Test Bank For Corporate Partnership Estate and Gift Taxation
2021 1st Edition Pratt 9781617407901 | All Chapters with
Answers and Rationals
A partnership is taxed as a separate entity - ANSWER: False
A system whereby income taxes are withheld systematically from current wages can be referred to as
a "pay-as-you-go" system. - ANSWER: True
An equitable tax system is a fair tax system. - ANSWER: True
Since 1980, the group of taxpayers whose tax burden has increased the most is - ANSWER: Individuals
Revenue legislation begins in the Senate - ANSWER: False
Tax avoidance can be the sole business purpose for a transaction - ANSWER: False
Tax avoidance is discouraged as being anti-American. - ANSWER: False: Perfectly legal and encourage
by our society
What notion recognizes that mere appreciation in value does not necessarily mean that the owner
has the resources to pay the tax associated with the appreciation: - ANSWER: wherewithal-to-pay
concept
The ultimate source of power to tax resides with the - ANSWER: Constitution
The rate of tax that a taxpayer pays on the last dollar of income is known as - ANSWER: the marginal
tax rate
The most popular form of doing business in the United States is - ANSWER: Single proprietorship
The doctrine of separation of powers refers to the relationship between the Internal Revenue Service
and the Treasury Department. - ANSWER: False
The current tax system can be classified as "pay-as-you-go." - ANSWER: True
The Sixteenth Amendment to the U.S. Constitution affects - ANSWER: direct taxes
The Revenue Reconciliation Act of 1998 imposed the following - ANSWER: Lowered the holding period
for long-term capital gains from 18 to 12 months
Tax avoidance should be at the top of every taxpayer's list for tax planning - ANSWER: True
Another name for a flat tax is a progressive tax - ANSWER: False- a flat tax is a proportional tax
Flow-through entities do not pay tax on taxable income, so it is not necessary for them to keep track
of their gross income. - ANSWER: False
"Closed Fact" tax research relates to the various procedures involved in "before-the-facts planning"
situations - ANSWER: False: Closed fact research relates to "after-the-facts compliance" or ex post
facto research
, A corporation may be represented by one of its bona fide officers before the Internal Revenue Service
- ANSWER: True
All Revenue Rulings are published in the Internal Revenue Bulletin, and eventually in the Cumulative
Bulletin. - ANSWER: True. However, sometimes delays will occur and a ruling with a later number may
be published before one with an earlier number
All of the following statements relating to Treasury regulations are true except: - ANSWER: the rules
contained in temporary regulations can never be used as authority by taxpayers but, instead, are
meant to aid in taxpayer compliance with IRS rules and regulations.
Jury trial is available in the - ANSWER: District Court. A jury trial is available only in the District Court
In response to a preliminary (30-day) letter, a written protest discussing the facts and legal arguments
must accompany a written request for an Appeals Conference in which of the following cases? -
ANSWER: A proposed disallowance of a $3,000 refund claim
Practice before the IRS is available only for "enrolled agents." - ANSWER: False. Practice before the IRS
is available for CPAs and attorneys also as well as a few other groups
Regulations can be in the form of: - ANSWER: temporary, proposed, or final Regulations
Regulations may be legislative, interpretative, and procedural, and are afforded different weight by
the courts - ANSWER: True. These are three types of regulations which have different weight.
Revenue rulings are issued on the basis of Code sections and may be subsequently changed
(modified) or revoked to reflect subsequent law or regulation changes and court decisions. - ANSWER:
True
The "Compilations" which comprise the major portion of Volumes 1 through 18 of the CCH Standard
Tax Service: - ANSWER: Do not contain the full text of Revenue Rulings
The Internal Revenue Code of 1939 replaced the piecemeal annual revenue acts. - ANSWER: True. The
IRS Code was the first codification of the previous annual revenue acts
The Tax Court may issue an opinion as a "Regular," as opposed to a "Memorandum" opinion, if -
ANSWER: The Tax Court considers the case to be expressive of a new point not previously covered by
one of its published decisions.
The authority of the U.S. government to raise revenue through a federal income tax is derived from: -
ANSWER: The 16th Amendment to the Constitution
The term "tax doctrine" refers to a - ANSWER: Judicial interpretation with strong precedential value
There is no limitation on the period for assessment if - ANSWER: the taxpayer files a false return
Which of the following are not published either by the government or by any of the private publishing
services? - ANSWER: Determination Letters
Which of the following is most likely to help explain the intent of Congress when it enacts tax
legislation? - ANSWER: Committee Reports
What source of tax law is cross-referenced to related Internal Revenue Code sections through the use
of a similar numbering system? - ANSWER: Treasury Regulations
2021 1st Edition Pratt 9781617407901 | All Chapters with
Answers and Rationals
A partnership is taxed as a separate entity - ANSWER: False
A system whereby income taxes are withheld systematically from current wages can be referred to as
a "pay-as-you-go" system. - ANSWER: True
An equitable tax system is a fair tax system. - ANSWER: True
Since 1980, the group of taxpayers whose tax burden has increased the most is - ANSWER: Individuals
Revenue legislation begins in the Senate - ANSWER: False
Tax avoidance can be the sole business purpose for a transaction - ANSWER: False
Tax avoidance is discouraged as being anti-American. - ANSWER: False: Perfectly legal and encourage
by our society
What notion recognizes that mere appreciation in value does not necessarily mean that the owner
has the resources to pay the tax associated with the appreciation: - ANSWER: wherewithal-to-pay
concept
The ultimate source of power to tax resides with the - ANSWER: Constitution
The rate of tax that a taxpayer pays on the last dollar of income is known as - ANSWER: the marginal
tax rate
The most popular form of doing business in the United States is - ANSWER: Single proprietorship
The doctrine of separation of powers refers to the relationship between the Internal Revenue Service
and the Treasury Department. - ANSWER: False
The current tax system can be classified as "pay-as-you-go." - ANSWER: True
The Sixteenth Amendment to the U.S. Constitution affects - ANSWER: direct taxes
The Revenue Reconciliation Act of 1998 imposed the following - ANSWER: Lowered the holding period
for long-term capital gains from 18 to 12 months
Tax avoidance should be at the top of every taxpayer's list for tax planning - ANSWER: True
Another name for a flat tax is a progressive tax - ANSWER: False- a flat tax is a proportional tax
Flow-through entities do not pay tax on taxable income, so it is not necessary for them to keep track
of their gross income. - ANSWER: False
"Closed Fact" tax research relates to the various procedures involved in "before-the-facts planning"
situations - ANSWER: False: Closed fact research relates to "after-the-facts compliance" or ex post
facto research
, A corporation may be represented by one of its bona fide officers before the Internal Revenue Service
- ANSWER: True
All Revenue Rulings are published in the Internal Revenue Bulletin, and eventually in the Cumulative
Bulletin. - ANSWER: True. However, sometimes delays will occur and a ruling with a later number may
be published before one with an earlier number
All of the following statements relating to Treasury regulations are true except: - ANSWER: the rules
contained in temporary regulations can never be used as authority by taxpayers but, instead, are
meant to aid in taxpayer compliance with IRS rules and regulations.
Jury trial is available in the - ANSWER: District Court. A jury trial is available only in the District Court
In response to a preliminary (30-day) letter, a written protest discussing the facts and legal arguments
must accompany a written request for an Appeals Conference in which of the following cases? -
ANSWER: A proposed disallowance of a $3,000 refund claim
Practice before the IRS is available only for "enrolled agents." - ANSWER: False. Practice before the IRS
is available for CPAs and attorneys also as well as a few other groups
Regulations can be in the form of: - ANSWER: temporary, proposed, or final Regulations
Regulations may be legislative, interpretative, and procedural, and are afforded different weight by
the courts - ANSWER: True. These are three types of regulations which have different weight.
Revenue rulings are issued on the basis of Code sections and may be subsequently changed
(modified) or revoked to reflect subsequent law or regulation changes and court decisions. - ANSWER:
True
The "Compilations" which comprise the major portion of Volumes 1 through 18 of the CCH Standard
Tax Service: - ANSWER: Do not contain the full text of Revenue Rulings
The Internal Revenue Code of 1939 replaced the piecemeal annual revenue acts. - ANSWER: True. The
IRS Code was the first codification of the previous annual revenue acts
The Tax Court may issue an opinion as a "Regular," as opposed to a "Memorandum" opinion, if -
ANSWER: The Tax Court considers the case to be expressive of a new point not previously covered by
one of its published decisions.
The authority of the U.S. government to raise revenue through a federal income tax is derived from: -
ANSWER: The 16th Amendment to the Constitution
The term "tax doctrine" refers to a - ANSWER: Judicial interpretation with strong precedential value
There is no limitation on the period for assessment if - ANSWER: the taxpayer files a false return
Which of the following are not published either by the government or by any of the private publishing
services? - ANSWER: Determination Letters
Which of the following is most likely to help explain the intent of Congress when it enacts tax
legislation? - ANSWER: Committee Reports
What source of tax law is cross-referenced to related Internal Revenue Code sections through the use
of a similar numbering system? - ANSWER: Treasury Regulations
