Exam 2: The Tax Practice Environment

Place in order the steps in the tax legislative process from the list below: -The bill is referred to the House Ways and Means Committee b. The bill is referred to the Joint Conference Committee c. A member of the House introduces the tax bill d. The bill is forwarded to the President for his signature e. The Senate votes on the bill f. The House votes on the bill g. The bill is referred to the Senate Finance Committee h. The Conference Committee sends the bill back to the House and the Senate

What is the difference between an interpretive regulation and a legislative regulation?

What effect does an increased discount rate have on project evaluations?

If the Supreme Court decides to hear an appeal of a tax case, it will grant a

The term "on all fours" is generally interpreted to mean

Only CPAs, Enrolled Agents, and Attorneys who prepare tax returns for pay must obtain preparer tax identification numbers.

According to the Statements on Standards for Tax Services, if a CPA discovers an error in a prior return prepared by another tax return preparer, the CPA

A letter ruling can only be relied on by the taxpayer for whom it is written.

Which of the following is not one of the Statements on Standards for Tax Services?

Jacko Corporation has two projects in which it can invest. Project A has a $500,000 initial cost and will return $700,000 after tax in 4 years. Project B has a $300,000 initial cost and its after-tax returns will be $150,000 in year 1 and $200,000 in year 2. Using a 7 percent discount rate for evaluation, which project(s) should Jacko invest in?

What are the steps that are usually required between introduction and passage of a revenue bill?

The statute of limitations for a return that inadvertently overstates expenses by 30 percent of gross revenues is

The document that provides the application of the law to a particular set of facts is a

The higher a firm's marginal tax rate used for project evaluation, the greater the net cash flow from the project.

A memo to file for a client should be more detailed than the client letter.

Which of the following is the highest authority for tax research?

How much tax can Charles save if he holds stock on which he has a $30,000 short-term gain until he can use the applicable 15 percent long-term capital gains tax rate? He is in the 32 percent marginal tax bracket for individuals.

James can invest in a project that will cost $70,000. The project is expected to pay him $95,000 after-tax in 5 years. What is the maximum discount rate, as a whole number, that he could use to evaluate the project that would yield a positive cash flow?

Changing which of the following factors as indicated would increase the after-tax net cash flow of a project:

The Internal Revenue Service must pay interest on any refund that is not mailed within 30 days of the date the taxpayer's tax return is filed.