Deck 3: Constitutional and Legislative Sources

Question 1

Which of the following statements is CORRECT regarding the enactment into law of a tax bill?

A) A tax bill must always be signed by the President to become law.
B) A tax law must be approved by the Treasury Department.
C) A tax law must either be signed into law by the President or Congress must override a presidential veto of the proposed law.
D) only b and c

Answer 1

C

Question 2

Subtitle A of the Internal Revenue Code deals with:

A) estate and gift taxes
B) employment taxes
C) income taxes
D) excise taxes

Answer 2

C

Question 3

Which of the following issues is NOT addressed by tax treaties?

A) what tax disclosures must be made by a visitor to a host country
B) treatment of business and investment income earned by a foreign visitor in the United States
C) treatment of business and investment income earned by a foreign citizen in his home country
D) how to compute the taxable amount in the host country
E) all of the above

Answer 3

C

Question 4

Each Congress lasts for:

A) 2 years
B) 1 year
C) 3 years
D) 4 years

Question 5

Which of the following is an administrative source of the Federal tax law issued by the IRS?

A) court rulings
B) Internal Revenue Code
C) tax treaties
D) revenue rulings
E) none of the above

Question 6

Which of the following statements is CORRECT regarding tax treaties:

A) They are authorized by the U.S. Constitution.
B) They are usually initiated by the State Department, not the Treasury.
C) The U.S. can have multiple types of tax treaties with one country.
D) All of the above statements are correct.

Question 7

In the House of Representatives, tax law changes are primarily considered by:

A) the Finance Committee
B) the Joint Conference Committee
C) the Budget Committee
D) the Ways and Means Committee

Question 8

Which of the following sections of the Internal Revenue Code deal with partnerships?

A) the 700s
B) the 300s
C) Section 162
D) Section 501

Question 9

Which of the following is CORRECT regarding the Floor Debate Report?

A) It is contained in the Congressional Record.
B) Technical or detailed information excluded from the committee report(s) may be included
C) It summarizes the discussions made in the House or the Senate concerning a proposed tax bill.
D) All of the above statements are correct.

Question 10

A subtitle of the Internal Revenue Code:

A) is indicated by a capital letter, such as "Subtitle A"
B) relates to a well-defined area of the law
C) is used as a short-hand reference to describe types of corporations
D) only a and b
E) all of the above

Question 11

P.L. 107-16 is the citation for:

A) the Conference report on the 16th public law enacted in the 107th Congress
B) the 16th public law enacted in the 107th Congress
C) a public law enacted by Congress but not signed by the President
D) none of the above

Question 12

Regarding the taxing powers of the federal government, the U.S. Constitution requires that:

A) taxes imposed by Congress must apply uniformly throughout the U.S.
B) no direct taxes may be imposed on income
C) all revenues from the federal income tax must be apportioned to the population of the states from which they were collected
D) all of the above

Question 13

A "tax protester" is:

A) a person who files a 'frivolous' return with the IRS
B) a person who brings a "frivolous" matter before the Tax Court
C) can be subject to a penalty for frivolous Tax Court petitions
D) all of the above
E) only a and b

Question 14

If any differences exist between the House- and Senate-passed versions of a tax bill, the bill is referred to:

A) the Finance Committee
B) the President
C) the Joint Conference Committee
D) the Supreme Court

Question 15

The current Internal Revenue Code is the:

A) Internal Revenue Code of 2011
B) Internal Revenue Code of 1986
C) Internal Revenue Code of 1954
D) none of the above

Question 16

Which of the following statements is INCORRECT regarding the structure of the Internal Revenue Code:

A) Code section numbers start over in each chapter.
B) Each Code section is used only once in the Internal Revenue Code.
C) Code sections inserted between existing section numbers are indicated by adding a capital letter to the Section number (e.g. Section 25A)
D) The Internal Revenue Code is Title 26 of the United States Code.

Question 17

As of 2011, the percentage of U.S. households who did not pay any Federal income tax was roughly:

A) 74 percent
B) 30 percent
C) 47 percent
D) All U.S. houses pay some Federal income tax.

Question 18

Which of the following statements is CORRECT regarding Committee Reports?

A) They are published in the Internal Revenue Bulletin.
B) They are produced by the Treasury Department.
C) They explain the elements of proposed tax law changes and reasons for the changes.
D) all of the above
E) only a and c

Question 19

The overriding purpose of tax treaties is to:

A) create 'tax havens'
B) minimize tax liability of multinational corporations
C) require business taxpayers to file returns in all countries in which they operate
D) eliminate the 'double taxation' that a taxpayer would face if his or her income were subject to tax in both countries

Question 20

The first Internal Revenue Code was:

A) the Internal Revenue Code of 1939
B) the Internal Revenue Code of 1954
C) the Revenue Act of 1913
D) none of the above

Question 21

Treaties may expire because of a specific congressional time limitation.

Question 22

In Pollock v. Farmers' Loan and Trust Co., the Supreme Court held that the income tax was unconstitutional
because it was a constitutionally prohibited 'direct tax'.

Question 23

Which of the following statements is INCORRECT regarding the reasons tax researchers may have difficulty in interpreting the Internal Revenue Code:

A) Code sections can appear to conflict.
B) Definitions can be significantly different from the common use of a term.
C) All exceptions to a Code section are addressed within that same section.
D) Frequently, phrases modify percentage or dollar amounts.

Question 24

Section 121(B)(2)(a)(b)(iii) would be a correct type of Code citation.

Question 25

The Joint Conference Committee is called on to resolve differences between the House Ways and Means Committee version and the full House version of tax legislation.

Question 26

Tax treaties are agreements negotiated between countries concerning the treatment of entities subject to tax in both countries.

Question 27

Circuit Courts are administrative sources of the Federal tax law.

Question 28

Code Section 61 relates to:

A) deductions for adjusted gross income
B) the definition of gross income
C) corporate tax rates
D) the deduction for state taxes

Question 29

Congress cannot override a Presidential veto of a tax bill.

Question 30

The 16th Amendment to the U.S. Constitution authorized the imposition of a Federal income tax.

Question 31

Most tax legislation begins in the House of Representatives.

Question 32

When a Code provision and a provision under a treaty conflict, the one adopted earlier in time generally rules.

Question 33

Which of the following statements is CORRECT regarding the definition of terms in the Internal Revenue Code?

A) All definitions are included in Section 7701.
B) Definitions are always included within the Code section to which they apply.
C) Definitions are written into the Code by the IRS rather than included in tax laws passed by Congress.
D) Sometimes, a researcher may need to consult the regulations to find a complete definition of a term.

Question 34

Subparagraphs are the major divisions of the Internal Revenue Code covering such broad topics as Income Taxes, and Estate and Gift Taxes.

Question 35

A "technical corrections act" is:

A) A set of changes made by IRS to fit new tax law provisions into the Code.
B) An act passed by Congress to remove errors in implementing and interpreting the new provisions of a tax law.
C) The act which provides the effective dates for a new tax law.
D) None of the above.

Question 36

Taxpayers who file frivolous returns are subject to a $25,000 fine.

Question 37

Which of the following statements is INCORRECT regarding effective dates in the Internal Revenue Code:

A) All sections of a new tax law go into effect at the same time.
B) New Code provisions may not go into effect immediately upon adoption by Congress.
C) Some effective dates can precede passage of the act.
D) All of the above are correct.

Question 38

The North American Free Trade Agreement (NAFTA) is a non-tax international treaty which addresses some tax- related issues.

Question 39

Historically, the 1913 income tax was a tax on wealthy and high income taxpayers.

Question 40

Statutory sources of Federal tax law come out of the legislative branch of the U.S. government.

Question 41

What is a tax protester and what types of sanctions are tax protesters subject to?

Question 42

What information is included in the history of a Code section?

Question 43

List several issues that tax treaties commonly address.

Question 44

The 'General Explanation' of tax legislation, called the "Blue Book," is prepared by the Joint Conference Committee.

Question 45

Describe the steps in the legislative process by which a tax bill becomes law.

Question 46

The term 'not less than 50' represents only those numbers which are more than 50.

Question 47

Whenever a major new tax law is passed, CCH and RIA both publish the related Committee Reports.

Question 48

A report of Floor Debate is included in the Congressional Record and may include some detailed or technical information that is excluded from a Committee Report.

Question 49

Trade or business deductions are contained in Code Section 62.