Question 1

To effectively convey the results of a tax research project, the practitioner must:

Accepted Answer

A) consult IRS officials 
B) apply professional judgment and communication skills 
C) have an informal discussion with the client 
D) all of these are correct

Question 2

You are preparing for an audit with an IRS agent for an important client. Your research has uncovered several favorable rulings and court decisions. What are the key points that should guide you in evaluating sources of the law?

Accepted Answer

The answer of You are preparing for an audit with...

Question 3

In slides and other visual aids, fancy fonts and many colors should be used to create a more sophisticated presentation.

Accepted Answer

A) True 
 B)False

Question 4

Well-written case opinions typically provide a summary of the evolution of the pertinent tax law and a discussion of the parties' competing interpretations.

Accepted Answer

A) True 
 B)False

Question 5

Public speaking is an important part of the tax practitioner's professional life and can be an accurate predictor of success.

Accepted Answer

A) True 
 B)False

Question 6

By far the most common form of substantive communication between the tax professional and his or her client is a:

Accepted Answer

A) file memo 
B) text message 
C) tax-oriented blog 
D) telephone call or e-mail

Question 7

The heart of tax research communication is:

Accepted Answer

A) the file memo 
B) primary source material 
C) secondary source material 
D) network links

Question 8

Which of the following statements is CORRECT with respect to conflicting tax laws?

Accepted Answer

A) Revenue Rulings and Revenue Procedures seldom are held to be invalid by a court. 
B) Regulations are frequently held to be invalid by a court. 
C) The decisions of courts that are higher in the judicial hierarchy should receive additional precedential weight. 
D) All of the these are correct.

Question 9

In client files, a practitioner should include all of the following types of underlying legal authority EXCEPT:

Accepted Answer

A) underlined or highlighted portions of important legal documents 
B) case, regulation, and ruling briefs that are pertinent to the file memo 
C) a listing of legal citations and computer files that would show a researcher's analysis 
D) all of this information should be included in a client file

Question 10

The two major elements of a client file are:

Accepted Answer

A) invoices and full-text court opinions 
B) internal firm memos and invoices 
C) a client letter and a research memo 
D) a written summary of telephone conversations and e-mails

Question 11

Other factors being equal, decisions of which of the following Circuit Courts should be given additional weight when evaluating sources?

Accepted Answer

A) the Second and Ninth Circuits 
B) the Sixth and Ninth Circuits 
C) the Federal and First Circuits 
D) all the these courts have equal weight

Question 12

Identify five types of tax-related communications.

Accepted Answer

The answer of Identify five types of tax-related communications....

Question 13

All of the following statements are CORRECT with regard to the weight of authority of tax documents EXCEPT:

Accepted Answer

A) District and Circuit Court opinions have direct bearing on the taxpayer only if they were issued in the taxpayer's jurisdiction. 
B) The opinions of the Court of Federal Claims and Tax Court are not binding on a taxpayer if they were issued with respect to a taxpayer who lives in a different jurisdiction. 
C) Revenue Rulings and Revenue Procedures are frequently modified or held to be invalid by courts. 
D) Older court decisions should be given a declining degree of importance unless they are Supreme Court cases.

Question 14

Even if all of the judicial precedent supports a taxpayer's position, the court still may hold against the taxpayer.

Accepted Answer

A) True 
 B)False

Question 15

Amy and Frank got married and they have approached you seeking your views about the gift tax and income tax consequences on the following facts.??As per the prenuptial agreement, Amy gave to Frank $100,000 of appreciated stock on the morning of their wedding. Amy's basis in the stock was $35,000. Under the terms of the agreement, Frank surrendered all other marital rights and claims to Amy's assets in exchange for these securities. Both Frank and Amy are residents of Arizona.??The file memo you prepared contains the following legal conclusions, based on controlling authority:•IRC Section 2501 imposes a tax on the transfer of property by gift, not when it is received by the donee, but upon the transfer. The donor is taxed, not the donee.?•The Supreme Court has held that prenuptial transfers in relinquishment of marital rights are not adequate and full consideration for the transfer of property. So, the transfer is treated as a gift.?•Since the prenuptial agreement is enforceable only after the marriage, the transfer has not taken place until after the marriage occurred. Thus, the transfer is eligible for the gift tax marital deduction.?•Although the transaction resulted in a gift, no gift tax is imposed due to the application of the annual exclusion and the unlimited gift tax marital deduction.?•Neither party recognizes gross income upon release of the marital rights. Gross income does not include the value of property acquired by gift.?•The donee takes the donor's income tax basis in the transferred property.Based on the information provided above, draft a client letter to an unsophisticated client explaining the gift tax consequences and the income tax consequences of the stock transfer.

Accepted Answer

The answer of Amy and Frank got married and they...

Question 16

Initial determinations of the facts of a tax issue are likely to be incomplete because:

Accepted Answer

A) taxpayers tend to see the dispute only from their side 
B) taxpayers not being trained in the tax law may be unable to determine which facts are important to convey 
C) fact-gathering often depends on the reliability of the memory of taxpayers 
D) all of these are correct

Question 17

Which of the following statements is INCORRECT regarding letters to unsophisticated clients?

Accepted Answer

A) Citations to controlling authority should not be included. 
B) The letter should give the answer in the first paragraph. 
C) A practitioner should always attach a file memo to give the client more detailed information. 
D) All of these are correct.

Question 18

Effective written business communication often makes use of which of the following guidelines?

Accepted Answer

A) Write in direct, active voice and use short sentences. Organize your writing in paragraphs and use transition words to help the reader follow your logic and thought process. 
B) Consider the reader--all audiences are not the same. Writing for another tax professional is very different from writing for a client who is not skilled in tax law. 
C) Be organized.Make sure you understand the objective of your communication and organize your thoughts and your message before you start to write. 
D) All of these are correct.

Question 19

Identify the major elements of a client letter, and briefly discuss the difference between a letter to a sophisticated client and to an unsophisticated client.

Accepted Answer

The answer of Identify the major elements of a client...

Question 20

Tax-related communications can come in many forms, for example:

Accepted Answer

A) a posting on a general, business, or tax-oriented blog 
B) a speech to a general audience 
C) an article for publication in a professional journal 
D) an appearance on a broadcast with more or less serious tone 
E) all of these are correct

Exam 11: Communicating Research Results

To effectively convey the results of a tax research project, the practitioner must:

You are preparing for an audit with an IRS agent for an important client. Your research has uncovered several favorable rulings and court decisions. What are the key points that should guide you in evaluating sources of the law?

In slides and other visual aids, fancy fonts and many colors should be used to create a more sophisticated presentation.

Well-written case opinions typically provide a summary of the evolution of the pertinent tax law and a discussion of the parties' competing interpretations.

Public speaking is an important part of the tax practitioner's professional life and can be an accurate predictor of success.

By far the most common form of substantive communication between the tax professional and his or her client is a:

The heart of tax research communication is:

Which of the following statements is CORRECT with respect to conflicting tax laws?

In client files, a practitioner should include all of the following types of underlying legal authority EXCEPT:

The two major elements of a client file are:

Other factors being equal, decisions of which of the following Circuit Courts should be given additional weight when evaluating sources?

Identify five types of tax-related communications.

All of the following statements are CORRECT with regard to the weight of authority of tax documents EXCEPT:

Even if all of the judicial precedent supports a taxpayer's position, the court still may hold against the taxpayer.

Initial determinations of the facts of a tax issue are likely to be incomplete because:

Which of the following statements is INCORRECT regarding letters to unsophisticated clients?

Effective written business communication often makes use of which of the following guidelines?

Identify the major elements of a client letter, and briefly discuss the difference between a letter to a sophisticated client and to an unsophisticated client.

Tax-related communications can come in many forms, for example: