Week 8

The enabling statute that creates a federal administrative agency

Forms guidelines the agency will follow when addressing problems.

Which of the following may be cited to sustain a position?

Announcements.

Which of the following statements best describes the applicability of a constitutionally valid Internal Revenue Code section on the various courts?

All courts are bound by the Code section

With regard to terminology relating to court decisions, which of the following statements is false?

Answer: A writ of certiorari is a petition issued by the lower appellate court to the Supreme Court to hear a case that is not subject to obligatory review by the Supreme Court. These statements are true: -Decision, the court's formal answer to the principal issue in litigation, is legally binding and is enforceable by the authority of the court. -Dictum, a court's statement of opinion on a legal point not necessary for the decision of the case, is not controlling but may be persuasive to another court deciding the issue dealt with by the dictum. -Acquiescence by the Commissioner of Internal Revenue Service on adverse regular Tax Court decisions generally means the IRS will follow the Court's decision in cases involving similar facts.

Concerning final regulations, which of the following statements is true?

Answer: Adoption occurs after public comment on the proposed versions has been evaluated by the Treasury. These statements are false: -The document describing the finalization is referred to as a Treasury Final. -All Code sections have final Treasury Regulations. -Reg §1-385 is the final regulation for IRC Sec. 385.

In cases where the literal language of the Code is ambiguous, the courts may consider which of the following?

Answer: Both the history of the Code section and its relationship to other Code sections. May not consider: -Neither the history of the Code section nor its relationship to other Code sections. -Relationship of the Code section to other Code sections. -History of the Code section.

Which of the following statements is false with respect to court decisions?

Answer: Dictum is the court's formal answer to the principal issue in litigation. It is legally binding and is enforceable by the authority of the courts. These statements are true: -A memorandum decision issued by the Tax Court is thought to be of little value as a precedent because the issue has been decided many times. -Acquiescence by the Commissioner of Internal Revenue to regular Tax Court adverse decisions generally means that the IRS will follow the Tax Court decision in cases involving similar facts. -Petition to the Supreme Court to hear a case is by writ of certiorari, which is initially requested by the appealing party and is issued by the Supreme Court to the lower appellate court, requesting the record of a case for review.

Which one of the following is not a characteristic of a temporary regulation?

Answer: Has the force and effect of law after final regulations are issued. Characteristics of a temporary regulation: -Can be used as somewhat of an authority. -May remain effective for a maximum of 3 years. -Must be issued concurrently as proposed regulations.

Certain operations of administrative agencies such as the IRS are apparent exceptions to the doctrine of separation of powers. This follows from the exercise by administrative agencies of all but which of the following powers?

Answer: Hearing appeals from certain federal courts. Includes these powers: -Investigation and enforcement. -Adjudication. -Rulemaking.

Which of the following is not one of the three classes of Treasury Regulations?

Answer: Judicial. The 3 classes of Treasury Regulations: -Final. -Proposed. -Temporary.

Which of the following statements relating to Treasury Regulations is false?

Answer: Public hearings are always held on temporary regulations. These statements are true: -Temporary regulations are issued to provide guidance for the public and IRS employees until final regulations are issued. -Proposed regulations are issued to solicit public written comments. -Final regulations supersede temporary regulations.

Which of the following statements with respect to regulations is false?

Answer: Public hearings are not held on proposed regulations. These statements are true: -Public hearings are not held on temporary regulations without a written request. -All regulations are written by the Office of the Chief Counsel, IRS, and approved by the Secretary of Treasury. -Although IRS employees are bound by the regulations, the courts are not.

Which of the following should not be cited to sustain a position?

Answer: Publications Should be cited to sustain a position: -Tax Conventions. -Treasury Decisions. -Executive Orders.

With regard to Treasury Regulations, which of the following statements is false?

Answer: Regulations provide an explanation to tax laws and have the force and effect of law These statements are true: -Sec. 7805(a) authorizes the issuing of income tax regulations. -Legislative regulations are those for which the IRS is specifically authorized by the Internal Revenue Code to provide the details of the meaning and rules for particular Code sections. -Proposed regulations are issued to invite comment on regulations and suggest changes before the regulations become final.

With regard to revenue rulings and revenue procedures, which of the following statements is false?

Answer: Revenue rulings have the force and effect of Treasury Regulations. These statements are true: -A revenue ruling is a published official interpretation of tax law by the IRS that sets forth the conclusion of the IRS on how the tax law is applied to an entire set of facts. -Revenue procedures are directive and not mandatory so that a taxpayer has no vested right to the benefit of the procedures when the IRS deviates from its internal rules. -A revenue procedure is a published official statement of procedure that either affects the rights or duties of taxpayers or other members of the public under the Internal Revenue Code and related statutes and regulations or, if not necessarily affecting the rights and duties of the public, should be a matter of public knowledge.

Which of the following statements is true concerning the powers of the IRS?

Answer: The IRS has quasi-legislative power and quasi-judicial power. These statements are false: -The separation-of-powers doctrine encourages the concentration of power in the IRS. -The ultra vires doctrine permits the IRS to act outside its delegated scope of power in some cases. -The IRS's combination of powers is consistent with the separation-of-powers doctrine.

Which of the following statements regarding the Commissioner of Internal Revenue's position on court decisions is false?

Answer: The commissioner cannot withdraw an acquiescence and substitute a nonacquiescence. These statements are true: -The commissioner may decide to acquiesce to an adverse regular Tax Court decision. -The acquiescence program is not intended as a substitute for a ruling or regulation program. -The decisions of the courts, other than the Supreme Court, are binding on the commissioner only for the particular taxpayer and for the years litigated.

Which of the following is a false statement regarding court cases, revenue rulings, and revenue procedures?

Answer: The denial of a writ of certiorari by the U.S. Supreme Court is the equivalent of a reversal or disagreement. These statements are true: -Announcements concerning the Internal Revenue Service's acquiescence or nonacquiescence in Tax Court decisions (other than memorandum decisions) that are adverse to the government's position are published in Internal Revenue Bulletins. -The Internal Revenue Service does not publish decisions by United States District Courts or the United States Court of Federal Claims. To find these decisions, one must look to publications issued by commercial printing houses. -U.S. Supreme Court decisions on federal tax matters are published in Internal Revenue Bulletins.

Which of the following statements with respect to court decisions is false?

Answer: The denial of a writ of certiorari is the equivalent of a disagreement. These statements are true: -Petition to the Supreme Court to hear a case that is not subject to obligatory review is by writ of certiorari. -The citator contains case histories and recent case developments, such as appeals, writs of certiorari, and related cases. -Decisions of the courts other than the Supreme Court are binding on the Commissioner of Internal Revenue only for the particular taxpayer and for the years litigated.

Which of the following statements is false?

Answer: The government prints the regular and memorandum Tax Court decisions in bound volumes. These statements are true: -Interpretative regulations are issued under the general authority of Internal Revenue Sec. 7805(a), and legislative regulations are issued under the authority of the specific Internal Revenue Code section to which they relate. -The Commissioner of Internal Revenue may issue a public acquiescence or nonacquiescence on District Court or Court of Federal Claims cases. -The Tax Court will issue either a regular report or a memorandum decision depending upon the issues involved and the relative value of the decision being made.

Which of the following may be cited to sustain a position

Answer: Treasury Decisions. May not be cited to sustain a position: -Private Letter Rulings. -General Counsel Memoranda. -Technical Advice Memoranda

Which of the following promulgates procedural regulations?

Commissioner of the IRS.

In order to show that a tax preparer's application of tax law was in line with the intent of the tax law, the preparer should cite which of the following types of authoritative sources to make the most convincing case?

Committee report.

Which of the following are useful tools in determining Congressional intent behind certain tax laws and helping examiners apply the law properly?

Committee reports.

Which of the following authorizes specific IRS employees to perform certain tasks or make certain decisions?

Delegation Order.

Which of the following is a secondary tax source?

Determination letters.

The petition for the U.S. Supreme Court to issue a writ of certiorari is a formal request for review. The granting of a writ of certiorari is

Discretionary.

Which of the following is not a type of administrative regulation?

Executive

All courts except the Tax Court are bound by legislative regulations.

False

All regulations are written by the Office of Chief Counsel. Internal Revenue Service employees and all courts, except the U.S. Supreme Court, are bound by these regulations.

False

Final regulations are issued to elicit comments from the public.

False

Interpretative regulations are issued pursuant to specific authorization from Congress in particular Code sections.

False

Nonacquiescence by the Commissioner of Internal Revenue to an adverse decision in a regular Tax Court case means the Internal Revenue Service does not accept the decision but will follow it in cases involving similar facts.

False

Proposed regulations automatically replace the temporary regulations.

False

The Commissioner of Internal Revenue does not publicly announce acquiescence or nonacquiescence to regular decisions adverse to the IRS's position other than those of the United States Tax Court.

False

The Commissioner of Internal Revenue may subsequently revise a nonacquiescence but not an acquiescence.

False

The Tax Court and the Federal Circuit Courts of Appeals are the only courts that are bound by the Internal Revenue Code.

False

The courts are bound by legislative regulations but not by interpretative regulations.

False

Which of the following is bound by Treasury Regulations?

IRS Appeals Office.

Which of the following explains tax law in plain language for taxpayers and their advisors?

IRS Publication

Which of the following is not published in the Internal Revenue Bulletin?

IRS Publications.

Which of the following is the authoritative instrument of the Commissioner of Internal Revenue for announcing official IRS rulings?

Internal Revenue Bulletin.

In which of the following does the IRS publish all substantive rulings necessary to promote a uniform application of the tax laws, including rulings that supersede, revoke, modify, or amend any of those previously published?

Internal Revenue Bulletins.

The current Internal Revenue Code is the

Internal Revenue Code of 1986.

Which of the following explains the meaning of a statutory provision?

Interpretive regulation.

Which of the following represents the conclusion of the IRS for an individual taxpayer, and is confined to the specific case for which it was issued?

Private Letter Ruling (PLR).

Which of the following is not a miscellaneous document published in the Internal Revenue Bulletin?

Private Letter Ruling.

Which of the following represents the conclusion of the IRS for an individual taxpayer?

Private Letter Ruling.

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

Proposed regulation.

Which of the following is false with respect to classes of regulations?

Proposed regulations have the same force and effect of law as temporary regulations.

Which of the following lists the proper hierarchy of authority from lowest to highest for Treasury Regulations?

Proposed, temporary, final.

Which of the following statements regarding Treasury Regulations is false?

Regulations are binding on all courts except the U.S. Supreme Court.

Which of the following statements best describes how regulatory agencies of the U.S. government such as the IRS are restricted in the adoption of specific regulations?

Regulations must be consistent with standards established in the legislation that created the agency.

The IRS promulgates regulations that have the force and effect of law. This process is known as

Rulemaking.

Decisions of which federal court require the IRS to alter its position for all taxpayers?

Supreme Court.

Which of the following is a correct path for a tax case to reach the U.S. Supreme Court?

Tax Court, Circuit Court of Appeals, Supreme Court.

Which of the following is known to be helpful in tracing the history and rationale behind a regulation or regulation proposal?

Technical Memo.

Which of the following is the primary source of federal tax law?

The Internal Revenue Code of 1986.

The federal court system includes

The following trial courts: District Courts, the U.S. Tax Court, and the bankruptcy courts.

The authority of an agency such as the IRS to make law is typically determined by

The statute that created the agency.

Which title of the U.S. Code contains the Internal Revenue Code?

Title 26 (IRC)

Which of the following is a primary tax source?

Treaties.

A dictum is a court statement of opinion on a legal point that is not necessary for the decision of the case.

True

A memorandum decision is a report of a Tax Court decision thought to be of little value as a precedent because the issue has been decided many times.

True

All of the following statements are true: A petition to the U.S. Supreme Court to hear a case that it is not obliged to review is by writ of certiorari. -The writ of certiorari is initially requested by an appellant in an appropriate case. -The writ of certiorari is issued by the U.S. Supreme Court to the lower appellate court requesting the record of a case for review.

True

All regulations are written by the Office of the Chief Counsel, IRS, and approved by the Secretary of the Treasury.

True

Although IRS employees are bound by Treasury Regulations, the courts are not.

True

Decisions of the courts, other than the Supreme Court, are binding on the Commissioner of Internal Revenue only for the particular taxpayer and for the years litigated.

True

If the Supreme Court determines that various lower courts are deciding a tax issue in an inconsistent manner, it may review a decision and resolve the contradiction.

True

Interpretative and legislative regulations provide explanations, definitions, examples, and rules that explain the language of the Code. Accordingly, your research of a particular Code section cannot be considered complete until you have read the regulations that interpret it

True

Nonacquiescence by the Commissioner of Internal Revenue to an adverse decision in a regular Tax Court case means the Internal Revenue Service will not accept the decision and will not follow it in cases involving similar facts.

True

Proposed regulations do not replace the temporary regulations unless the proposed regulations specifically say they replace them.

True

Public hearings are not held on temporary regulations unless written requests are made.

True

Revenue procedures are official IRS statements of procedure that either affect the rights or duties of taxpayers or other members of the public or concern matters that are considered to be matters of public knowledge.

True

Revenue rulings are the published conclusions of the IRS concerning the application of tax law to a specific set of facts.

True

Revenue rulings, revenue procedures, and all U.S. Supreme Court decisions on federal tax matters are published in the Internal Revenue Bulletin (IRB).

True

The Commissioner of Internal Revenue will announce acquiescence or nonacquiescence only when the Tax Court's decision is adverse to the IRS's position.

True

The Internal Revenue Code is binding on all courts except when held to violate the Constitution.

True

The courts are not bound by Treasury Regulations.

True

The courts give great importance to the literal language of the Internal Revenue Code, but they also consider, among other things, the history of a particular section of the Code, its relationship to other Code sections, and the reports of Congressional committees.

True

The purpose of revenue rulings is to promote a uniform application of the tax law to an entire set of facts. Therefore, IRS employees must follow the rulings, while taxpayers may contest in court adverse return examination decisions based on these findings.

True

Whether or not the Commissioner of Internal Revenue decides to appeal an adverse Tax Court decision, (s)he may nonacquiesce in the case, which means that the IRS does not accept the adverse decision and will not follow it in cases on the same issue.

True

Appeal from the U.S. Court of Federal Claims is to the

U.S. Court of Appeals for the Federal Circuit.

The Commissioner of Internal Revenue will not publicly announce acquiescence or nonacquiescence to the adverse regular decisions of which of the following courts?

United States Supreme Court.

The Internal Revenue Bulletin (IRB) is the authoritative instrument of the Commissioner of Internal Revenue. It is published by the Government Printing Office on a

Weekly basis.

IRS notices and announcements are identified by a number representing the

Year and a sequence number.