Chapter 1 Study Guide

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Chapter C:1

Tax Research

True-False

C:1-1.Tax planning is not an integral part of open-fact situations. F, p. C:1-2.

C:1-2. The Internal Revenue Code of 1986 contains the current version of the tax law. T, p. C:1-8.

C:1-3.Regulations issued prior to the latest tax legislation dealing with a specific Code section are still effective to the extent they do not conflict with the provisions in the new legislation. T, pp. C:1-8 and C:1-9.

C:1-4.Final regulations have almost the same legislative weight as the IRC. T, p. C:1-10.

C:1-5.A revenue ruling is issued by the Internal Revenue Service only in response to a verbal inquiry by a taxpayer. F, p. C:1-12.

C:1-6.Taxpayers must pay the disputed tax prior to filing a case with the Tax Court. F, p. C:1-14.

C:1-7. Appeals from the U.S. Tax Court are to the Court of Appeals for the Federal Circuit. F, p. C:1-15, Figure C:1-4

C:1-8. Appeals from the Court of Appeals go to the Supreme Court, which decides what cases to hear. T, p. C:1-15.

C:1-9. A citator enables tax researchers to locate authorities which have been cited a particular case. T, p. C:1-28.

C:-10. According to the Statements on Standards for Tax Services, CPAs must verify all tax return information submitted by reviewing client documentation. F, p. C:1-35.

Multiple-Choice

C:1-11.When a taxpayer contacts a tax advisor requesting advice as to the most advantageous way to dispose of a stock, the tax advisor is faced with a.a restricted-fact situation.
b.a closed-fact situation.
c.an open-fact situation.
d.a recognized-fact situation.

c, p. C:1-2

C:1-12.Investigation of a tax problem that involves a closed-fact situation means that a.the client's transactions have already occurred and the tax questions must now be resolved. b.the client's tax return has yet to be filed.

c.future events may be planned and controlled.
d.research is primarily concerned with applying the law to the facts as they exist.

a, p. C:1-2.

C:1-13.Identify which of the following statements is true.
a.Tax planning is an integral part of both closed-fact situations and open-fact situations. b. The first step in conducting tax research is to clearly understand the issues involved. c.The Statements on Standards for Tax Services recommend that only written tax advice be provided to the client in all situations. d.All are false.

c, pp. C:1-2, C:1-3, and C:1-5.

C:1-14.The term "tax law" includes
a.legislation.
b.treasury regulations.
c.judicial decisions.
d.all of the above

d, p. C:1-7.

C:1-15.Identify which of the following statements is false.
a.When tax advisors speak of the "tax law," they usually have in mind just the Internal Revenue Code. b. Members from both the House and the Senate are on the Conference Committee. c. Records of committee hearings are helpful in determining Congressional intent. d.All are false.

a, p. C:1-7.
C:1-16.The committee which is responsible for holding hearings on tax legislation for the House of Representatives is the a.Finance Committee.
b.Joint Committee on Taxation.
c.Conference Committee.
d. Ways and Means Committee.

d, p. C:1-7.

C:1-17.A tax bill introduced in the House of Representatives is then a.referred to the House Ways and Means Committee for hearings and approval. b.referred to the entire House for hearings.

c.voted upon by the entire House.
d.forwarded to the Senate Finance Committee for consideration.

a, p. C:1-7.

C:1-18.The Senate equivalent of the House Ways and Means Committee is the Senate a.Finance Committee.
b.Ways and Means Committee.
c.Tax Committee.
d.Joint Conference Committee.

a, p. C:1-7.

C:1-19.Which of the following steps, related to a tax...
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