,DOWNLOADgTHEgTestgBankgforgCCHgFederalgTaxationgBasicgPrinciplesg2021g1stgE
ditiongSmith
1 Testbank
Chapterg2
TaxgResearch,gPractice,gandgProcedure
TRUE-FALSEgQUESTIONS—CHAPTERg2
1. CommitteegreportsgofgthegHousegWaysgandgMeansgCommittee,gthegSenategFinancegCom
mittee,gandgthegconferencegcommitteesgaregpublishedgbygthegGovernmentgPrintinggOffic
egandgaregalsogreprintedgingthegInternalgRevenuegBulletingandgCumulativegBulletin.
2. Titleg26gofgthegUnitedgStatesgCodegcontainsgthegstatutesgthatgauthorizegthegTreasurygDe
partment,gspecifically,gthegInternalgRevenuegService,gtogcollectgtaxesgforgthegfederalggov
ernment.
3. SectiongnumbersgrungconsecutivelygthroughgthegentiregCode,gbutgwithgoccasionalgbreaks
gingtheirgsequence.
4. AllgRevenuegRulingsgaregpublishedgingthegInternalgRevenuegBulletin.
5. IfgthegIRSgrevokesgorgmodifiesgagpublishedgruling,gopengtaxgyearsgcangbegretroactivelyga
ffectedgforgallgtaxpayers.
6. Sincegregulations,grevenuegrulings,gandgacquiescedgTaxgCourtgdecisionsgallglackgjudicial
gauthority,gangIRSgagentgwouldgmoregeasilygbegpersuadedgbygreferencegtogDistrictgCourt
gandgCircuitgCourtgdecisions.
7. InformationgReleasesg(IRs)gusuallygaregnotgpublishedgingthegInternalgRevenuegBulletin,g
butgaregdistributedgviagagpractitioners'gmailingglist.
8. PrivateglettergrulingsgbygthegInternalgRevenuegServicegaregonlygmadegavailablegbygangof
ficialgcourtgorder.
9. AgthoroughglegislativeghistorygandgbackgroundgofgagSectiongofgthegInternalgRevenuegCo
degisggenerallygfoundgingthegWoltersgKluwergandgThomsongReutersgtaxgservices.
10. ThegInternalgRevenuegCodegofg1986gisgarrangedgasgfollows:gChapter,gSubtitle,gSubchapt
er,gPart,gSection,gSubpart,gSubsection.
11. ThegIRSgmustgfollowgthegprecedentsgsetgbygdecisionsgofgthegU.S.gCourtgofgFederalgClai
ms.
12. IngagCourtgofgAppealsgdisputegbetweengtheg5thgandg8thgCircuits,gthegU.S.gTaxgCourtgop
eratinggwithingtheg5thgCircuitgwillgusuallygrefergthegcasegtogthegU.S.gSupremegCourt.
13. Currentgtaxglawgdatesgbackgonlygtogpost-1986gInternalgRevenuegCodegdevelopments.
14. ThegCitatorgServicegoutlinesgtheghistorygofgagcourtgcase,gfromginception,gthroughgappeal
sgandgtellsgwhichglatergcasesgorgrulingsghavegcitedgit.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
,DOWNLOADgTHEgTestgBankgforgCCHgFederalgTaxationgBasicgPrinciplesg2021g1stgE
ditiongSmith
2 CCHgFederalgTaxation—BasicgPrinciples
15. ThegWoltersgKluwerg"Citator,"goutlinesgcurrentgamendmentsgtogthegCode.
16. ThegMertensgtaxgservicegisgagtaxgservicegthatgisgsometimesgcitedgbygthegcourts.
17. "ClosedgFact"gtaxgresearchgrelatesgtogthegvariousgproceduresginvolvedging"before-the-
gfactsgplanning"gsituations.
18. TaxgCourtgdecisionsgthatginvolvegissuesgnotgpreviouslygdecidedgbygthegCourtgaregrelease
dgasgMemorandumgdecisions.
19. ThegIRSgmightgissuegangAcquiescencegorgagNonacquiescencegtogagRegulargTaxgCourtgd
ecision,gbutgnotgtogagMemorandumgdecision.
20. Taxg"evasion"gandg"avoidance"garegalmostgidenticalgconcepts,gbothgrelatinggtogthegwillf
ulgfailuregtogcomplygwithgtaxglaws.
21. Agpractitionergwhogisgangincomegtaxgreturngpreparergandgwhogfilesgagpowergofgattorneyg
withgthegInternalgRevenuegServicegmaygreceivegandgendorsegagtaxpayer'sgrefundgcheck.
22. AgcorporationgmaygbegrepresentedgbygonegofgitsgbonagfidegofficersgbeforegthegInternalgR
evenuegService.
23. Angindividualgwhogisgagregulargfull-
timegemployeegofgagpartnershipgmaygrepresentgthegpartnershipgbeforegthegInternalgReve
nuegService.
24. Angaccountantgdiscoversgangerrorgongagclient'sgreturns.gThegaccountantgmustgadvisegtheg
clientgandgthegInternalgRevenuegServicegofgthegerror.
25. Agclaimgforgrefundg(Formg1040X,gAmendedgU.S.gIndividualgIncomegTaxgReturn)gmustg
begfiledgwithingthreegyearsgfromgthegdategthegreturngwasgduegorgfiled,gorgwithingtwogyear
sgfromgthegdategthegtaxgwasgpaid,gwhichevergisglater.
26. AgnoticegofgdeficiencygreceivedgbygagtaxpayergfromgthegInternalgRevenuegServicegmean
sgthatgagproposedgtaxgliabilityghasgbeengautomaticallygassessedgandgthegtaxpayergcangnog
longergtakeghisgorghergcasegtogthegTaxgCourt.
27. Determinationglettersgregardinggthegwrittengqualificationsgofgangindividuallygdesignedgre
tirementgplangaregissuedgbygthegInternalgRevenuegService'sgNationalgOfficegingWashingt
on.
28. ThegtaxpayergorgthegGovernmentgmaygappealgdecisionsgofgagDistrictgCourtgtogthegCourt
g ofgAppeals.
29. DecisionsgofgthegCourtgofgFederalgClaimsgaregappealedgtogthegU.S.gSupremegCourt.
30. ThegU.S.gTaxgCourtgisgangindependentgjudicialgbodygthatghasgnogconnectiongwithgthegInt
ernalgRevenuegService.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
, DOWNLOADgTHEgTestgBankgforgCCHgFederalgTaxationgBasicgPrinciplesg2021g1stgE
ditiongSmith
3 Testbank
31. Angunenrolledgindividualgmaygrepresentghisgorghergregulargfull-
timegemployergbeforegthegInternalgRevenuegService.
32. AngexaminationgofgFarleygField'sg2020gincomegtaxgreturngresultedgingangunagreedgdefici
encygofg$20,000,gandgheghasgrequestedgthatghisgcasegbegheardgbygthegTaxgCourtgundergth
egSmallgTaxgCasegprocedures.gIfghisgcasegisghandledgusinggthesegprocedures,ghegcannotg
appealgthegdecision.
33. ThegTaxgCourtghearsgcasesgonlygifgthegtaxghasgbeengassessedgorgpaid.
34. DorisgDuncangreceivedgagstatutorygnoticegofgdeficiencygatghergresidencegingOhio.gIfgsheg
wishesgtogappealgthegdeficiencygtogthegTaxgCourt,gshegmaygfilegagpetitiongatganygtimegwi
thing120gdaysgofgthegissuancegofgthegnotice.
35. ThegU.S.gSupremegCourtgisgnotgobligatedgtogheargallgtaxgcasesgthatgaregappealedgtogit.
36. ThegCommissionergofgInternalgRevenuegmaygappealgangadversegdecisiongofgthegTaxgCo
urt.
37. ThegTaxgCourtgisglessglikelygtogbeglenientgingitsgenforcementgofgthegrulesgofgevidencegtha
ngthegDistrictgCourtgorgthegCourtgofgFederalgClaims.
38. AgjurygtrialgisgallowedgingthegTaxgCourt.
39. PaymentgofgtaxgisgnotgnecessarygtoglitigategingthegDistrictgCourt.
40. TaxpayersgmaygrequestgagdeterminationglettergfromgthegNationalgOfficegofgthegIRS.
41. ArnoldgAmes,gagpartnergingangaccountinggfirm,gdiscoversgthatgonegofghisgclientsgomittedg
agsubstantialgamountgofggrossgincome.gArnoldgshouldgimmediatelygnotifyghisgpartnersga
ndgthegIRS.
42. Agclaimgforgrefundgmustgbegfiledgwithingthreegyearsgfromgthegdategthegreturngwasgfiledgo
rgwithingthreegyearsgfromgthegdategthegtaxgwasgpaid,gwhichevergdategisglater.
43. Ifgthegtaxpayergdisagreesgwithgangexaminer'sgfindings,gthegtaxpayergmustgfirstgmakeganga
ppealgtogthegIRSgbeforeggoinggtogthegcourts.
44. BarrygBroom'sgtaxgreturngwasgexaminedgbygagtaxgauditorgwhogdeterminedgadditionalgtax
gduegofg$2,400.gBarrygdoesgnotgagreegwithgthegproposedgchangegandgrequestsgagconferen
cegwithgthegAppealsgOffice.gBarrygisgrequiredgtogsubmitgagwrittengprotestgwithghisgreque
stgtogthegAppealsgOffice.
45. Secondarygsourcesgofgauthoritygsuchgasgtaxgservices,gcitators,gandglegalgperiodicalsgaregr
eferencesgthatgexplaingandgcommentgongprimarygsourcesgofgauthority.
46. Regulationsgoftengdefinegterms,gclarifyglanguagegusedgingthegCode,gandgexplainghowgthe
gPresidentgbelievesgthegtaxglawsgshouldgbeginterpreted.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
ditiongSmith
1 Testbank
Chapterg2
TaxgResearch,gPractice,gandgProcedure
TRUE-FALSEgQUESTIONS—CHAPTERg2
1. CommitteegreportsgofgthegHousegWaysgandgMeansgCommittee,gthegSenategFinancegCom
mittee,gandgthegconferencegcommitteesgaregpublishedgbygthegGovernmentgPrintinggOffic
egandgaregalsogreprintedgingthegInternalgRevenuegBulletingandgCumulativegBulletin.
2. Titleg26gofgthegUnitedgStatesgCodegcontainsgthegstatutesgthatgauthorizegthegTreasurygDe
partment,gspecifically,gthegInternalgRevenuegService,gtogcollectgtaxesgforgthegfederalggov
ernment.
3. SectiongnumbersgrungconsecutivelygthroughgthegentiregCode,gbutgwithgoccasionalgbreaks
gingtheirgsequence.
4. AllgRevenuegRulingsgaregpublishedgingthegInternalgRevenuegBulletin.
5. IfgthegIRSgrevokesgorgmodifiesgagpublishedgruling,gopengtaxgyearsgcangbegretroactivelyga
ffectedgforgallgtaxpayers.
6. Sincegregulations,grevenuegrulings,gandgacquiescedgTaxgCourtgdecisionsgallglackgjudicial
gauthority,gangIRSgagentgwouldgmoregeasilygbegpersuadedgbygreferencegtogDistrictgCourt
gandgCircuitgCourtgdecisions.
7. InformationgReleasesg(IRs)gusuallygaregnotgpublishedgingthegInternalgRevenuegBulletin,g
butgaregdistributedgviagagpractitioners'gmailingglist.
8. PrivateglettergrulingsgbygthegInternalgRevenuegServicegaregonlygmadegavailablegbygangof
ficialgcourtgorder.
9. AgthoroughglegislativeghistorygandgbackgroundgofgagSectiongofgthegInternalgRevenuegCo
degisggenerallygfoundgingthegWoltersgKluwergandgThomsongReutersgtaxgservices.
10. ThegInternalgRevenuegCodegofg1986gisgarrangedgasgfollows:gChapter,gSubtitle,gSubchapt
er,gPart,gSection,gSubpart,gSubsection.
11. ThegIRSgmustgfollowgthegprecedentsgsetgbygdecisionsgofgthegU.S.gCourtgofgFederalgClai
ms.
12. IngagCourtgofgAppealsgdisputegbetweengtheg5thgandg8thgCircuits,gthegU.S.gTaxgCourtgop
eratinggwithingtheg5thgCircuitgwillgusuallygrefergthegcasegtogthegU.S.gSupremegCourt.
13. Currentgtaxglawgdatesgbackgonlygtogpost-1986gInternalgRevenuegCodegdevelopments.
14. ThegCitatorgServicegoutlinesgtheghistorygofgagcourtgcase,gfromginception,gthroughgappeal
sgandgtellsgwhichglatergcasesgorgrulingsghavegcitedgit.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
,DOWNLOADgTHEgTestgBankgforgCCHgFederalgTaxationgBasicgPrinciplesg2021g1stgE
ditiongSmith
2 CCHgFederalgTaxation—BasicgPrinciples
15. ThegWoltersgKluwerg"Citator,"goutlinesgcurrentgamendmentsgtogthegCode.
16. ThegMertensgtaxgservicegisgagtaxgservicegthatgisgsometimesgcitedgbygthegcourts.
17. "ClosedgFact"gtaxgresearchgrelatesgtogthegvariousgproceduresginvolvedging"before-the-
gfactsgplanning"gsituations.
18. TaxgCourtgdecisionsgthatginvolvegissuesgnotgpreviouslygdecidedgbygthegCourtgaregrelease
dgasgMemorandumgdecisions.
19. ThegIRSgmightgissuegangAcquiescencegorgagNonacquiescencegtogagRegulargTaxgCourtgd
ecision,gbutgnotgtogagMemorandumgdecision.
20. Taxg"evasion"gandg"avoidance"garegalmostgidenticalgconcepts,gbothgrelatinggtogthegwillf
ulgfailuregtogcomplygwithgtaxglaws.
21. Agpractitionergwhogisgangincomegtaxgreturngpreparergandgwhogfilesgagpowergofgattorneyg
withgthegInternalgRevenuegServicegmaygreceivegandgendorsegagtaxpayer'sgrefundgcheck.
22. AgcorporationgmaygbegrepresentedgbygonegofgitsgbonagfidegofficersgbeforegthegInternalgR
evenuegService.
23. Angindividualgwhogisgagregulargfull-
timegemployeegofgagpartnershipgmaygrepresentgthegpartnershipgbeforegthegInternalgReve
nuegService.
24. Angaccountantgdiscoversgangerrorgongagclient'sgreturns.gThegaccountantgmustgadvisegtheg
clientgandgthegInternalgRevenuegServicegofgthegerror.
25. Agclaimgforgrefundg(Formg1040X,gAmendedgU.S.gIndividualgIncomegTaxgReturn)gmustg
begfiledgwithingthreegyearsgfromgthegdategthegreturngwasgduegorgfiled,gorgwithingtwogyear
sgfromgthegdategthegtaxgwasgpaid,gwhichevergisglater.
26. AgnoticegofgdeficiencygreceivedgbygagtaxpayergfromgthegInternalgRevenuegServicegmean
sgthatgagproposedgtaxgliabilityghasgbeengautomaticallygassessedgandgthegtaxpayergcangnog
longergtakeghisgorghergcasegtogthegTaxgCourt.
27. Determinationglettersgregardinggthegwrittengqualificationsgofgangindividuallygdesignedgre
tirementgplangaregissuedgbygthegInternalgRevenuegService'sgNationalgOfficegingWashingt
on.
28. ThegtaxpayergorgthegGovernmentgmaygappealgdecisionsgofgagDistrictgCourtgtogthegCourt
g ofgAppeals.
29. DecisionsgofgthegCourtgofgFederalgClaimsgaregappealedgtogthegU.S.gSupremegCourt.
30. ThegU.S.gTaxgCourtgisgangindependentgjudicialgbodygthatghasgnogconnectiongwithgthegInt
ernalgRevenuegService.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
, DOWNLOADgTHEgTestgBankgforgCCHgFederalgTaxationgBasicgPrinciplesg2021g1stgE
ditiongSmith
3 Testbank
31. Angunenrolledgindividualgmaygrepresentghisgorghergregulargfull-
timegemployergbeforegthegInternalgRevenuegService.
32. AngexaminationgofgFarleygField'sg2020gincomegtaxgreturngresultedgingangunagreedgdefici
encygofg$20,000,gandgheghasgrequestedgthatghisgcasegbegheardgbygthegTaxgCourtgundergth
egSmallgTaxgCasegprocedures.gIfghisgcasegisghandledgusinggthesegprocedures,ghegcannotg
appealgthegdecision.
33. ThegTaxgCourtghearsgcasesgonlygifgthegtaxghasgbeengassessedgorgpaid.
34. DorisgDuncangreceivedgagstatutorygnoticegofgdeficiencygatghergresidencegingOhio.gIfgsheg
wishesgtogappealgthegdeficiencygtogthegTaxgCourt,gshegmaygfilegagpetitiongatganygtimegwi
thing120gdaysgofgthegissuancegofgthegnotice.
35. ThegU.S.gSupremegCourtgisgnotgobligatedgtogheargallgtaxgcasesgthatgaregappealedgtogit.
36. ThegCommissionergofgInternalgRevenuegmaygappealgangadversegdecisiongofgthegTaxgCo
urt.
37. ThegTaxgCourtgisglessglikelygtogbeglenientgingitsgenforcementgofgthegrulesgofgevidencegtha
ngthegDistrictgCourtgorgthegCourtgofgFederalgClaims.
38. AgjurygtrialgisgallowedgingthegTaxgCourt.
39. PaymentgofgtaxgisgnotgnecessarygtoglitigategingthegDistrictgCourt.
40. TaxpayersgmaygrequestgagdeterminationglettergfromgthegNationalgOfficegofgthegIRS.
41. ArnoldgAmes,gagpartnergingangaccountinggfirm,gdiscoversgthatgonegofghisgclientsgomittedg
agsubstantialgamountgofggrossgincome.gArnoldgshouldgimmediatelygnotifyghisgpartnersga
ndgthegIRS.
42. Agclaimgforgrefundgmustgbegfiledgwithingthreegyearsgfromgthegdategthegreturngwasgfiledgo
rgwithingthreegyearsgfromgthegdategthegtaxgwasgpaid,gwhichevergdategisglater.
43. Ifgthegtaxpayergdisagreesgwithgangexaminer'sgfindings,gthegtaxpayergmustgfirstgmakeganga
ppealgtogthegIRSgbeforeggoinggtogthegcourts.
44. BarrygBroom'sgtaxgreturngwasgexaminedgbygagtaxgauditorgwhogdeterminedgadditionalgtax
gduegofg$2,400.gBarrygdoesgnotgagreegwithgthegproposedgchangegandgrequestsgagconferen
cegwithgthegAppealsgOffice.gBarrygisgrequiredgtogsubmitgagwrittengprotestgwithghisgreque
stgtogthegAppealsgOffice.
45. Secondarygsourcesgofgauthoritygsuchgasgtaxgservices,gcitators,gandglegalgperiodicalsgaregr
eferencesgthatgexplaingandgcommentgongprimarygsourcesgofgauthority.
46. Regulationsgoftengdefinegterms,gclarifyglanguagegusedgingthegCode,gandgexplainghowgthe
gPresidentgbelievesgthegtaxglawsgshouldgbeginterpreted.
©g2020gCCHgIncorporatedgandgitsgaffiliates.gAllgrightsgreserved Chapterg2
.
mynursytest.store
