SmartBook Chapter Two Tax

True or false: After the trial court's verdict, the losing party has the right to request one of the 13 U.S. Circuit Courts of Appeal to hear the case.

True Reason: The losing party can request one of the 13 U.S. Circuit Courts of Appeal to hear the case.

True or false: After the trial court's verdict, the losing party has the right to request one of the 13 U.S. Circuit Courts of Appeal to hear the case. True false question. True False

True

True or false: Open fact transactions are more conducive to tax planning than closed fact transactions. True false question. True False

True Reason: Open facts have not yet occurred, so there is the opportunity to plan the transaction where it yields the most favorable tax treatment.

If their gross income exceeds $600, ......and ......must file a tax return.

Blank 1: estates or estate Blank 2: trusts or trust

Which of the following statements regarding tax return extensions are CORRECT? "S" Corporations may request an automatic six month extension to file. Partnerships extensions are granted for up to four months only. "C" Corporations are not granted automatic tax return extensions. A six-month extension allows a taxpayer to file a return up to six months after the original due date. A six-month extension allows a taxpayer to pay the tax due up to six months after the original due date.

"S" Corporations may request an automatic six month extension to file. A six-month extension allows a taxpayer to file a return up to six months after the original due date.

Which of the following lists contains the basic components of a client letter?

1. Research question and limitations 2. Facts 3. Analysis 4. Closing

List the steps in the legislative process to enact a tax law.

1. The bill is discussed in the House Ways and Means Committee and moves to the house of Representatives for a vote. 2. The bill is reviewed in the Senate Finance committee for discussion and revisions .3. The revised bill from the Finance Committee passes a vote in the Senate. 4. The two versions of the bill are reconciled in the Joint Conference Committee. 5. the bill passes both the House of Representatives and the Senate. 6. The bill is signed into law or vetoed by the President.

Click and drag on elements in order List the five steps in the tax research process in order. Instructions Locate relevant tax authorities Identify issues Analyze tax authorities Understand facts Document and communicate results

1. understand facts 2. identify issues 3. locate relevant tax authorities 4. analyze tax authorities 5. document and communicate results

Which of the choices below BEST describes the judicial doctrine of stare decisis? A court will rule consistently with its previous rulings, but is NOT bound by the rulings of higher courts with appellate jurisdiction. A court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction. All courts will follow the Supreme Court's rulings, but may rule independently of other courts when the issue has NOT reached the Supreme Court. A court will rule consistently with the rulings of higher courts with appellate jurisdiction, but often differs with its own prior decisions.

A court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction.

Which of the following are examples of statutes, rules, and criteria that may govern tax practitioners? (Check all that apply.) Multiple select question. AICPA Code of Professional Conduct IRS Circular 230 Statutes enacted by a CPA's specific state board of accountancy Generally Accepted Accounting Principles International Financial Reporting Standards AICPA Statements of Standards for Tax Services

AICPA Code of Professional Conduct IRS Circular 230 Statutes enacted by a CPA's specific state board of accountancy AICPA Statements of Standards for Tax Services

Which of the following criteria determine whether an individual must file a tax return? (Check all that apply.) Multiple select question. Amount of tax withheld Race Age Number of dependents Gross income Filing status

Age Gross income Filing status

Which of the following statements are correct regarding tax filing requirements? (Check all that apply.) Multiple select question. All corporations must file regardless of income. Corporations do not have to file tax returns if their net income is less than $400. Estates are required to file income tax returns if their gross income exceeds $600. All trusts must file tax returns regardless of income.

All corporations must file regardless of income. Estates are required to file income tax returns if their gross income exceeds $600.

When the IRS loses a court case and issues an acquiescence, what does that mean for a taxpayer? Although the IRS does NOT necessarily agree with the court decision, it will follow the adverse ruling in the future. The IRS disagrees with the stance of the court and will continue to litigate the issue in the future. The IRS agrees with the court's decision and has reversed it's original stance. The IRS plans to appeal the decision to a higher court.

Although the IRS does NOT necessarily agree with the court decision, it will follow the adverse ruling in the future.

Which of the following statements is correct regarding extensions? Multiple choice question. An extension to file will allow a taxpayer extra time to pay his taxes. Extensions must be approved by the IRS before they are valid. Extensions for individual returns give the taxpayer four additional months to file. An extension to file is granted automatically at the request of the taxpayer.

An extension to file is granted automatically at the request of the taxpayer.

When does the statute of limitations generally end for tax noncompliance when fraud is not a factor? 3 years 10 years 6 years No limit

Answer is 3 years Not 6 years Reason: The statute of limitations is typically 3 years. It is 6 years if more than 25 percent of gross income has been omitted. Not No limit Reason: The statute of limitations is generally 3 years. However, there is no statute of limitations for fraud or failure to file a return.

Treasury regulations come in three forms: ........regulations have been issued in their final form and represent the Treasury's interpretations of the Code;............ regulations have a limited life but carry high authoritative weight; and .............regulations, which have the lowest authority

Blank 1: final Blank 2: temporary Blank 3: proposed

A(n)................. -day letter asks the taxpayer to either pay the deficiency or petition the Tax Court to hear the case. A(n)................... -day letter asks the taxpayer to either pay the deficiency or request an appeals conference with the IRS.

Blank 1: 90, 90-day, or ninety Blank 2: 30, 30-day, or thirty

The...................,.............s system assigns a score to each tax return representing the probability the tax liabilities on the return have been underreported. (Enter only one word per blank.)

Blank 1: Discriminant or discriminant Blank 2: Function or function

The .................states that the U.S. Tax Court will abide by the rulings of the circuit court that has appellate jurisdiction for a case.

Blank 1: Golsen Blank 2: rule or rules

(1) ______facts provide opportunities for tax planning, while (2) _____facts deal with tax compliance.

Blank 1: Open Blank 2: Closed or Close

.........facts have not yet occurred. ..............facts have already occurred.

Blank 1: Open Blank 2: Closed or Close

The highest judicial authority is the U.S. ........Court followed by the 13 U.S. Circuit Courts of Appeal, the U.S. .........Court, the U.S. Court of Federal Claims, and the District Court.

Blank 1: Supreme Blank 2: Tax

The ....................is charged with administering and interpreting the tax laws.

Blank 1: Treasury, US, or U.S. Blank 2: Department or Treasury

The statute of limitations defines the period in which the taxpayer can file a(n) ........tax return or the IRS can assess a tax ........for a specific year.

Blank 1: amended or amend Blank 2: deficiency, due, or penalty

In order to identify issues in the tax research process, the tax preparer should get a good understanding of the __________,_________. Then, the tax preparer can combine that information with his knowledge of the tax laws.

Blank 1: client's, relevant, taxpayer's, important, clients, or client Blank 2: facts or fact

The three types of IRS audits are........... , ................, and .............examinations

Blank 1: correspondence Blank 2: office Blank 3: field or field examinations

The penalty for failing to file a tax return that would have a balance due from the taxpayer is ......percent of the tax due for each month or partial month that the return is late. The maximum penalty is generally .....percent.

Blank 1: five or 5 Blank 2: twenty-five, 25, or twenty five

All tax returns are compared to data submitted by third parties such as banks, employers, mortgage companies, etc. with a program referred to as the.................... program

Blank 1: information or information matching Blank 2: matching

When a taxpayer does NOT file her tax return or pay her tax due by the due date, she will be assessed........and ...... if she owed any tax for the year

Blank 1: interest Blank 2: penalty, penalties, or penalized

Our ....system has the ultimate authority to interpret the Internal Revenue Code and to settle disputes between the IRS and taxpayers.

Blank 1: judicial or court

A question of___________ could involve the interpretation of a particular Code section, while a question of__________ hinges upon the circumstances of the taxpayer's transaction.

Blank 1: law Blank 2: fact or facts

The highest authoritative weight when interpreting the Internal Revenue Code are ......issued by the Treasury Department. (

Blank 1: regulations, regulation, or Treasury regulations

Revenue_____ and revenue ______are second in administrative authoritative weight after regulations.

Blank 1: rulings or ruling Blank 2: procedures or procedure

Tax articles in professional journals and law reviews are examples of...... authorities.

Blank 1: secondary

A taxpayer may NOT be subject to an underpayment penalty if there was _______________,_______________ that supports the tax return position.

Blank 1: substantial or reasonable Blank 2: authority, basis, or authorities

Treasury regulations have different purposes______ regulations represent the Treasury's understanding of the Code. _______regulations explain Treasury Department's policies as they relate to administering the Code. And, ___________regulations are issued when the Treasury Department has been instructed to address an issue in an area of law

Blank 1:Interpretive, or Interpretation Blank 2: Procedural Blank 3: Legislative

Which of these penalties may involve incarceration along with monetary penalties? Multiple choice question. Criminal Punitive Civil Negligence

Criminal

After identifying the relevant authorities, which of the following choices is NOT something necessary for a tax researcher to do? Check relevant regulations to see if there has been an update or revision in subsequent years. Check the status of relevant revenue rulings and procedures to see if there has been an update or revision. Check earlier versions of the regulations to see if there is a historic argument for the case. Check relevant court cases to see if there was an appeal or an overturned decision.

Check earlier versions of the regulations to see if there is a historic argument for the case.

True or false: If an individual taxpayer discovers that he has a balance due on his tax return, but he does NOT have the money to pay the amount, he should file an extension in order to extend the date at which the payment is required to be made. True false question. True False

False Reason: An "extension" only postpones the due date of the tax return. However, the total tax liability must be paid by the original due date (typically April 15th).

True or false: New tax laws are placed at the end of the Internal Revenue Code and designated code sections in chronological order by when they were signed into law by the President. True False

False Reason: New laws are incorporated into the appropriate sections of the Code where there are similar transactions or topics.

True or false: New tax laws are placed at the end of the Internal Revenue Code and designated code sections in chronological order by when they were signed into law by the President. True false question. True False

False Reason: New laws are incorporated into the appropriate sections of the Code where there are similar transactions or topics.

True or false: Revenue rulings and revenue procedures are examples of secondary tax authorities.

False Reason: Revenue rulings and revenue procedures are primary authorities. They are official sources of the tax law generated by the administrative branch of the Government.

True or false: A Joint Conference Committee report is important, but is NOT considered an authority of the tax law when disputing a tax position. True false question. True False

False Reason: These committee reports are considered statutory sources of the tax law and can be used to interpret the tax laws.

Which of the following is NOT governing criteria for tax practitioners? Multiple choice question. AICPA Code of Professional Conduct Generally Accepted Accounting Principles IRS Circular 230 AICPA Statements on Standards for Tax Services

Generally Accepted Accounting Principles

Where does a tax bill originate in the legislative process for enacting a law? Joint Conference Committee President's office House of Representatives U.S. Senate

House of Representatives

Where does a tax bill originate in the legislative process for enacting a law? U.S. Senate Joint Conference Committee House of Representatives President's office

House of Representatives

What is the main statutory tax authority? Multiple choice question. Supreme Court decisions Internal Revenue Code Internal Revenue Service Regulations

Internal Revenue Code

Starting with the highest authoritative weight, rank the authorities in descending order. Treasury regulations Internal Revenue Code Letter rulings Revenue rulings and revenue procedures

Internal Revenue Code Treasury regulations Revenue rulings and revenue procedures Letter rulings

The understanding that the Treasury Department has of the Internal Revenue Code is represented in ______ regulations. Multiple choice question. Procedural Legal Legislative Interpretative

Interpretative

The understanding that the Treasury Department has of the Internal Revenue Code is represented in ______ regulations. Multiple choice question. Legislative Procedural Legal Interpretative

Interpretative Legislative Reason: Legislative regulations address issues in an area of law and are created at the request of Congress. Procedural Reason: Procedural regulations explain Treasury Department procedures related to administering the Code. Legal Interpretative Correct Answer

When a new tax law is passed, how is it incorporated into the Internal Revenue Code? (Check all that apply.) It is incorporated with other code sections addressing similar transactions. It is added at the beginning of the Internal Revenue Code in order to alert taxpayers and practitioners to the new legislation. It is placed within a specific subtitle, chapter, subchapter, part, subpart, and section of the Code where it is most appropriate. It is added at the end of the existing Internal Revenue Code with other tax laws that have been enacted in the same year.

It is incorporated with other code sections addressing similar transactions. It is placed within a specific subtitle, chapter, subchapter, part, subpart, and section of the Code where it is most appropriate.

What type of tax authority is the U.S. Constitution, the Internal Revenue Code, and tax treaties? Judicial Legislative Executive Administrative

Legislative

Which type of tax authority is the Internal Revenue Code of 1986? Multiple choice question. Administrative Legislative Judicial Secondary

Legislative

_____rulings are less authoritative and more specific than revenue rulings and regulations.

Letter

What is the due date for calendar-year partnership income tax returns, assuming the date does NOT fall on a Saturday, Sunday or holiday? March 15 April 15 January 31 December 31

Partnership and S corporation returns are due on the fifteenth day of the third month following year-end, which is typically March 15th.

Which of the following choices describes the official sources of the tax law generated by one of the branches of government? Main authorities Editorial authorities Primary authorities Secondary authorities

Primary authorities

Which of the following statements is INCORRECT? Primary authorities come from the legislative, judicial, and executive/administrative branches of government. Primary authorities include the Internal Revenue Code and the Treasury Regulations. Primary authorities include rulings by the trial courts, appellate courts and the U.S. Supreme Court. Primary authorities include IRS forms and publications.

Primary authorities include IRS forms and publications.

Which of the following statements is INCORRECT? Primary authorities include the Internal Revenue Code and the Treasury Regulations. Primary authorities include rulings by the trial courts, appellate courts and the U.S. Supreme Court. Primary authorities come from the legislative, judicial, and executive/administrative branches of government. Primary authorities include IRS forms and publications.

Primary authorities include IRS forms and publications.

Which of the following statements is INCORRECT? Multiple choice question. Primary authorities come from the legislative, judicial, and executive/administrative branches of government. Primary authorities include IRS forms and publications. Primary authorities include the Internal Revenue Code and the Treasury Regulations. Primary authorities include rulings by the trial courts, appellate courts and the U.S. Supreme Court.

Primary authorities include IRS forms and publications.

Which type of issue will focus on understanding how the various components and circumstances of the transaction affect the research answer and look for authorities with fact patterns similar to the client's? Multiple choice question. Question of law Question of fact Question of legality Question of interpretation

Question of fact

Which of the following taxpayer characteristics are NOT factors in determining whether or not a taxpayer is required to file a tax return? (Check all that apply.) Multiple select question. Age Gross income Race Gender Filing status

Race Gender

The tax preparer can avoid a penalty if the tax position has at least a ________, as long as it is disclosed on the tax return.

Reasonable basis

Which of the following choices is NOT one of the steps in the tax research process? Multiple choice question. Identify issues Request private letter ruling Analyze tax authorities Communicate results

Request private letter ruling

Which of the following is NOT one of the basic parts of the internal research memo? Multiple choice question. Conclusion Issues section Secondary authorities Analysis Fact section

Secondary authorities

Which of the following statements is INCORRECT? Multiple choice question. Secondary authorities include tax articles from professional journals and law reviews. Secondary authorities include rulings by the appellate courts because they are the second tier of the court system. Secondary authorities include practitioner guides such as the CCH Master Tax Guide and the RIA Federal Tax Handbook. Secondary authorities include tax research services.

Secondary authorities include rulings by the appellate courts because they are the second tier of the court system.

Which type of taxpayer has lower gross income thresholds for filing than the general filing requirements? Individuals receiving social security payments Self-employed persons Taxpayers age 65 or older Individuals receiving wage income

Self-employed persons

Sally has NOT completed her tax return and the due date is approaching. She estimates that she will owe no more than $1,500, but she doesn't have time to finish her return by April 15th. She has decided to file an extension. Which of the following statements describes what she needs to do when filing the extension? Multiple choice question. She should send in a $1,500 payment when filing the extension. She is not eligible to file an extension because she owes an additional amount of tax at the end of the year. She should file the extension, but she can wait and pay the $1,500 when she actually files the return.

She should send in a $1,500 payment when filing the extension

What judicial doctrine means that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction? Sub judice Sui generis Stare decisis Trial de novo

Stare decisis

Which of the following is NOT a computer initiative that helps the IRS identify tax returns that may have an understated tax liability? Statistical percentage program Document perfection program Discriminant function system Information matching program

Statistical percentage program

The U.S. .......Court agrees to hear only a few tax cases each year. The cases must have great significance to a broad cross-section of taxpayers or settle disagreement among the circuit courts in order to be heard in this court.

Supreme

Which of the following statements is INCORRECT regarding Treasury regulations? Multiple choice question. Temporary regulations carry less authoritative weight than final regulations. Proposed regulations do not carry the same authoritative weight as final regulations. Proposed regulations allow public comment on them. Final regulations represent the Treasury's interpretation of the Code.

Temporary regulations carry less authoritative weight than final regulations.

What is meant by the Golsen rule? Multiple choice question. The Golsen rules states that a court will rule consistently with its previous rulings and the rulings of higher courts with appellate jurisdiction. The Golsen rule states that the U.S. Tax Court will abide by the rulings of the circuit court that has appellate jurisdiction for a case. The Golsen rule states that the decisions of the U.S. Supreme Court are to followed by all lower courts. The Golsen rule states that all U.S. Circuit Courts of Appeal will rule consistently on similar issues.

The Golsen rule states that the U.S. Tax Court will abide by the rulings of the circuit court that has appellate jurisdiction for a case.

When the IRS loses a court case and issues a nonacquiescence, what does that mean for a taxpayer? Although the IRS does NOT necessarily agree with the court decision, it will follow the adverse ruling in the future. The IRS disagrees with the stance of the court and will continue to litigate the issue in the future. The IRS agrees with the court's decision. The IRS plans to appeal the decision to a higher court

The IRS disagrees with the stance of the court and will continue to litigate the issue in the future.

What is the main statutory tax authority? Regulations Internal Revenue Code Supreme Court decisions Internal Revenue Service

The Internal Revenue Code is the main tax authority.

Which of the following statements is correct? Multiple choice question. Within its own geographic area, a District Court carries more authoritative weight than the U.S. Tax Court. The Supreme Court and the Internal Revenue Code represent the highest tax-specific authorities in tax law. The U.S. Court of Federal Claims is considered to be a higher authority than the U.S. Tax Court. The Supreme Court, along with the IRC, establishes tax law that is interpreted by the other authorities.

The Supreme Court and the Internal Revenue Code represent the highest tax-specific authorities in tax law. Within its own geographic area, a District Court carries more authoritative weight than the U.S. Tax Court. Reason: Since the Tax Court only hears tax cases and the judges are tax experts, the decisions carry more weight than the other trial courts. The Supreme Court and the Internal Revenue Code represent the highest tax-specific authorities in tax law. The U.S. Court of Federal Claims is considered to be a higher authority than the U.S. Tax Court. Reason: Since the Tax Court only hears tax cases and the judges are tax experts, the decisions carry more weight than the other trial courts. The Supreme Court, along with the IRC, establishes tax law that is interpreted by the other authorities. Reason: The Supreme Court does not establish law; it simply interprets the law.

Which trial court does NOT require the taxpayer to pay the deficiency before the case is heard? Multiple choice question. The U.S. Circuit Court of Appeal The U.S. Court of Federal Claims The U.S. Tax Court The U.S. District Court

The U.S. Tax Court The U.S. Circuit Court of Appeal Reason: The Tax Court is the only venue where the taxpayer does not have to pay the deficiency and then sue for a refund. The court of appeal is not a trial court. The U.S. Court of Federal Claims Reason: The Tax Court is the only venue where the taxpayer does not have to pay the deficiency and then sue for a refund. The U.S. Tax Court The U.S. District Court Reason: The Tax Court is the only venue where the taxpayer does not have to pay the deficiency and then sue for a refund.

How does the losing party in a trial court decide which U.S. Circuit Court of Appeals will hear the case? The case must be appealed to the U.S. Circuit Court with jurisdiction over the taxpayer's case (typically based on the taxpayer's residence). The losing party should choose the U.S. Circuit Court with the most experience on that particular tax issue. The case will be heard by the U.S. Circuit Court with the lightest case load in order to expedite the process. The losing party should appeal in the circuit that has ruled most consistently with its stance on the tax position.

The case must be appealed to the U.S. Circuit Court with jurisdiction over the taxpayer's case (typically based on the taxpayer's residence).

Which of the following statements is INCORRECT regarding the components of a client letter? Multiple choice question. The client letter should contain an analysis of the authorities and a closing which summarizes the recommended action. The facts should be detailed and lengthy in order to ensure that everything has been covered. The research question and limitations should be clearly stated, so that there is a mutual understanding of the work to be performed.

The facts should be detailed and lengthy in order to ensure that everything has been covered.

Who has the ultimate authority to interpret the IRC and settle tax disputes? Multiple choice question. The Internal Revenue Service The legislative system Congress The judicial system

The judicial system

Which of the following reasons is NOT sufficient for the U.S. Supreme Court to agree to hear a tax case? The tax issues in the case have great significance to a broad cross-section of taxpayers. The tax issues are not clearly covered in the Internal Revenue Code. The tax issues in the case have been resolved differently among the circuit courts.

The tax issues are not clearly covered in the Internal Revenue Code.

What action does the 30-day letter provide a taxpayer if the taxpayer does NOT agree with an assessment after being audited by the IRS? The taxpayer can request an appeals conference. The taxpayer should petition the U.S. Tax Court to hear the case. The taxpayer should file for an Offer in Compromise. If there has been an audit, the taxpayer should pay the deficiency. There is no recourse.

The taxpayer can request an appeals conference.

What action does the 90-day letter provide a taxpayer if the taxpayer does NOT agree with an assessment after being audited by the IRS and participating in the appeals conference? The taxpayer should petition the U.S. Tax Court to hear the case. The taxpayer can request a second appeals conference with a senior IRS manager. The taxpayer should file for an Offer in Compromise. If the appeals conference is unsuccessful, the taxpayer should pay the deficiency. There is no recourse.

The taxpayer should petition the U.S. Tax Court to hear the case.

Which of the following statements does NOT apply to private letter rulings? Multiple choice question. They explain the IRS position on a proposed transaction for the taxpayer. They carry the same weight and authority as Treasury regulations. They typically address transactions with potentially large tax implications. They are issued at the request of the taxpayer.

They carry the same weight and authority as Treasury regulations.

What audit function does the document perfection program perform? Multiple choice question. The program checks the tax return for unusually large deductions relative to the amount of income reported on the return. This program checks the tax return for mathematical and tax calculation errors. This program matches the information on the tax return to the information reported to the IRS by third-parties. The program allows individuals to anonymously report noncompliance of other taxpayers.

This program checks the tax return for mathematical and tax calculation errors.

What audit function does the information matching program perform? Multiple choice question. The program checks the tax return for unusually large deductions relative to the amount of income reported on the return. This program matches the information on the tax return to information reported to the IRS by third-parties. The program allows individuals to anonymously report noncompliance of other taxpayers. This program checks the tax return for mathematical and tax calculation errors.

This program matches the information on the tax return to information reported to the IRS by third-parties.

What is the purpose of Circular 230? To provide instructions on how to complete a tax return and the acceptable methods for performing tax research To provide regulations governing tax practice that apply to all persons practicing before the IRS To provides rules for CPA's/attorneys regarding the revocation of their credentials for unethical practices, but does not apply to other preparers To provide a comprehensive list of all penalties that can be imposed on tax practitioners and taxpayers for noncompliance

To provide regulations governing tax practice that apply to all persons practicing before the IRS

Which of the following primary authorities is NOT a legislative source of authority? Treasury regulations Internal Revenue Code U.S. Constitution Tax treaties

Treasury regulations

Which of the following primary authorities is NOT a legislative source of authority? Multiple choice question. Internal Revenue Code U.S. Constitution Treasury regulations Tax treaties

Treasury regulations

To where does a losing party in a trial level court appeal the decision? Internal Revenue Service U.S. Tax Court of Appeals U.S. Circuit Court of Appeal U.S. Supreme Court

U.S. Circuit Court of Appeal Internal Revenue Service Reason: To one of the 13 U.S. Circuit Courts of Appeal U.S. Tax Court of Appeals Reason: To one of the 13 U.S. Circuit Courts of Appeal (based on the taxpayer's residence) U.S. Circuit Court of Appeal U.S. Supreme Court Reason: To one of the 13 U.S. Circuit Courts of Appeal; the Supreme Court may agree to hear the case after the appeal

Starting with the court having the highest level of authority, rank the courts in descending order of authoritative rank. District Courts Circuit Courts of Appeal U.S. Tax Court U.S. Supreme Court U.S. Court of Federal Claims

U.S. Supreme Court Circuit Courts of Appeal U.S. Tax Court U.S. Court of Federal Claims District Courts

U.S. Tax Court-A taxpayer feels very confident in her position and lacks the funds to pay the assessment. A taxpayer feels very confident in her position and lacks the funds to pay the assessment. U.S. District Court-The tax return position is low on technical support, but high on emotional appeal. The tax return position is low on technical support, but high on emotional appeal. U.S. Court of Federal Claims.-The taxpayer knows that the Circuit Court of Appeals in the circuit in which she resides has ruled against a similar tax return position in the past.

U.S. Tax Court-A taxpayer feels very confident in her position and lacks the funds to pay the assessment. A taxpayer feels very confident in her position and lacks the funds to pay the assessment. U.S. District Court-The tax return position is low on technical support, but high on emotional appeal. The tax return position is low on technical support, but high on emotional appeal. U.S. Court of Federal Claims.-The taxpayer knows that the Circuit Court of Appeals in the circuit in which she resides has ruled against a similar tax return position in the past.

Tax services that are arranged by Internal Revenue Code Sections are known as ___________ tax services.

annotated

During the tax research process, the exercise of attaining and understanding the client's facts and combining those facts with the tax preparer's knowledge of the tax law is referred to as: Multiple choice question. identifying the issues analyzing the tax authorities locating the relevant authorities communicating the result

identifying the issues identifying the issues analyzing the tax authorities Reason: Analyzing the tax authorities requires application of the rules to the facts to answer the client's questions. Here the tax preparer is still gathering information and determining what the issue is. locating the relevant authorities communicating the results

Question Mode Multiple Choice Question Which of the following lists contains the five basic parts of an internal research memo? issues, facts, authority list, opinion, analysis issues, facts, authority list, conclusion, analysis issues, facts, authority list, conclusion, discussion issues, facts, authority list, opinion, discussion

issues, facts, authority list, conclusion, analysis

A ______ is issued in response to a taxpayer request. These requests commonly relate to proposed transactions with potentially large tax implications.

private letter ruling private letter ruling revenue ruling Reason: Revenue Rulings are not generated in response to a taxpayer's request. determination letter Reason: While these letters also come at a taxpayer's request, they are issued by the local IRS directors and typically relate to a closed (completed) transaction. technical advice memorandum Reason: TAM's are generally for completed transactions and are requested by IRS agents during an IRS audit.

Revenue _____address the application of the Code and regulations to a specific factual situation. They provide a much more detailed interpretation of the Code than the regulations as it applies to a specific transaction.

rulings, ruling, or rules

The gross income filing thresholds are calculated as the sum of which of the following criteria? (Check all that apply.) Multiple select question. itemized deductions standard deduction additional deductions for taxpayers age 65 or older additional deductions for taxpayers who are blind

standard deduction additional deductions for taxpayers age 65 or older

Primary sources consist of statutory, administrative, and judicial sources of the law. The ..........source includes committee reports from the House Ways and Means Committee or the Senate Finance Committee

statutory

Tax services that are arranged by topic, such as types of taxable income, are known as _______tax services.

topical

Once the tax researcher has identified the relevant authorities, the researcher must make sure the authorities are still______ and up to date.

valid