Deck 5: Tax Research

Question 1

Effective tax research often omits the first two steps of the tax research process.  

Answer 1

False

Question 2

A research memorandum is typically less detailed than a client letter in terms of discussing supporting legal authorities.  

Answer 2

False

Question 3

Tax judicial decisions each have a single, unique citation.  

Answer 3

False

Question 4

Experienced tax professionals generally can answer most tax questions without the need for tax research. 

Question 5

The results of the tax research process should be documented in a research memo, in a letter to the client, or both. 

Question 6

In circumstances requiring an evaluative judgment, the tax researcher can provide a definitive answer to the research question. 

Question 7

Novice tax researchers tend to examine less material in the course of a tax research project than experienced tax researchers. 

Question 8

Tax research may occur as part of tax compliance or tax planning.  

Question 9

If a trial court decision has been appealed and the appellate court reversed the trial court's decision, the trial court decision is considered authoritative. 

Question 10

Private letter rulings and technical advice memoranda are primary authority for those taxpayers to whom they were issued.  

Question 11

A single tax issue may result in multiple research questions.  

Question 12

The first step in the tax research process is to locate relevant tax law authority.  

Question 13

The final step in the tax research process is to document and communicate research conclusions.  

Question 14

Step 4 of the tax research process is to repeat steps 1 through 3 as many times as necessary.  

Question 15

In the citation Rev. Proc. 2002-32, 2002-1 C.B. 959, the abbreviation C.B. refers to Congressional Bulletin.  

Question 16

Tax research typically occurs as part of the tax compliance process; it is rarely important in tax planning.  

Question 17

Private letter rulings are authoritative only for the specific taxpayer to whom they are issued and cannot be relied on as authority by any other taxpayer.  

Question 18

Technical advice memoranda are considered primary authority for any taxpayer in a similar tax situation.  

Question 19

Professional tax research conclusions should always be based on relevant secondary authority.  

Question 20

Editorial explanations provided by electronic tax services are examples of secondary authority.  

Question 21

A taxpayer who loses a case in the U.S. Tax Court may appeal the case directly to the U.S. Supreme Court. 

Question 22

Secondary authorities explain and interpret the tax law in language often easier to understand than that of primary authorities.  

Question 23

Tax services are typically organized either topically or by Code section.  

Question 24

Revenue procedures are a type of secondary authority.  

Question 25

Secondary authorities are typically used only by novice researchers in searching for answers to tax questions.  

Question 26

Which of the following is not one of the six steps in the tax research process?  

A) Understand the client's transaction and ascertain the facts.
B) Locate relevant tax law authority.
C) Analyze relevant authority and answer the research questions.
D) All of the above are steps in the tax research process.

Question 27

Secondary authorities should always be cited when documenting tax research conclusions.  

Question 28

Which of the following statements regarding the tax research process is true? 

A) Before a researcher can analyze the tax consequences of a transaction, he or she must thoroughly understand the transaction.
B) Tax research is often conducted as part of both tax compliance and tax planning activities.
C) Tax research is a critical skill for the tax practitioner.
D) All of the above statements are true.

Question 29

Editorial explanations found within a tax service are a type of primary authority.  

Question 30

Which of the following is not one of the six steps in the tax research process?  

A) Identify the tax issues, problems, or opportunities suggested by the facts and formulate specific research questions.
B) Consult a commercial tax service to identify potential legal authorities.
C) Analyze relevant authority and answer the research questions.
D) Document your research and communicate your conclusions.

Question 31

Revenue rulings are an example of administrative authority.  

Question 32

When the Supreme Court denies certiorari, the decision of the appellate court is final.  

Question 33

A Citator may be used to determine the status of tax judicial decisions, revenue rulings, and revenue procedures. 

Question 34

A revenue ruling cannot be relied on as authority by any taxpayer other than the taxpayer for whom the ruling was issued.  

Question 35

The topical index of a commercial tax service is considered primary authority.  

Question 36

Treasury regulations are considered statutory authority.  

Question 37

Secondary authorities organize information about primary authorities in a manner that facilitates tax research.  

Question 38

The Citator is a rarely used, unimportant source of information about the status of judicial and administrative tax decisions.  

Question 39

What is the first step in the tax research process?  

A) Discover all the facts relevant to the taxpayer's transaction.
B) Decide which tax library to use.
C) Decide whether to read primary or secondary authority.
D) Formulate a precise research question.

Question 40

The Internal Revenue Code is the primary source of statutory authority for federal income tax law.  

Question 41

When performing step one of the tax research process:  

A) The researcher generally can assume that the client's initial summary of the transaction is factually accurate and complete.
B) The researcher must take into account the level of the client's tax knowledge.
C) The client's motivation in undertaking the transaction is generally irrelevant.
D) The researcher should presume that the client has some knowledge of the tax law.

Question 42

Which of the following is not generally included in a tax research memorandum?  

A) A statement of the pertinent facts
B) An analysis of the relevant sources of authority
C) The details of any advice given to the client as part of the research engagement
D) A bill for fees charged to the client for the research engagement

Question 43

When analyzing relevant legal authority:  

A) The researcher is finished only when an unambiguous answer to the research question has been located.
B) Different sources of authority may provide conflicting answers.
C) Interpretation and judgment on the part of the researcher is rarely required.
D) The researcher should never give an unqualified answer to any research question.

Question 44

Which of the following statements regarding documentation of research conclusions is false? 

A) A research memorandum is a permanent record of the research process.
B) A researcher communicates his or her conclusions to the client in a letter containing information similar to that in the research memorandum.
C) Technical references are generally inappropriate in a client letter.
D) A research memorandum contains only research conclusions and not a detailed analysis of legal authorities supporting those conclusions.

Question 45

Which of the following is not primary authority on which to base research conclusions?  

A) Journal of Taxation article written by a professor.
B) Revenue ruling.
C) U.S. Tax Court decision.
D) U.S. Supreme Court decision.

Question 46

When performing step two of the tax research process:  

A) The identification of tax issues precedes the formulation of research questions.
B) Research questions should be as broadly stated as possible.
C) Each tax issue is always associated with a single research question.
D) The order in which research questions are addressed is irrelevant.

Question 47

Which of the following is a proper citation to a revenue ruling? 

A) Revenue Ruling 2004-33
B) RR 2004-33
C) Rev. Rul. 2006-33, 2004-1 C.B. 628
D) All of the above are proper forms for citing a Revenue Ruling

Question 48

Which of the following statements does not accurately describe the tax research process?  

A) A researcher may begin with any of the six steps in the process.
B) The process is not linear because the researcher may have to repeat one or more of the steps before concluding the research.
C) If a set of facts suggests multiple research questions, the researcher must decide on the order in which the questions should be answered.
D) The last step in the process requires preparation of a written summary that communicates the researcher's conclusions.

Question 49

When analyzing tax authorities, the researcher must decide if the authority requires a factual judgment or an evaluative judgment. The difference between the two can be described as follows:  

A) In making an evaluative judgment, the researcher can provide a definitive answer to the research question.
B) In making a factual judgment, the authority may be subject to interpretation.
C) In making an evaluative judgment, the researcher must draw a subjective conclusion that results in a qualified answer.
D) There is little difference between a factual judgment and an evaluative judgment.

Question 50

Which of the following is not a proper citation to an Internal Revenue Code section?  

A) IRC 1001
B) Sec. 1001
C) Section 1001
D) §1001

Question 51

Which of the following is not primary authority on which to base tax research conclusions?  

A) U.S. District Court decision
B) Editorial in the Wall Street Journal
C) U.S. Court of Federal Claims decision
D) Revenue procedure

Question 52

Which of the following is primary authority on which to base research conclusions?  

A) This textbook
B) An editorial explanation in a commercial tax service
C) A Treasury regulation
D) A treatise written by a tax attorney and published in a legal journal

Question 53

Which of the following is not a citation to a primary authority? 

A) Sec. 1245
B) Lengsfield v. Comm., 50 AFTR 1683 (CA-5, 1957)
C) M-5800 Activities Not Engaged in for Profit - Hobby Losses
D) Rev. Proc. 2002-32, 2002-1 C.B. 959

Question 54

Based on the citation Rev. Rul. 89-157, 1989-1 C.B. 221:  

A) This revenue ruling was issued in 1989.
B) This revenue ruling is no longer valid.
C) The abbreviation C.B. stands for Comprehensive Bulletin.
D) This revenue ruling appears on page 157.

Question 55

Step five of the tax research process: 

A) Is typically performed only by novice researchers.
B) Is required only if the researcher has made a careless mistake in a previous step.
C) Should only be taken once.
D) Is necessary when the researcher determines that additional facts are needed to complete the analysis of the transaction.

Question 56

Which of the following is not one of the three sources of authority that comprise the federal tax law?  

A) Statutory authority
B) Secondary authority
C) Administrative authority
D) Judicial authority

Question 57

When performing step three of the tax research process:  

A) A commercial tax service may provide an excellent starting point.
B) The researcher must discover all the facts concerning the client's transaction.
C) The researcher must communicate his or her conclusions to the client.
D) The researcher should always consult primary authorities first before turning to secondary authorities for guidance.

Question 58

Which of the following is not a primary authority? 

A) Section 465 of the Internal Revenue Code
B) Munro v. Comm., 267 F.3d 1918 (CA-8, 2004)
C) CCH Master Tax Guide
D) All of the above are primary authorities.

Question 59

Which of the following is not a proper citation to a Treasury regulation? 

A) Reg. Sec. 1.61-1(a)
B) Reg. 1.61-1(a)
C) Reg. §1.61-1(a)
D) Treasury Regulation 61-1(a)

Question 60

Which of the following is not administrative authority?  

A) The Internal Revenue Code
B) Treasury regulations
C) Revenue rulings
D) Revenue procedures

Question 61

In locating relevant authorities:  

A) Only a novice researcher will use secondary authorities as a guide.
B) Experienced researchers always conduct their search in exactly the same way for every research project.
C) Tax researchers may consult more than one tax service.
D) Skilled researchers usually consult a broader range of library materials than novice researchers.

Question 62

Which of the following is not a typical strategy for using a commercial tax service?  

A) Using the topical index
B) Using the table of contents
C) In an electronic service, using a keyword search
D) All of the above are typical strategies for using a commercial tax service.

Question 63

Which of the following statements regarding secondary authorities is true? 

A) Most secondary authorities are published by the federal government.
B) Secondary authorities should never be cited as the authority for final research conclusions.
C) Secondary authorities should always cite primary authority to support conclusions about the application of the tax law.
D) None of the above statements is true

Question 64

Alex inherited an antique diamond bracelet from her grandmother. She is thinking of selling the bracelet to raise cash for her college tuition and wonders about the tax consequences of such a sale. If you were to research this question using a keyword search in an electronic library, what keywords would you use? Propose three distinct keyword searches. 

Question 65

Which of the following is not a primary authority?  

A) Internal Revenue Code
B) Treasury regulations
C) Revenue Procedure
D) Tax textbook

Question 66

Using an electronic research database such as Checkpoint, CCH Tax Research NetWork, or Lexis-Nexis, perform a keyword search that includes the phrase business expense and the keyword charity. Include both primary sources and editorial materials in your search.
a. How many documents did your search retrieve?
b. How many documents are primary authorities and how many are secondary authorities?
c. Provide citations to two primary authorities and two secondary authorities.

Question 67

Which of the following is not a commercial tax service?  

A) RIA Federal Tax Coordinator 2d
B) CCH Federal Tax Services
C) BNA Tax Management Portfolios
D) Cumulative Bulletin

Question 68

Which of the following primary authorities is least likely to provide a detailed description of facts to which a researcher can compare his or her client's fact pattern?  

A) Internal Revenue Code section
B) Treasury regulation
C) Revenue ruling
D) Tax Court decision

Question 69

Which of the following statements regarding secondary authorities is false?  

A) In paper format, commercial tax services are organized either topically or by Code section.
B) Commercial tax services provide legislative history of each Internal Revenue Code section.
C) Only topically-organized commercial tax services provide a detailed topical index.
D) The organization and content of the major topically-oriented services differs considerably.

Question 70

The use of secondary authorities might be appropriate as part of which step in the research process?

A) Understand the client's transaction and ascertain the facts
B) Identify the tax issues, problems, or opportunities suggested by the facts and formulate specific research questions
C) Locate relevant tax law authority
D) Document your research and communicate your conclusions

Question 71

A citator:  

A) Is not an important tax research resource.
B) May be used to determine the status of tax judicial decisions, revenue rulings, and revenue procedures.
C) Is published by the federal government.
D) Provides an editorial explanation of tax judicial decisions.

Question 72

Which of the following statements regarding strategies to locate relevant authority is true?  

A) Novice researchers tend to examine fewer materials during the research process than experienced researchers.
B) In an electronic tax service, keyword searching allows the researcher to combine words and phrases to target the search.
C) Keyword searches should be defined as narrowly as possible to maximize efficiencies in the search process.
D) All of the above are true statements.

Question 73

The U.S. Supreme Court: 

A) Typically hears hundreds of tax cases each year.
B) May deny certiorari for a tax case because the court believes that the case involves a significant principle of law.
C) May grant certiorari for a tax case because two or more appellate courts have rendered conflicting opinions on the proper resolution of a tax issue.
D) Does not hear cases on tax issues.

Question 74

Which of the following statements regarding commercial tax services is false?  

A) Commercial tax services explain and interpret the tax law.
B) Commercial tax services organize information about primary authorities in a manner that facilitates tax research.
C) Commercial tax services contain both primary authority and secondary authority.
D) Consulting a commercial tax service is typically the final step rather than a preliminary step in the tax research process.

Question 75

A keyword search using an electronic database is part of which step in the research process?  

A) Understand the client's transaction and ascertain the facts
B) Identify the tax issues, problems, or opportunities suggested by the facts and formulate specific research questions
C) Locate relevant tax law authority
D) Analyze relevant authority and answer the research questions

Question 76

Which of the following statements regarding administrative authorities is false?  

A) Private letter rulings are considered authoritative only for the taxpayer to whom they were issued.
B) A technical advice memorandum is requested by a revenue agent or appeals officer during the examination or appeal of a taxpayer's return.
C) Revenue procedures are considered secondary authority.
D) Private letter rulings can only be obtained for a fee from the IRS.

Question 77

Which of the following is not a secondary authority?  

A) Tax Court Memorandum decision
B) BNA Tax Management Portfolio
C) United States Tax Reporter
D) All of the above are secondary authorities

Question 78

A keyword search in an electronic tax service:  

A) Allows the researcher to combine words and phrases to define the search.
B) Is identical to using the topical index in a paper service.
C) Is not an efficient way to conduct tax research.
D) Cannot be restricted to only a part or portion of the data base.

Question 79

Which of the following is not a secondary authority?  

A) Tax textbook
B) Commercial tax service
C) Tax professional journal
D) Revenue procedure

Question 80

The advantages of electronic tax research libraries do not include:  

A) The ease with which such libraries can be updated for new developments.
B) Portability.
C) Speed of access and search.
D) All of the above are advantages of electronic tax research libraries.