Question 1

The encouragement of private-sector pension plans can be justified under the encouragement of certain industries.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following refers to a trial court rather than an appellate court decision?

Accepted Answer

A)   Forgeus v. Comm., 6 B.T.A. 291 (1927) .
B)   Farris v. Comm., 222 F.2d 320 (CA-10, 1955) .
C)   Danville Plywood Corp., 899 F.2d 3 (Fed Cir. 1990) .
D)   Boehm v. Comm., 326 U.S. 287 (1945) .
E)   None of the above.F) B) and E)
G) All of the above

Question 3

Federal tax legislation generally originates in what body?

Accepted Answer

A)   Internal Revenue Service.
B)   Senate Finance Committee.
C)   House Ways and Means Committee.
D)   House Taxation Committee.
E)   None of the above.F) C) and E)
G) None of the above

Question 4

Which is a primary source of tax law?

Accepted Answer

A)   Article by a Federal judge in Harvard Law Review.
B)   J.W. Yarbo v. Comm., 737 F. 2d 479 (CA-5, 1984) .
C)   Determination letter.
D)   Letter ruling.
E)   All of the above are primary sources.F) None of the above
G) D) and E)

Question 5

Appeals from the Court of Federal Claims go to the U.S. Supreme Court.

Accepted Answer

A) True 
 B)False

Question 6

Which of these notations would appear after a U.S. Tax Court citation if the IRS disagrees with the decision?

Accepted Answer

A)   Rev'd 935 F.2d 203 (1991) .
B)   Nonacq. 1979-1 C.B. 1.
C)   Cert. den. 361 U.S. 875 (1959) .
D)   Acq. 1990-1 C.B. 2.
E)   None of the above.F) A) and C)
G) B) and E)

Question 7

Determination letters usually involve proposed transactions.

Accepted Answer

A) True 
 B)False

Question 8

Which state is not a community property state?

Accepted Answer

A)   Arizona.
B)   Texas.
C)   New Mexico
D)   Virginia
E)   None of the above.F) A) and E)
G) A) and C)

Question 9

Which trial court decision is generally less authoritative?

Accepted Answer

A)   U.S. District Court.
B)   U.S. Tax Court.
C)   U.S. Court of Federal Claims.
D)   Small Cases Division of the Tax Court.
E)   All of the above are the same.F) D) and E)
G) A) and B)

Question 10

Many states have balanced budgets because laws or constitutional amendments preclude deficit spending.

Accepted Answer

A) True 
 B)False

Question 11

Treasury Decisions are issued by the Treasury Department to promulgate new Regulations.

Accepted Answer

A) True 
 B)False  True

Question 12

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Accepted Answer

A) True 
 B)False  False

Question 13

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

Accepted Answer

A)   Arm's length concept.
B)   Continuity of interest concept.
C)   Tax benefit rule.
D)   Substance over form concept.
E)   None of the above.F) A) and D)
G) B) and C)

Question 14

"Legislative regulations" are stronger than "interpretative" regulations.

Accepted Answer

A) True 
 B)False

Question 15

The Golsen rule has been overturned.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an administrative source of tax law?

Accepted Answer

A)   Joint Conference Committee Report.
B)   Rev. Rul. 2010-19.
C)   Section 12(a)  of the Internal Revenue Code.
D)   All of the above.
E)   None of the above.F) A) and D)
G) B) and D)

Question 17

Which state is located in the jurisdiction of the Fifth Court of Appeals?

Accepted Answer

A)   Louisiana.
B)   California.
C)   New York.
D)   South Carolina.
E)   None of the above.F) A) and D)
G) C) and E)

Question 18

The Internal Revenue Code is a compilation of Federal tax legislation that appears in Title 26 of the United States Code.

Accepted Answer

A) True 
 B)False

Question 19

Which provision could best be justified as a means of controlling the economy?

Accepted Answer

A)   Write-off of research and development expenditures.
B)   The § 179 immediate write­off of depreciable capital expenditures.
C)   Amortization of pollution control facilities.
D)   The rehabilitation tax credit.
E)   None of the above.F) C) and E)
G) A) and B) B

Question 20

Determine the incorrect citation:

Accepted Answer

A)   TAM 20002704.
B)   George W. Guill, 112 T.C. , No. 22 (1999) .
C)   John H. Wong, T.C. Summary Opinion 2009-152.
D)   Rev. Rul. 98-32, 1998-25 I.R.B. 4.
E)   None of the above.F) D) and E)
G) A) and B)

Exam 1: Understanding and Working With the Federal Tax Law

The encouragement of private-sector pension plans can be justified under the encouragement of certain industries.

Correct AnswerverifiedShow Answer

Which of the following refers to a trial court rather than an appellate court decision?

Correct AnswerverifiedShow Answer

Federal tax legislation generally originates in what body?

Correct AnswerverifiedShow Answer

Which is a primary source of tax law?

Correct AnswerverifiedShow Answer

Appeals from the Court of Federal Claims go to the U.S. Supreme Court.

Correct AnswerverifiedShow Answer

Which of these notations would appear after a U.S. Tax Court citation if the IRS disagrees with the decision?

Correct AnswerverifiedShow Answer

Determination letters usually involve proposed transactions.

Correct AnswerverifiedShow Answer

Which state is not a community property state?

Correct AnswerverifiedShow Answer

Which trial court decision is generally less authoritative?

Correct AnswerverifiedShow Answer

Many states have balanced budgets because laws or constitutional amendments preclude deficit spending.

Correct AnswerverifiedShow Answer

Treasury Decisions are issued by the Treasury Department to promulgate new Regulations.

Correct AnswerverifiedTrue

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Correct AnswerverifiedFalse

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

Correct AnswerverifiedShow Answer

"Legislative regulations" are stronger than "interpretative" regulations.

Correct AnswerverifiedShow Answer

The Golsen rule has been overturned.

Correct AnswerverifiedShow Answer

Which of the following is an administrative source of tax law?

Correct AnswerverifiedShow Answer

Which state is located in the jurisdiction of the Fifth Court of Appeals?

Correct AnswerverifiedShow Answer

The Internal Revenue Code is a compilation of Federal tax legislation that appears in Title 26 of the United States Code.

Correct AnswerverifiedShow Answer

Which provision could best be justified as a means of controlling the economy?

Correct AnswerverifiedB

Determine the incorrect citation:

Correct AnswerverifiedShow Answer

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True

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False

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B

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