Question 1

When the House and Senate versions of a tax bill are not in agreement, the disagreements are resolved by the
A)Ways and Means Committee.
B)Mediation Committee.
C)Revenue Committee.
D)Conference Committee.

Accepted Answer

Disagreements between the House and Senate versions of a tax bill are resolved through a Conference Committee, which is made up of members from both chambers who seek to create a compromise bill that both sides can agree on.

Question 2

Which of the following steps, related to a tax bill, occurs first?
A)signature or veto by the President of the United States
B)consideration by the Senate Finance Committee
C)consideration by the entire Senate
D)consideration by the House Ways and Means Committee

Accepted Answer

The first step in the process of passing a tax bill is consideration by the House Ways and Means Committee, where the bill is drafted and debated.

Question 3

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

Accepted Answer

Tax planning is an integral part of open-fact situations as it involves strategically managing financial transactions and activities in order to minimize tax liability.

Question 4

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.

Accepted Answer

According to the legislative process, bills introduced in the House of Representatives are first referred to the relevant committee, which is the Ways and Means Committee for tax bills. The committee then holds hearings to review and make any necessary changes to the bill before deciding whether to approve it and send it to the full House for consideration. Therefore, choice A is the correct answer.

Question 5

Appeals from the U.S. Tax Court are to the Court of Appeals for the Federal Circuit.

Accepted Answer

Appeals from the U.S. Tax Court are typically made to the United States Court of Appeals for the circuit in which the taxpayer resides, not directly to the Court of Appeals for the Federal Circuit.

Question 6

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 of the above are false.

Accepted Answer

The answer of Identify which of the following statements is...

Question 7

The term "tax law" includes
A)legislation.
B)treasury regulations.
C)judicial decisions.
D)all of the above

Accepted Answer

Tax law includes legislation, Treasury regulations, and judicial decisions. Therefore, option D is the most accurate choice.

Question 8

Final regulations have almost the same legislative weight as the IRC.

Accepted Answer

Final regulations are issued by the IRS and have gone through a notice and comment period, which gives them almost the same legislative weight as the Internal Revenue Code (IRC). This means that they carry the force of law and must be followed by taxpayers and the IRS.

Question 9

The committee that 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.

Accepted Answer

The Ways and Means Committee is one of the oldest and most powerful committees in the House of Representatives. It has jurisdiction over all taxation, tariffs, and other revenue-raising measures. The Committee is responsible for holding hearings on tax legislation and making recommendations to the full House of Representatives. The Committee also has oversight over the Internal Revenue Service (IRS) and the Social Security Administration. None of the other options are specifically responsible for holding hearings on tax legislation for the House of Representatives.

Question 10

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.

Accepted Answer

The Senate equivalent of the House Ways and Means Committee is called the Senate Finance Committee. This committee is responsible for overseeing taxation, revenue, and other financial matters in the Senate.

Question 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.

Accepted Answer

The taxpayer's request for advice as to the most advantageous way to dispose of a stock does not necessarily provide all the necessary facts, making it an open-fact situation where further inquiry and analysis is necessary to determine the most tax-efficient option. A restricted-fact situation would involve a limited set of facts, while a closed-fact situation would involve a completed transaction with all the relevant facts available, and a recognized-fact situation would involve commonly accepted or well-established facts.

Question 12

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

Accepted Answer

According to the Statements on Standards for Tax Services, CPAs are not required to verify all tax return information by reviewing client documentation. They can rely on client-provided information unless it appears incorrect, incomplete, or inconsistent.

Question 13

A citator enables tax researchers to locate authorities (e.g., cases and IRS pronouncements)that have cited a particular case.

Accepted Answer

A citator is a tool used to locate authorities that have cited a particular case or statute, enabling tax researchers to track the development of the law over time.

Question 14

Taxpayers must pay the disputed tax prior to filing a case with the Tax Court.

Accepted Answer

Taxpayers are not required to pay the disputed tax prior to filing a case with the Tax Court, but they may have to pay the tax if they choose to appeal a decision made by the court.

Question 15

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.

Accepted Answer

A closed-fact situation refers to a situation where the relevant facts have already occurred and cannot be changed. Therefore, investigation of a tax problem in this context would involve resolving the tax questions based on the already completed transactions. Options B and C do not apply to a closed-fact situation, as no tax return is pending and future events cannot be altered. Option D is partially correct, as research would involve applying the law to the existing facts, but it is not the primary concern in a closed-fact situation - resolving the tax questions is the primary concern.

Question 16

A revenue ruling is issued by the Internal Revenue Service only in response to a verbal inquiry by a taxpayer.

Accepted Answer

A revenue ruling is a public statement issued by the IRS that provides guidance to taxpayers on how to comply with tax laws. It is typically issued in response to a significant and recurring question or issue that has been raised by taxpayers, tax professionals or other stakeholders. It is not issued in response to a verbal inquiry by a single taxpayer, but rather serves as official guidance for all taxpayers who may face a similar issue.

Question 17

The Internal Revenue Code of 1986 contains the current version of the tax law.

Accepted Answer

The Internal Revenue Code of 1986 is the current version of the tax law in the United States.

Question 18

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.

Accepted Answer

Regulations issued prior to the latest tax legislation are still effective unless they conflict with the new legislation.

Question 19

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 of the above are false.

Accepted Answer

The answer of Identify which of the following statements is...

Question 20

Appeals from the Court of Appeals go to the Supreme Court under a writ of certiorari. The Supreme Court decides whether or not they will hear the case.

Accepted Answer

This is correct. Appeals from the Court of Appeals go to the Supreme Court under a writ of certiorari, and the Supreme Court has the discretion to decide whether or not to hear the case.

Quiz 15: Tax Research

When the House and Senate versions of a tax bill are not in agreement, the disagreements are resolved by the

Which of the following steps, related to a tax bill, occurs first?

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

A tax bill introduced in the House of Representatives is then

Appeals from the U.S. Tax Court are to the Court of Appeals for the Federal Circuit.

Identify which of the following statements is true.

The term "tax law" includes

Final regulations have almost the same legislative weight as the IRC.

The committee that is responsible for holding hearings on tax legislation for the House of Representatives is the

The Senate equivalent of the House Ways and Means Committee is the Senate

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