president?

A)Joint Conference Committee.
B)Joint Committee on Taxation.
C)House Ways and Means Committee.
D)Judiciary Committee.
E)Senate Finance Committee.

Question 36

Which of the following sources of tax law authority has the highest tax validity?

A)Cumulative Bulletin.
B)Tax Court Decision.
C)Revenue Ruling.
D)Internal Revenue Code Section.
E)Regulation Section.

Question 37

If the House and the Senate both approve similar but not identical tax bills, any differences between the two pieces of legislation are resolved by the

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

Question 38

The IRS may acquiesce or nonacquiesce to decisions from which of the following courts:

A)U.S. Tax Court.
B)U.S. District Court.
C)U.S. Court of Appeals.
D)U.S. Court of Federal Claims.
E)All of the above.

Question 39

During the legislative process, several groups of lawmakers become part of the system. Those groups include the
I)House Ways and Means Committee
II)Joint Conference Committee
III)U.S. Supreme Court
IV)Joint Committee on Taxation
V)U.S. Senate
​

A)Statements II and III are correct.
B)Statements I, IV, and V are correct.
C)Statements I, II, and V are correct.
D)Only statement I is correct.
E)Only statement V is correct.

Question 40

After major legislation is enacted, a general explanation of the law or "blue book" may be issued by which of the following:

A)House Ways and Means Committee.
B)Joint Committee on Taxation.
C)Treasury Department
D)Senate Finance Committee.

Question 41

Which of the following courts is a trial court for tax cases?

A)U.S. Supreme Court.
B)U.S. District Court.
C)U.S. Court of Appeals.
D)U.S. Court of Appeals for the Federal Circuit.

Question 42

Taxpayers need to pay the tax deficiency in advance and sue for a refund in
I)U.S. Tax Court.
II)U.S. District Court.
III)U.S. Court of Federal Claims.
​

A)Only statement I is correct.
B)Only statement II is correct.
C)Only statement III is correct.
D)Statements II and III are correct.
E)Statements I, II, and III are correct.

Question 43

Which regulation deals with Code Section 170?

A)Reg. Sec. 1.170-5
B)Reg. Sec. 170.162-5
C)Reg. Sec. 1.5-170
D)Reg. Sec. 170
E)Reg. Sec. 170.25-5

Question 44

A nonacquiescence

A)is issued when the IRS wins a court case.
B)is issued by the Joint Committee on Taxation.
C)means that the IRS disagrees with a decision of the court.
D)means that the IRS will follow the decision in similar situations.

Question 45

The Tax Court strictly follows the precedent of prior decisions of the Court of Appeals for a particular circuit when

A)the taxpayer requests it to do so.
B)the IRS requests it to do so.
C)the taxpayer resides in the United States.
D)the taxpayer resides in that circuit.

Question 46

Tara does not agree with a proposed deficiency of additional tax resulting from an examination of her individual income tax return. She has not been able to satisfactorily resolve her case within the administrative processes of the Internal Revenue Service. Which of the following courts may she petition without first making payment of the contested deficiency?

A)United States Tax Court.
B)United States District Court.
C)U.S. Court of Federal Claims.
D)Any of the above.

Question 47

Which of the following is a characteristic of U.S. District Courts?

A)A District Court is a national court that hears cases from taxpayers anywhere in the U.S.
B)The District Court judges are tax specialists who hear only tax cases.
C)A taxpayer need not pay any alleged deficiency in order to bring an action against the IRS.
D)The taxpayer may obtain a jury trial; the jury decides matters of fact but not matters of law.

Question 48

Which of the following regulations deals with Estate Tax?

A)Reg. Sec. 1.165-1
B)Reg. Sec. 20.2014-5
C)Reg. Sec. 25.2518-5
D)Reg. Sec. 301.7002-5

Question 49

If the U.S. Supreme Court denies a writ of certiorari, it means
I)The court did not feel the case was important enough to review.
II)The decision of the lower court is correct.
III)The decision of the circuit court of appeals is effectively reversed.
IV)The Supreme Court has agreed to hear the case.
​

A)Only statement I is correct.
B)Statements I and II are correct.
C)Statements II and IV are correct.
D)Only statement III is correct.
E)Statements I, III, and IV are correct.

Question 50

Which of the following is/ are appellate level courts for tax cases?
I)U.S. Court of Federal Claims.
II)U.S. Supreme Court.
III)U.S. Court of Appeals for the Federal Circuit.
IV)U.S. Court of Appeals for the Tenth Circuit.
V)U.S. District Court.
​

A)Only statement V is correct.
B)Only statement II is correct.
C)Statements I and V are correct.
D)Statements II, III, and IV are correct.
E)Statements I, II, III, IV, and V are correct.

Question 51

A taxpayer who loses in the U.S. Tax Court may appeal directly to the:

A)Supreme Court.
B)U.S. Court of Federal Claims.
C)U.S. District Court.
D)U.S. Circuit Court of Appeals.
E)Any of the above.

Question 52

The court that a taxpayer may not select for trial is

A)the Tax Court.
B)the U.S. Claims Court.
C)the U.S. District Court.
D)the U.S. Court of Appeals.

Question 53

A disadvantage of electing to use the small claims division of the Tax Court is that

A)it is a more formal proceeding.
B)the decision is final and can not be appealed.
C)it tends to be more expensive.
D)it can cause many delays.
E)All of the above.

Question 54

Which of the following is not true of the Supreme Court's appellate jurisdiction?

A)All appealed cases can reach the Supreme Court through the Writ of Certiorari and be heard at that level.
B)Review by the Supreme Court is almost entirely discretionary.
C)For most taxpayers, the final review is at the Court of Appeals level because the Supreme Court does not hear many tax cases.
D)The Supreme Court's decision not to grant a Writ of Certiorari means that the decision of the lower court still stands.

Question 55

Which regulation citation concerns Code Section 469?

A)Reg. Sec. 469
B)Reg. Sec. 469-3
C)Reg. Sec. 1.3-469
D)Reg. Sec. 1.469-3
E)Reg. Sec. 469.72-3

Question 56

Taxpayers may elect to use the small claims division of the U.S. Tax Court if the amount of tax in dispute is less than

A)$1,000
B)$2,500
C)$5,000
D)$10,000
E)$50,000

Question 57

Which of the following regulations deals with Income Tax?

A)Reg. Sec. 1.165-1
B)Reg. Sec. 20.2014-5
C)Reg. Sec. 25.2518-5
D)Reg. Sec. 301.7002-5

Question 58

Which of the following types of cases are subject to the Chief Counsel's Acquiescence / Non -acquiescence Policy?

A)Circuit Court Decisions.
B)District Court Decisions.
C)U.S. Court of Federal Claims.
D)Tax Court Regular Decisions.
E)All of the above are correct.

Question 59

Which of the following is/ are trial level courts for tax cases?
I)U.S. Court of Federal Claims.
II)U.S. Supreme Court.
III)U.S. Court of Appeals for the Federal Circuit.
IV)U.S. Court of Appeals for the Tenth Circuit.
V)U.S. District Court.
​

A)Only statement V is correct.
B)Only statement II is correct.
C)Statements I and V are correct.
D)Statements II, III, and IV are correct.
E)Statements I, II, III, IV, and V are correct.

Question 60

The initial appeal from the U.S. Court of Federal Claims is to the

A)U.S. District Court.
B)U.S. Tax Court.
C)U.S. Supreme Court.
D)U.S. Court of Appeals for the Federal Circuit.

Question 61

Which of the following is (are) secondary sources of tax law?
I)Tax Notes.
II)LEXIS.
III)RIA Federal Tax Citator.
IV)Tax Court Memorandum.
​

A)Statements I, II, and III are correct.
B)Statements I and II are correct.
C)Statements II and IV are correct.
D)Only statement IV is correct.
E)Only statement III is correct.

Question 62

Which of the following Letter Rulings might have been issued on January 3, 1991?

A)PLR 9103001
B)PLR 9110303
C)PLR 9101027
D)All of the above

Question 63

Which of the following is (are) secondary sources of tax law?
I)Revenue Ruling.
II)The Tax Adviser.
III)Murphy and Higgins' Concepts in Federal Taxation.
IV)Tax Treaty with Denmark.
​

A)Statements I, II, and III are correct.
B)Statements I and II are correct.
C)Statements II and III are correct.
D)Only statement IV is correct.
E)Only statement III is correct.

Question 64

Match the primary source to its reporter.
a.Tax Court Reports
b.United States Tax Cases
c.Internal Revenue Code
d.Cumulative Bulletin
e.Not a primary source
Tax statute

Question 65

All of the following are advantages of computer-assisted tax research (CATR), except

A)CATR sources use search engines that allow quick retrieval of sources.
B)CATR sources are available on the Internet.
C)CATR sources contain only secondary sources of tax law.
D)CATR sources require less space and maintenance than print services.

Question 66

All of the following citations are to trial court decisions except:

A)George E. Jones, 21 B.T.A. 431 (1940)
B)Harper Smith, 577 F.2d 212 (CA-3, 1978)
C)George F. Dowell v. U.S. 370 F.Supp. 69 (D. Ct. Tx. 1974)
D)Raymond R. Windle, 65 T.C. 694 (1976)
E)Jerome Prizant, 30 TCM 817 (1971)

Question 67

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

A)35 T.C. 1083
B)93-1 USTC 9865
C)39 AFTR 2d 77-640
D)All of the above could refer to a regular decision of the Tax Court

Question 68

How should the following citation be interpreted? Hewlett Packard Co. v. Comm., 67 T.C. 736 (1975).

A)A 1967 decision of the Tax Court, found on page 736.
B)A decision of the Court of Claims, found in Volume 67, on page 736.
C)A 1975 decision of the Tax Court, found in Volume 736.
D)A decision of the Tax Court, found on page 736, in Volume 67.

Question 69

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

A)247 F.Supp. 1519
B)49 TCM 769
C)54 TC 1873
D)531 F.2d 1165
E)1987-2 CB 674

Question 70

Match the primary source to its reporter.
a.Tax Court Reports
b.United States Tax Cases
c.Internal Revenue Code
d.Cumulative Bulletin
e.Not a primary source
Journal of Taxation

Question 71

Match the primary source to its reporter.
a.Tax Court Reports
b.United States Tax Cases
c.Internal Revenue Code
d.Cumulative Bulletin
e.Not a primary source
Regular Tax Court decision

Question 72

During the past week, Dennis contacted his CPA to obtain advice on the most advantageous way to make a generous contribution to the accounting program at his alma mater. The CPA's work is

A)A tax planning situation.
B)A tax compliance situation.
C)A closed-fact situation.
D)A mediation situation.
E)An unknown-fact situation.

Question 73

When posed with a particularly complex tax question, a researcher with little previous experience with the issue would be best served at the outset by consulting:

A)the applicable legislative history.
B)the Treasury Regulations.
C)the Internal Revenue Code.
D)a "tax service" (e.g. CCH, RIA).

Question 74

Match the primary source to its reporter.
a.Tax Court Reports
b.United States Tax Cases
c.Internal Revenue Code
d.Cumulative Bulletin
e.Not a primary source
Appeals Court decision

Question 75

Which of the following is a permanent citation?
I)Rev. Proc. 84-33, 1984-1 C.B. 134.
II)Rev. Rul. 92-83, I.R.B. No. 14, 6.
III)O'Neil v. Comm., 44 TCM 843 (1989).
IV)Prop. Reg. Sec. 1.283-4(c).
​

A)Only statement I is correct.
B)Statements I, II, and IV are correct.
C)Statements I and III are correct.
D)Statements II and III are correct.
E)Statements I, II, III, and IV are correct.

Question 76

Match the primary source to its reporter.
a.Tax Court Reports
b.United States Tax Cases
c.Internal Revenue Code
d.Cumulative Bulletin
e.Not a primary source
Revenue Ruling 86-457

Question 77

Which of the following statements is correct?
I)The history of a cited case refers to all other decisions by higher or lower courts in the same case.
II)The citator gives information about how the decision of a cited case has been interpreted by other courts.
​

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question 78

Which of the following are numbered to match the Code section to which they are related?

A)Private Letter Rulings.
B)Revenue Rulings.
C)Treasury Regulations.
D)All of the above.

Question 79

In planning situations, tax research is undertaken
I)To always attempt to minimize taxes.
II)Considering the client's nontax objectives.
III)To find the best way to accomplish a desired result.
IV)Considering the client's tax objectives.
​

A)Only statement I is correct.
B)Only statement IV is correct.
C)Statements II and III are correct.
D)Statements II, III, and IV are correct.
E)Statements I, II, III, and IV are correct.

Question 80

Citators

A)are primary authorities.
B)are not necessary for effective tax research.
C)refer to the case being evaluated as the citing case.
D)give information on the history of a court case.