Question 1

Temporary regulations have more authoritative weight than revenue rulings.

Accepted Answer

A) True 
 B)False

Question 2

A tax practitioner can avoid IRS penalty relating to a tax return position:

Accepted Answer

A) if the position is frivolous and disclosed on the tax return. 
B) if the position has a realistic possibility of being sustained by the IRS or courts. 
C) if there is substantial authority to support the position. 
D) if the position has a reasonable basis and is not disclosed on the tax return. 
E) None of the choices are correct. 
A) if the position is frivolous and disclosed on the tax return. 
B) if the position has a realistic possibility of being sustained by the IRS or courts. 
C) if there is substantial authority to support the position. 
D) if the position has a reasonable basis and is not disclosed on the tax return. 
E) None of the choices are correct.

Question 3

Which of the following is not a common tool used in conducting tax research?

Accepted Answer

A) citator. 
B) annotated tax service. 
C) topical tax service. 
D) keyword search. 
E) None of the choices are correct. 
A) citator. 
B) annotated tax service. 
C) topical tax service. 
D) keyword search. 
E) None of the choices are correct.

Question 4

Andy filed a fraudulent 2019 tax return on May 1,2020.The statute of limitations for IRS assessment on Andy's 2019 tax return should end:

Accepted Answer

A) May 1st,2023. 
B) April 15th,2023. 
C) May 1st,2026. 
D) April 15th,2026. 
E) None of the choices are correct. 
A) May 1st,2023. 
B) April 15th,2023. 
C) May 1st,2026. 
D) April 15th,2026. 
E) None of the choices are correct.

Question 5

For the following taxpayers,please recommend the most advantageous trial - level court(s)to litigate a tax issue with the IRS.
a.Joe is litigating a tax issue with the IRS that is considered a question of fact (i.e.,the answers depend on the facts of the case).There is not a lot of authority on point for this case,but Joe has a very appealing story to justify his position that is likely to be viewed sympathetically by his peers.
b.The Circuit Court of Appeals for the Federal Circuit recently issued an opinion that is very favorable to the issue that Jesse plans to litigate with the IRS.
c.The Circuit Court of Appeals for the Federal Circuit recently issued an opinion that is not favorable to the issue that Hank plans to litigate with the IRS.
d.The 7th Circuit (where Elizabeth resides)recently issued an opinion that is very favorable to the issue that Elizabeth plans to litigate with the IRS.

Accepted Answer

(a)U.S.District Court because it is the

Question 6

Which of the following is not a common method that the IRS uses to select returns for audit?

Accepted Answer

A) DIF system. 
B) Tax Select system. 
C) Information matching. 
D) Document perfection. 
E) None of the choices are correct. 
A) DIF system. 
B) Tax Select system. 
C) Information matching. 
D) Document perfection. 
E) None of the choices are correct.

Question 7

Because the U.S.District Court hears a broader set of cases,decisions by the U.S.District Court may be considered to have more authoritative weight than those by the U.S.Court of Federal Claims.

Accepted Answer

A) True 
 B)False

Question 8

Dominic earned $1,500 this year,and his employer withheld $200 of federal income tax from his salary.Assuming that Dominic is single,30 years old,and will have zero tax liability this year,he:

Accepted Answer

A) is required to file a tax return. 
B) is not required to file a tax return but should file a return anyway. 
C) is required to file a tax return but should not file because he owes no tax. 
D) is not required to file a tax return and should not file a return. 
E) None of the choices are correct. 
A) is required to file a tax return. 
B) is not required to file a tax return but should file a return anyway. 
C) is required to file a tax return but should not file because he owes no tax. 
D) is not required to file a tax return and should not file a return. 
E) None of the choices are correct.

Question 9

Which of the following has the lowest authoritative weight?

Accepted Answer

A) Legislative regulation. 
B) Private letter ruling. 
C) Revenue ruling. 
D) Interpretative regulation. 
E) Revenue procedure. 
A) Legislative regulation. 
B) Private letter ruling. 
C) Revenue ruling. 
D) Interpretative regulation. 
E) Revenue procedure.

Question 10

Which of the following is not considered a secondary authority?

Accepted Answer

A) Textbook. 
B) Private letter ruling. 
C) Tax article. 
D) Tax service. 
E) None of the choices are correct. 
A) Textbook. 
B) Private letter ruling. 
C) Tax article. 
D) Tax service. 
E) None of the choices are correct.

Question 11

For the 2019 tax returns,indicate when the statute of limitations expires and why.
a.Simon filed his tax return on April 10,2020.
b.Billy and Barbara filed their tax returns late on December 1,2020.
c.Pearson earns a living through various illegal activities.He filed his tax return on March 14,2020,but did not report his illegal income on his tax return.
d.Luther filed his tax return on July 17,2020,but has accidentally underreported his gross income by 20 percent.

Accepted Answer

(a)April 15,2023.The statute of limitati

Question 12

Carey was researching a tax issue and located what appears to be a favorable IRS regulation.He knows that regulations serve different purposes and are issued in different forms.Which purpose and which form of regulation would provide Carey the most confidence that he has found an authority that carries a lot of weight for the long term? How could Carey check the status of this regulation?

Accepted Answer

Regulations are the Treasury Department'

Question 13

In researching a question of fact,the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

Accepted Answer

A) True 
 B)False

Question 14

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to a proposed IRS adjustment on the taxpayer's income tax return.

Accepted Answer

A) True 
 B)False

Question 15

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.

Accepted Answer

A) True 
 B)False

Question 16

The IRS has recently completed its audit of Lorene's corporation.As a tax novice,she has very little understanding regarding the audit process and what happens next.Describe the post-audit process for Lorene and identify her options.

Accepted Answer

After the examination,the IRS agent prov

Question 17

Caitlin is a tax manager for an accounting firm,and Duff is a first-year staff accountant.Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.

Accepted Answer

A tax researcher's ability to identify i

Question 18

Chris and Chuck were recently debating whether the Internal Revenue Code is "logical." Chris offers that she has briefly reviewed the Code and could hardly understand its organizational structure,if there is one.Please describe the basic organization of the Code and how understanding its organization may be especially beneficial to the tax researcher.

Accepted Answer

The Internal Revenue Code is segregated

Question 19

If Paula requests an extension to file her individual tax return in a timely manner,the latest she could file her return without a failure-to-file penalty is:

Accepted Answer

A) September 15th. 
B) October 15th. 
C) August 15th. 
D) November 15th. 
E) None of the choices are correct. 
A) September 15th. 
B) October 15th. 
C) August 15th. 
D) November 15th. 
E) None of the choices are correct.

Question 20

If a taxpayer is due a refund,she does not have to file a tax return.

Accepted Answer

A) True 
 B)False

Exam 2: Tax Compliance,the Irs,and Tax Authorities

Temporary regulations have more authoritative weight than revenue rulings.

A tax practitioner can avoid IRS penalty relating to a tax return position:

Which of the following is not a common tool used in conducting tax research?

Andy filed a fraudulent 2019 tax return on May 1,2020.The statute of limitations for IRS assessment on Andy's 2019 tax return should end:

Which of the following is not a common method that the IRS uses to select returns for audit?

Because the U.S.District Court hears a broader set of cases,decisions by the U.S.District Court may be considered to have more authoritative weight than those by the U.S.Court of Federal Claims.

Dominic earned $1,500 this year,and his employer withheld $200 of federal income tax from his salary.Assuming that Dominic is single,30 years old,and will have zero tax liability this year,he:

Which of the following has the lowest authoritative weight?

Which of the following is not considered a secondary authority?

In researching a question of fact,the researcher should focus her efforts on identifying authorities with fact patterns similar to her client's facts.

The "30-day" letter gives the taxpayer the opportunity to request an appeals conference or agree to a proposed IRS adjustment on the taxpayer's income tax return.

An acquiescence indicates that the IRS lost a court case and that it has decided to follow the court's ruling in the future.

The IRS has recently completed its audit of Lorene's corporation.As a tax novice,she has very little understanding regarding the audit process and what happens next.Describe the post-audit process for Lorene and identify her options.

Caitlin is a tax manager for an accounting firm,and Duff is a first-year staff accountant.Describe the differences in the manner in which Caitlin and Duff may identify research issues and in general how one may identify research questions.

If Paula requests an extension to file her individual tax return in a timely manner,the latest she could file her return without a failure-to-file penalty is:

If a taxpayer is due a refund,she does not have to file a tax return.

An Introduction to Tax

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview,dependents,and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters