Tax 2 Final Exam 2023/2024 Latest Test
Questions With Verified Solutions
Statutory Sources of Tax Law - Answer -Constitution (Articles I, sections 7,8, and 10)
- Tax Treaties: agreements between countries to mitigate the double taxation of taxpayers, renders mutual assistance in tax enforcement, neither a tax law or treaty takes general precedence (when there is a direct conflict, the most recent item will take precedence)
-Internal Revenue Code: codification of the federal tax law provisions in a logical sequence (1939,1954, and 1986)
Process for Tax Bills - Answer 1. House Ways and Means Committee
2. Consideration by the House of Representatives
3. Senate Finance Committee
4. Consideration by the state
5. Either joint conference committee and consideration by the house and senate or approval or veto by the president
6. Incorporation into the Internal Revenue Code
Administrative Sources of Tax Law - Answer -Treasury Department Regulations
-Revenue Rulings
-Revenue Procedures
-Letter Rules
-Other administrative pronouncements
Regulations - Answer Issued by the US Treasury Department, provide general interpretations and guidance in applying the Code, issued as treasury decisions
Location: Federal register
Authority: Force and effect of law
Temporary Regulations - Answer Issued when guidance needed quickly, same authoritative value as final regulations
Location: Federal Register, Internal Revenue Bulletin, Cumulative Bulletin
Authority: May be cited as a precedent
Proposed Regulations - Answer Preview of final regulations
Location: Federal Register, Internal Revenue Bulletin, Cumulative Bulletin
Authority: Preview of Final Regulation
Revenue Rulings - Answer Officially issued by the National Office of the IRS, provide one or more examples of how the IRS would apply a law to a specific fact situations, lesser legal force than regulations
-Carry less weight than Treasury Department Regulations, not substantial authority in court disputes Location: Internal Revenue Bulletin (issued weekly)
Authority: Do not have the force and effect of law
Revenue Procedures - Answer Concerned with internal management practices and procedures of the IRS, for example- how to request a change in accounting method
Location: Cumulative Bulletin (published weekly)
General Council Memoranda - Answer Location: Tax Analysts' Tax notes; Thomson Reuters
Authority: May not be cited as a precedent
Technical Advice Memoranda - Answer Location: Checkpoint, Commerce Clearing House
Letter Rulings - Answer Offer guidance to taxpayer on how a transaction will be taxed before proceeding with it, issued for a fee upon a taxpayer's request by the National Office of the IRS, describe how the IRS will treat a proposed transaction for tax purposes, only applies to the taxpayer who asks for and obtains the ruling, limited to restricted, preannounced areas of taxation
Location: Thomson Reuters and Commerce Closing House tax services
Authority: Applicable only to taxpayer addressed, no precedential force
Rev. Rule. 2018-22, 2018-34 I.R.B. 308. - Answer Revenue Rulings number 22, appearing on page 308 of the 34th weekly issue of the Internal Revenue Bulletin for 2018
Ltr.Rul.201822015 - Answer 15th ruling during the 22nd week of 2018
Other Administrative Pronouncements - Answer -Treasury Decisions
- Determination Letters
- General Counsel Memoranda, Technical Advice Memoranda, Internal Legal Memoranda, Field Service Advice Memoranda *The IRS indicates that they may not be cited as precedents by taxpayers
Treasury Decisions - Answer Issued by the Treasury department to: - promulgate new or amend existing regulations
- announce position of the Government on selected court decisions
-published in the Internal Revenue Bulletin
Determination Letters - Answer -Issued by an IRS Area Director at taxpayer's request
-Usually involve completed transactions
-Not published, made known only to party making the request
Trial Courts - Answer -US Tax Court (small cases division- only hears cases involving amounts of $50,000 or less, no appeal from this division of the US tax court) -US District Court
Questions With Verified Solutions
Statutory Sources of Tax Law - Answer -Constitution (Articles I, sections 7,8, and 10)
- Tax Treaties: agreements between countries to mitigate the double taxation of taxpayers, renders mutual assistance in tax enforcement, neither a tax law or treaty takes general precedence (when there is a direct conflict, the most recent item will take precedence)
-Internal Revenue Code: codification of the federal tax law provisions in a logical sequence (1939,1954, and 1986)
Process for Tax Bills - Answer 1. House Ways and Means Committee
2. Consideration by the House of Representatives
3. Senate Finance Committee
4. Consideration by the state
5. Either joint conference committee and consideration by the house and senate or approval or veto by the president
6. Incorporation into the Internal Revenue Code
Administrative Sources of Tax Law - Answer -Treasury Department Regulations
-Revenue Rulings
-Revenue Procedures
-Letter Rules
-Other administrative pronouncements
Regulations - Answer Issued by the US Treasury Department, provide general interpretations and guidance in applying the Code, issued as treasury decisions
Location: Federal register
Authority: Force and effect of law
Temporary Regulations - Answer Issued when guidance needed quickly, same authoritative value as final regulations
Location: Federal Register, Internal Revenue Bulletin, Cumulative Bulletin
Authority: May be cited as a precedent
Proposed Regulations - Answer Preview of final regulations
Location: Federal Register, Internal Revenue Bulletin, Cumulative Bulletin
Authority: Preview of Final Regulation
Revenue Rulings - Answer Officially issued by the National Office of the IRS, provide one or more examples of how the IRS would apply a law to a specific fact situations, lesser legal force than regulations
-Carry less weight than Treasury Department Regulations, not substantial authority in court disputes Location: Internal Revenue Bulletin (issued weekly)
Authority: Do not have the force and effect of law
Revenue Procedures - Answer Concerned with internal management practices and procedures of the IRS, for example- how to request a change in accounting method
Location: Cumulative Bulletin (published weekly)
General Council Memoranda - Answer Location: Tax Analysts' Tax notes; Thomson Reuters
Authority: May not be cited as a precedent
Technical Advice Memoranda - Answer Location: Checkpoint, Commerce Clearing House
Letter Rulings - Answer Offer guidance to taxpayer on how a transaction will be taxed before proceeding with it, issued for a fee upon a taxpayer's request by the National Office of the IRS, describe how the IRS will treat a proposed transaction for tax purposes, only applies to the taxpayer who asks for and obtains the ruling, limited to restricted, preannounced areas of taxation
Location: Thomson Reuters and Commerce Closing House tax services
Authority: Applicable only to taxpayer addressed, no precedential force
Rev. Rule. 2018-22, 2018-34 I.R.B. 308. - Answer Revenue Rulings number 22, appearing on page 308 of the 34th weekly issue of the Internal Revenue Bulletin for 2018
Ltr.Rul.201822015 - Answer 15th ruling during the 22nd week of 2018
Other Administrative Pronouncements - Answer -Treasury Decisions
- Determination Letters
- General Counsel Memoranda, Technical Advice Memoranda, Internal Legal Memoranda, Field Service Advice Memoranda *The IRS indicates that they may not be cited as precedents by taxpayers
Treasury Decisions - Answer Issued by the Treasury department to: - promulgate new or amend existing regulations
- announce position of the Government on selected court decisions
-published in the Internal Revenue Bulletin
Determination Letters - Answer -Issued by an IRS Area Director at taxpayer's request
-Usually involve completed transactions
-Not published, made known only to party making the request
Trial Courts - Answer -US Tax Court (small cases division- only hears cases involving amounts of $50,000 or less, no appeal from this division of the US tax court) -US District Court
