Deck 1: Understanding and Working With the Federal Tax Law

Question 1

Revenue neutrality means that any one taxpayer's tax liability remains the same.

Answer 1

False

Question 2

Subchapter C refers to the "Corporate Distributions and Adjustments" section of the Code.

Answer 2

True

Question 3

Subchapter P refers to the "Partners and Partnerships" section of the Code.

Answer 3

False

Question 4

The lowering of tax rates will lead to lower taxes and will achieve revenue neutrality.

Question 5

Neither the 1939 nor the 1954 Code substantially changed all the tax law existing on the date of its enactment.

Question 6

A major,but not the sole,objective of the tax laws is to raise revenue.

Question 7

Temporary Regulations have the same authoritative value as Finalized Regulations for 3 years.

Question 8

The corporate tax rates are structured so as to favor small business.

Question 9

Federal tax legislation generally originates in the House Ways and Means Committee.

Question 10

The American Opportunity scholarship credit can be justified by economic considerations.

Question 11

The deduction for charitable contributions can be explained by social considerations.

Question 12

Shorter asset lives and accelerated methods increase the tax incentive for capital outlays.

Question 13

The adoption tax credit can be explained by social considerations.

Question 14

Allowing a taxpayer to claim either a credit or a deduction for foreign taxes paid can be explained by equity considerations.

Question 15

There are two forms of fiscal policy: discretionary and automatic.

Question 16

Proposed Regulations have the force and effect of law.

Question 17

The Internal Revenue Code appears in Title 26 of the U.S.Code.

Question 18

Some Regulations are arranged in different sequence than the Code.

Question 19

The refundable earned income tax credit is explained by economic considerations (i.e. ,the need to create additional jobs).

Question 20

The desire to foster technological progress helps explain the favorable tax treatment accorded research and development expenditures.

Question 21

Revenue Rulings carry the same legal force and effect as Regulations.

Question 22

Appeals from the Court of Federal Claims go to the U.S.Supreme Court.

Question 23

A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S.District Court.

Question 24

A district court must abide by the precedents set by the court of appeals of jurisdiction.

Question 25

The Golsen rule has been overturned.

Question 26

What is the overall objective of the write-off of research and development expenditures?

A)Encouragement of certain activities.
B)Control of economy.
C)Encouragement of certain industries.
D)None of the above.

Question 27

Which is the major objective of our Federal tax laws?

A)Economic factors.
B)Social reasons.
C)Equity factors.
D)Raising revenue.
E)Political reasons.

Question 28

Treasury Decisions are issued by the Treasury Department to promulgate new Regulations.

Question 29

Unlike determination letters,letter rulings are issued by the National Office of the IRS.

Question 30

Regulations are issued by the Treasury Department.

Question 31

When there is a direct conflict between a Code section and a treaty provision,the most recent item takes precedence.

Question 32

A Revenue Ruling is a legislative source of Federal tax law.

Question 33

Determination letters usually involve proposed transactions.

Question 34

Proposed Regulations are published in the Federal Register.

Question 35

Only one judge hears a trial in a U.S.District Court.

Question 36

"Legislative regulations" are stronger than "interpretative" regulations.

Question 37

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

Question 38

Near the end of 2011,the national debt per person was approximately:

A)$15,200.
B)$21,700.
C)$32,750.
D)$47,000.
E)$62,800.

Question 39

A jury trial is available in a court of appeals situation.

Question 40

In a U.S.District Court,a jury can decide both questions of fact and questions of law.

Question 41

Which state is a community property state?

A)North Carolina.
B)California.
C)Vermont.
D)Florida.
E)All of the above.

Question 42

Which citation is considered to be a legislative citation?

A)Ltr.Rul.199952058.
B)Ann.94-5,1994-2 I.R.B.39.
C)Reg.§ 1.1014-1(c)(1).
D)§ 351.
E)None of the above.

Question 43

The Golsen doctrine applies to which court?

A)U.S.Tax Court.
B)U.S.District Court.
C)U.S.Court of Federal Claims.
D)U.S.Supreme Court.
E)Some other court.

Question 44

Which trial court decision is generally less authoritative?

A)U.S.District Court.
B)U.S.Tax Court.
C)U.S.Court of Federal Claims.
D)Small Cases Division of the Tax Court.
E)All of the above are the same.

Question 45

A technical advice memorandum is issued by:

A)Treasury Department.
B)National Office of the IRS.
C)Office of Chief Council.
D)Area Director.
E)None of the above.

Question 46

Which,if any,of the provisions in the tax law below do not mitigate the effects of the annual accounting period concept?

A)Post year-end contribution to retirement plans for a self-employed person.
B)Carrybacks of net operating losses.
C)Installment sales treatment.
D)Carryovers of excess charitable contributions.
E)The arm's length concept.

Question 47

Which of the following sources has the highest tax validity?

A)Treasury Regulation.
B)Revenue Procedure.
C)Internal Revenue Code.
D)Temporary Regulation.
E)All have same weight.

Question 48

Which,if any,of the provisions in the tax law enumerated below cannot be justified under the wherewithal to pay concept?

A)The taxation of prepaid income in the year of receipt and not in the year it is earned.
B)The installment method for reporting gain on the sale of property.
C)The nontaxability of a like-kind exchange.
D)The disallowance as a deduction of certain fines and penalties imposed for the violation of certain laws.
E)The rules governing the formation of corporations.

Question 49

Which of the following indicates that a decision has precedential value for future cases?

A)Stare decicis.
B)Golsen doctrine.
C)En banc.
D)Reenactment doctrine.
E)None of the above.

Question 50

Which of the following is an administrative source of tax law?

A)Rev.Rul.2010-19.
B)Joint Conference Committee Report.
C)Section 12(a)of the Internal Revenue Code.
D)All of the above.
E)None of the above.

Question 51

Which trial court has 16 judges?

A)U.S.Tax Court.
B)U.S.Court of Federal Claims.
C)U.S.Supreme Court.
D)U.S.Court of Appeals.
E)None of the above.

Question 52

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

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

Question 53

Identify the number of the Court(s)of Federal Claims.

A)1.
B)3.
C)16.
D)19.
E)None of the above is correct.

Question 54

Regarding technical advice memoranda,which statement is incorrect?

A)Issued by the National Office of IRS.
B)Most often deal with a completed transaction.
C)May be cited and used as precedent.
D)Issued with multi-digit file numbers.
E)None are incorrect.

Question 55

Ralph sells property to Sam who,by prearranged plan,resells to Heather.If the IRS contends that the sale to Sam is to be disregarded,this position is an application of the:

A)Substance over form concept.
B)Wherewithal to pay concept.
C)Tax benefit rule.
D)Arm's length concept.
E)None of the above.

Question 56

Which state is located in the jurisdiction of the Fifth Court of Appeals?

A)Louisiana.
B)California.
C)New York.
D)South Carolina.
E)None of the above.

Question 57

Revenue Procedures are published semiannually in the:

A)Cumulative Bulletin.
B)Federal Revenue Bulletin.
C)Internal Revenue Bulletin.
D)I.R.S.Digest.
E)None of the above.

Question 58

Determine the incorrect citation:

A)Ltr.Rul.20012305.
B)George W.Guill,112 T.C.__,No.22 (1999).
C)John H.Wong,T.C.Summary Opinion 2009-152.
D)Rev.Rul,98-32,I.R.B.No.25,4.
E)None of the above.

Question 59

Which trial court allows a jury trial?

A)U.S.District Court.
B)U.S.Tax Court.
C)U.S.Court of Federal Claims.
D)U.S.Court of Appeals.
E)None of the above.

Question 60

Which trial court's jurisdiction depends on the geographical location of the taxpayer?

A)U.S.Tax Court.
B)U.S.District Court.
C)U.S.Court of Federal Claims.
D)Small Cases Division of the Tax Court.
E)None of the above.

Question 61

Which court decision is generally more authoritative?

A)A U.S.Tax Court decision.
B)Court of Federal Claims decision.
C)District Court decision.
D)U.S.Court of Appeals decision.
E)U.S.Tax Court Memorandum decision.

Question 62

What is the wherewithal to pay concept? Give an example.

Question 63

Which of the following statements about an acquiescence is correct?

A)An acquiescence is issued in the Federal Register.
B)Acquiescences are published only for certain regular decisions of the U.S.Tax Court.
C)An acquiescence is published in the Internal Revenue Bulletin.
D)The IRS does not issue acquiescences to adverse decisions that are not appealed.
E)All of the above are correct.

Question 64

What is the value of Actions on Decisions to a tax researcher?

Question 65

A Memorandum decision of the U.S.Tax Court could be cited as:

A)T.C.Memo.1990-650.
B)68-1 USTC ¶ 9200.
C)37 AFTR 2d 456.
D)All of the above.
E)None of the above.

Question 66

What value is a tax citator to a tax researcher?

Question 67

Explain the Golsen doctrine.

Question 68

Explain the function of Temporary Regulations.