Question 1

Are letter rulings of precedential value to third parties?

Accepted Answer

Not really. A letter ruling is binding o

Question 2

According to the Statements on Standards for Tax Services, CPAs must verify all tax return information submitted by reviewing client documentation.

Accepted Answer

A) True 
 B)False

Question 3

In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer.

Accepted Answer

It is important to consider nontax objec

Question 4

Identify which of the following statements is false.

Accepted Answer

A)  The opportunity for "forum shopping" occurs when different precedents on the same point exist. 
B)  The U.S. Tax Court follows the previous decisions of the U.S. Court of Appeals to which the tax matter is appealable. 
C)  The U.S. Tax Court must follow the previous decisions of the U.S. District Court for the district in which the taxpayer lives. 
D)  The U.S. Tax Court may intentionally issue conflicting decisions. 
A)  The opportunity for "forum shopping" occurs when different precedents on the same point exist. 
B)  The U.S. Tax Court follows the previous decisions of the U.S. Court of Appeals to which the tax matter is appealable. 
C)  The U.S. Tax Court must follow the previous decisions of the U.S. District Court for the district in which the taxpayer lives. 
D)  The U.S. Tax Court may intentionally issue conflicting decisions.

Question 5

Which regulation deals with Code Section 165?

Accepted Answer

A)  Reg. Sec. 1.165- 5 
B)  Reg. Sec. 165- 5 
C)  Reg. Sec. 1.5- 165 
D)  Reg. Sec. 165.183- 5 
A)  Reg. Sec. 1.165- 5 
B)  Reg. Sec. 165- 5 
C)  Reg. Sec. 1.5- 165 
D)  Reg. Sec. 165.183- 5

Question 6

Does Title 26 contain statutory provisions dealing only with income taxation? Explain.

Accepted Answer

No; Title 26 deals with all ta

Question 7

If the U.S. District Court for Rhode Island, the Tax Court, and the Eleventh Circuit have all ruled on a particular issue, then what precedents have been set for which courts in the future?

Accepted Answer

Any U.S. District court within the Eleve

Question 8

Which of the following statements about the Statements on Standards for Tax Services is true?

Accepted Answer

A)  The CPA must tell the IRS upon becoming aware that an error has been made on a past tax return. 
B)  The CPA may in good faith rely on information provided by the taxpayer, without verifying the reliability of that information if reasonable inquiries are made where the information furnished appears to be incorrect. 
C)  The CPA should not recommend that a taxpayer take a certain position if there is any doubt as to whether the position would be approved by the IRS upon audit. 
D)  A CPA is never allowed to use a taxpayer's estimates when preparing a tax return. 
A)  The CPA must tell the IRS upon becoming aware that an error has been made on a past tax return. 
B)  The CPA may in good faith rely on information provided by the taxpayer, without verifying the reliability of that information if reasonable inquiries are made where the information furnished appears to be incorrect. 
C)  The CPA should not recommend that a taxpayer take a certain position if there is any doubt as to whether the position would be approved by the IRS upon audit. 
D)  A CPA is never allowed to use a taxpayer's estimates when preparing a tax return.

Question 9

Tax planning is not an integral part of open- fact situations.

Accepted Answer

A) True 
 B)False

Question 10

Identify which of the following statements is false.

Accepted Answer

A)  The citation Ltr. Rul. 200611075 usually indicates the ruling was made public in the 11th week of 2006. 
B)  Rev. Proc. 2006- 19 is a revenue procedure that was published in 2006. 
C)  A technical advice memorandum is made available as a letter ruling. 
D)  A revenue ruling is issued by the Internal Revenue Service only in response to a written inquiry by a taxpayer. 
A)  The citation Ltr. Rul. 200611075 usually indicates the ruling was made public in the 11th week of 2006. 
B)  Rev. Proc. 2006- 19 is a revenue procedure that was published in 2006. 
C)  A technical advice memorandum is made available as a letter ruling. 
D)  A revenue ruling is issued by the Internal Revenue Service only in response to a written inquiry by a taxpayer.

Question 11

Ralph's business records were lost as a result of Hurricane Katrina. CPA Jane prepares Ralph's return using estimates. What do the Statements on Standards for Tax Services state about the use of estimates?

Accepted Answer

A)  Estimates may be used, but Jane should disclose their use to the IRS. 
B)  Estimates may be used without disclosing their use to the IRS. 
C)  Estimates may not be used. 
D)  The Statements on Standards for Tax Services do not address the use of estimates. 
A)  Estimates may be used, but Jane should disclose their use to the IRS. 
B)  Estimates may be used without disclosing their use to the IRS. 
C)  Estimates may not be used. 
D)  The Statements on Standards for Tax Services do not address the use of estimates.

Question 12

Assume that you want to read a description of a particular area of the law, along with one or more illustrations of how that law is applied. You will not find that type of material in

Accepted Answer

A)  the Treasury Regulations. 
B)  the Cumulative Bulletin. 
C)  the Committee Reports. 
D)  a citator. 
A)  the Treasury Regulations. 
B)  the Cumulative Bulletin. 
C)  the Committee Reports. 
D)  a citator.

Question 13

The term "tax law" includes

Accepted Answer

A)  judicial decisions. 
B)  legislation. 
C)  treasury regulations. 
D)  all of the above 
A)  judicial decisions. 
B)  legislation. 
C)  treasury regulations. 
D)  all of the above

Question 14

Your client wants to deduct commuting expenses on his tax return. You explain to the client that there is no legal authority allowing this deduction. The client, however, continues to insist on this action. What guidance do the Statements on Standards for Tax Services provide in this dilemma?

Accepted Answer

According to Statement on Tax Standards,

Question 15

Investigation of a tax problem that involves a closed- fact situation means that

Accepted Answer

A)  the client's tax return has yet to be filed. 
B)  the client's transactions have already occurred and the tax questions must now be resolved. 
C)  future events may be planned and controlled. 
D)  research is primarily concerned with applying the law to the facts as they exist. 
A)  the client's tax return has yet to be filed. 
B)  the client's transactions have already occurred and the tax questions must now be resolved. 
C)  future events may be planned and controlled. 
D)  research is primarily concerned with applying the law to the facts as they exist.

Question 16

Describe the format of a client memo.

Accepted Answer

A client memo should include a statement

Question 17

Identify which of the following statements is false.

Accepted Answer

A)  Technical advice memoranda are issued by the Internal Revenue Service's National Office to provide an answer to a technical question that arises in an audit. 
B)  The citation Ann. 2006- 12, I.R.B. 2006- 51, 22 refers to an annotation of an Internal Revenue Service release. 
C)  Letter rulings are not published by the U.S. Government Printing Office. 
D)  Announcements are more technical than information releases. 
A)  Technical advice memoranda are issued by the Internal Revenue Service's National Office to provide an answer to a technical question that arises in an audit. 
B)  The citation Ann. 2006- 12, I.R.B. 2006- 51, 22 refers to an annotation of an Internal Revenue Service release. 
C)  Letter rulings are not published by the U.S. Government Printing Office. 
D)  Announcements are more technical than information releases.

Question 18

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?

Accepted Answer

A)  26 
B)  20 
C)  301 
D)  25 
A)  26 
B)  20 
C)  301 
D)  25

Question 19

When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the court is following the

Accepted Answer

A)  Golsen rule. 
B)  Forum shopping rule. 
C)  Acquiescence rule. 
D)  Conformity rule. 
A)  Golsen rule. 
B)  Forum shopping rule. 
C)  Acquiescence rule. 
D)  Conformity rule.

Question 20

During the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should

Accepted Answer

A)  correct the error in the current year's tax return. 
B)  ask the client for permission to disclose the error to the IRS. 
C)  inform the IRS of the error, regardless of whether the client grants permission. 
D)  withdraw from the engagement. 
A)  correct the error in the current year's tax return. 
B)  ask the client for permission to disclose the error to the IRS. 
C)  inform the IRS of the error, regardless of whether the client grants permission. 
D)  withdraw from the engagement.

Are letter rulings of precedential value to third parties?

According to the Statements on Standards for Tax Services, CPAs must verify all tax return information submitted by reviewing client documentation.

In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer.

Identify which of the following statements is false.

Which regulation deals with Code Section 165?

Does Title 26 contain statutory provisions dealing only with income taxation? Explain.

If the U.S. District Court for Rhode Island, the Tax Court, and the Eleventh Circuit have all ruled on a particular issue, then what precedents have been set for which courts in the future?

Which of the following statements about the Statements on Standards for Tax Services is true?

Tax planning is not an integral part of open- fact situations.

Identify which of the following statements is false.

Ralph's business records were lost as a result of Hurricane Katrina. CPA Jane prepares Ralph's return using estimates. What do the Statements on Standards for Tax Services state about the use of estimates?

Assume that you want to read a description of a particular area of the law, along with one or more illustrations of how that law is applied. You will not find that type of material in

The term "tax law" includes

Your client wants to deduct commuting expenses on his tax return. You explain to the client that there is no legal authority allowing this deduction. The client, however, continues to insist on this action. What guidance do the Statements on Standards for Tax Services provide in this dilemma?

Investigation of a tax problem that involves a closed- fact situation means that

Describe the format of a client memo.

Identify which of the following statements is false.

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?

When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the court is following the

During the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters

Exam 1: Tax Research

Are letter rulings of precedential value to third parties?

According to the Statements on Standards for Tax Services, CPAs must verify all tax return information submitted by reviewing client documentation.

In all situations, tax considerations are of primary importance. Do you agree or disagree? Support your answer.

Identify which of the following statements is false.

Which regulation deals with Code Section 165?

Does Title 26 contain statutory provisions dealing only with income taxation? Explain.

If the U.S. District Court for Rhode Island, the Tax Court, and the Eleventh Circuit have all ruled on a particular issue, then what precedents have been set for which courts in the future?

Which of the following statements about the Statements on Standards for Tax Services is true?

Tax planning is not an integral part of open- fact situations.

Identify which of the following statements is false.

Ralph's business records were lost as a result of Hurricane Katrina. CPA Jane prepares Ralph's return using estimates. What do the Statements on Standards for Tax Services state about the use of estimates?

Assume that you want to read a description of a particular area of the law, along with one or more illustrations of how that law is applied. You will not find that type of material in

The term "tax law" includes

Your client wants to deduct commuting expenses on his tax return. You explain to the client that there is no legal authority allowing this deduction. The client, however, continues to insist on this action. What guidance do the Statements on Standards for Tax Services provide in this dilemma?

Investigation of a tax problem that involves a closed- fact situation means that

Describe the format of a client memo.

Identify which of the following statements is false.

The tax statutes with the popular name "The Internal Revenue Code of 1986" are contained in which Title of the Code?

When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the court is following the

During the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Filters