Advanced Federal Taxation Exam Practice Tests
Course Introduction
Advanced Federal Taxation explores complex topics in U.S. federal taxation, building on foundational tax principles. The course covers the taxation of business entities such as corporations, partnerships, and S corporations, as well as issues related to multi-jurisdictional taxation and tax planning strategies. Students examine tax research methodologies, compliance requirements, and the implications of recent legislative changes. Emphasis is placed on practical application, ethical considerations, and the critical analysis of advanced tax concepts to prepare students for professional roles in tax consulting or accounting.
Recommended Textbook
Federal Tax Research 11th Edition by
Roby B. Sawyers
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14 Chapters
691 Verified Questions
691 Flashcards
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Page 2
Chapter 1: Introduction to Tax Practice and Ethics
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54 Verified Questions
54 Flashcards
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Sample Questions
Q1) A contingent fee is:
A)always allowed by Circular 230
B)a fee that is out of line with the value of the service provided
C)a fee based on a percentage of a taxpayer's refund on a tax return
D)all of these are correct
Answer: C
Q2) Taxation and tax practice are comprised of the interaction of several disciplines. What are those disciplines? Briefly discuss their impact on the tax system.
Answer: Tax practice involves a blend of accounting and law. The tax law itself is a product of economics, political science, and sociology.Each of these disciplines influences taxation in a different way. Economics provides input about how the tax law will affect the economy. Political science is the process by which laws are made, and sociology provides the framework to determine the equity and societal goals of the tax law.
Q3) Circular 230 bans tax practitioners from giving written advice on a federal tax issue based on the likelihood of an audit.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Tax Research Methodology
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) Tax journals perform which of the following functions:
A)offer researchers expert analysis of unclear tax issues
B)keep researchers aware of current developments
C)suggest tax planning techniques
D)all of these are correct
Answer: B
Q2) All primary source material has the same precedential value.
A)True
B)False
Answer: False
Q3) CCH's annotated or code-based commercial tax service is:
A)the United States Tax Reporter
B)the Tax Coordinator 2d
C)the Thomson Reuters Checkpoint
D)the Federal Tax Library
Answer: C
Q4) Google Scholar is an example of an online, free tax-related internet site.
A)True
B)False
Answer: True
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Chapter 3: Constitutional and Legislative Sources
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) Whenever a major new tax law is passed, CCH and RIA both publish the related Committee Reports.
A)True
B)False
Answer: True
Q2) A "tax protester" is:
A)a person who files a "frivolous" return with the IRS
B)a person who brings a "frivolous" matter before the Tax Court
C)a person who may be subject to a penalty for frivolous Tax Court petitions
D)all of these are correct
E)none of these are correct
Answer: D
Q3) Which of the following statements is CORRECT regarding Committee Reports?
A)They are published in the Internal Revenue Bulletin.
B)They can be found in most subscription online tax services.
C)They explain the elements of proposed tax law changes and reasons for the changes.
D)All of these are correct.
E)None of these are correct.
Answer: D
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Chapter 4: Administrative Regulations and Rulings
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49 Verified Questions
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Sample Questions
Q1) Which of the following is CORRECT with respect to Private Letter Rulings?
A)They are issued by the IRS National Office in response to a specific taxpayer request.
B)They can be cited as precedent by other taxpayers.
C)They are published weekly by the IRS in the Internal Revenue Bulletin.
D)They are also known as Technical Advice Memoranda.
E)None of these are correct.
Q2) Proposed Regulations have the effect of law.
A)True
B)False
Q3) The IRS's general authority to issue binding rules and regulations comes from which source?
A)the U.S. Constitution
B)an Executive Order of the President
C)a section of the Internal Revenue Code itself
D)none of these are correct
Q4) Temporary Regulations must be followed by taxpayers until they are superseded or until they expire.
A)True
B)False
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Chapter 5: Judicial Interpretations
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Sample Questions
Q1) A "writ of certiorari" is:
A)the process by which the Supreme Court agrees to review a lower court decision
B)a judgment notwithstanding the verdict
C)the procedure for determining if the authorities can hold an individual in custody
D)a reversal of the prior decision of a court
Q2) An appeal from the Tax Court is to the:
A)U.S. Court of Appeals where the taxpayer is located
B)District Court where the taxpayer is located
C)U.S. Court of Federal Claims
D)Supreme Court
Q3) The U.S. Court of Federal Claims is a trial-level court.
A)True
B)False
Q4) Judicial decisions constitute a primary source of the tax law.
A)True
B)False
Q5) En banc refers to a court case heard by the full court.
A)True
B)False
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Chapter 6: Tax Services Ria Checkpoint
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43 Verified Questions
43 Flashcards
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Sample Questions
Q1) What is the difference between a Terms & Connectors search and an Intuitive Search in Thomson Reuters Checkpoint? Give an example of each.
Q2) Boolean connectors are used:
A)when the researcher is unsure as to which keywords would be most effective in a search
B)to define the relationship between keywords
C)in intuitive searches
D)none of these are correct
Q3) The only support recognized by the IRS and courts are primary sources and not the editorial explanations of a tax service.
A)True
B)False
Q4) The "Terms & Connectors" type of keyword search is useful when a researcher is unsure as to which keywords would be most effective.
A)True
B)False
Q5) Why would a practitioner need a commercial, subscription tax service when most tax sources are available on the Internet for free?
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Chapter 7: Tax Services CCH Intelliconnect
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46 Verified Questions
46 Flashcards
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Sample Questions
Q1) Which statement is CORRECT regarding commercial tax services?
A)They provide free access to all primary source tax materials.
B)They eliminate the need for reading primary tax law source materials.
C)They act as an index for and explanation of primary and secondary tax law source materials.
D)All of the these are correct.
Q2) A citation search is different from a citator.
A)True
B)False
Q3) The precedential value of a case refers to:
A)whether it was appealed
B)the monetary value at stake in that case
C)the legal authority established by that case
D)all of these are correct
Q4) A broad knowledge of tax law, a reasonable level of experience, and persistence are necessary for:
A)passing the Bar Exam
B)looking at Google
C)researching the tax law
D)contracting tax law researchers
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Chapter 8: Tax Services Specialty and Others
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Sample Questions
Q1) The publications containing a variety of articles and news briefs that are designed to keep readers up to date in specific or general areas of the tax law are called:
A)Law Publisher's best
B)Tax Periodicals
C)Law Review
D)Taxation Legal
Q2) How can finding a BNA Portfolio on point with a practitioner's tax issue be like hiring someone to do the research?
Q3) The Westlaw search engine designed to tailor search results to the most relevant items based on the expertise of experienced law researchers is called the:
A)WestSearch search engine
B)Boolean Terms search engine
C)Wildcard search engine
D)Regulations search engine
Q4) Perhaps the only tax services not available on LexisNexis are its competitors
Checkpoint and Westlaw.
A)True
B)False
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Chapter 9: Multijurisdictional and Other Research
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60 Flashcards
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Sample Questions
Q1) The clause with a goal to create a national economy unencumbered by discriminatory, arbitrary jurisdictional standards of the states is called the:
A)Supremacy Clause
B)Due Process Clause
C)Commerce Clause
D)Equal Protection Clause
Q2) Which of the following clauses of the federal Constitution immunizes the federal government from taxation by the states?
A)Due Process Clause
B)Commerce Clause
C)Supremacy Clause
D)Equal Protection Clause
Q3) With a territorial model of taxation, a foreign tax credit is needed to ensure that the income is not taxed twice.
A)True
B)False
Q4) Why are taxpayers emphasizing multijurisdictional tax planning?
Q5) "The Code provisions always take precedence over treaty provisions." Comment.
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Chapter 10: Financial Accounting Research
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42 Verified Questions
42 Flashcards
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Sample Questions
Q1) Exposure drafts issued for proposed updates of accounting standards in the Codification are indexed alphabetically.
A)True
B)False
Q2) Deferred tax assets represent:
A)future deductions
B)contingent assets
C)future includable income
D)unearned revenue
Q3) Which of the following International Accounting Standards deals with international guidance for accounting for income taxes?
A)IAS 29
B)ASC 740
C)SFAS 109
D)IAS 12
Q4) As part of its Checkpoint series, Thomson Reuters offers:
A)Audit and Accounting Disclosure Manual
B)GAAP Practice Manual
C)SEC compliance
D)all of these are correct
Page 12
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Chapter 11: Communicating Research Results
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41 Flashcards
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Sample Questions
Q1) The audience for tax research communication is primarily:
A)the client
B)the practitioner's supervisor
C)none of these are correct
D)all of these are correct
Q2) In oral communications, a speaker should always aim the presentation at the audience members who have the least amount of knowledge.
A)True
B)False
Q3) To effectively convey the results of a tax research project, the practitioner must:
A)consult IRS officials
B)apply professional judgment and communication skills
C)have an informal discussion with the client
D)all of these are correct
Q4) Tax treatises and journal articles should not be used in the formation of the practitioner's research schedule.
A)True
B)False
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Page 13
Chapter 12: Tax Planning
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Sample Questions
Q1) Allowing an investment to increase in value without selling it is an example of tax planning by:
A)changing the timing of recognition of taxable income
B)changing the character of income
C)spreading income among related parties
D)none of these are correct
Q2) Tax planning analyses should be based on the average tax rates that the individual will pay or save by adopting a particular course of action.
A)True
B)False
Q3) When tax rates are constant, delaying income recognition or accelerating deductions can be beneficial.
A)True
B)False
Q4) Taxpayers are rewarded more for finding ways to save taxes than for earning an equal amount in the marketplace.
A)True
B)False
Q5) What is a statutory tax trap? Give an example.
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Chapter 13: Working With the IRS
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63 Verified Questions
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Sample Questions
Q1) A taxpayer's return is classified for audit after receiving a high DIF score and being manually screened by an IRS classifier. Which of the following statements best describes whether the taxpayer will be contacted by an auditor or revenue agent?
A)The taxpayer will be contacted since a high DIF score always will mean some type of audit.
B)The taxpayer will be contacted because only the National Office has the power to decide that after screening, the return need not be audited.
C)The taxpayer will not necessarily be contacted since after the Service Center review, it may be decided that an audit is unwarranted because the return will be manually inspected for audit determination.
D)The taxpayer will not necessarily be contacted by an auditor or revenue agent since after the return is screened by the Service Center, it then is randomly selected for audit.
Q2) What are the "pros" and "cons" of filing a protest to an IRS Audit?
Q3) A taxpayer may be represented before the IRS only by attorneys.
A)True
B)False
Q4) Explain how the discriminant function system works.
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Page 15
Chapter 14: Tax Practice and Administration: Sanctions, Agreements,
and Disclosures
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Sample Questions
Q1) If a taxpayer is convicted of criminal fraud, he or she can contest a civil fraud determination.
A)True
B)False
Q2) A fraudulent failure-to-file tax return is subject to a 25 percent monthly penalty.
A)True
B)False
Q3) If a taxpayer fails to file her return due to willful neglect, the minimum penalty is:
A)25 percent or 5 months cumulative penalty
B)lesser of $205 or the full amount of taxes that are required to be shown on the return
C)15 percent monthly penalty
D)lesser of $135 or the full amount of taxes that are required to be shown on the return
Q4) The Employee Withholding Allowance Certificate is required to be given by the employee to the employer.
A)True
B)False
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Page 16