CPA Exam Preparation: Taxation Test Questions
Course Introduction
This course is designed to comprehensively prepare students for the taxation section of the CPA Exam. It covers key topics such as individual and business income taxation, federal tax laws, tax calculations, regulations, compliance, and ethical considerations. Through a combination of lectures, practical exercises, and sample exam questions, students will develop a deep understanding of important tax concepts, filing procedures, and current regulations. Emphasis is placed on applying tax law to real-world scenarios, critical thinking, and effective test-taking strategies to maximize exam performance. This course is ideal for students seeking targeted review and skill development in taxation as part of their CPA exam preparation.
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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Chapter 1: Introduction to Tax Practice and Ethics
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54 Verified Questions
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Sample Questions
Q1) The Statements on Standards for Tax Services are:
A)part of the ABA Code of Professional Responsibility
B)intended to replace Circular 230
C)intended to supplement the AICPA Code of Professional Conduct and Circular 230
D)none of these are correct
Answer: C
Q2) Tax practice can be defined as the application of the tax laws to specific accounting situations.
A)True
B)False
Answer: True
Q3) Who can represent a taxpayer before the IRS Appeals Office under Circular 230?
A)a CPA
B)an officer of a corporation may represent the corporation
C)an attorney
D)all of these are correct
E)both a CPA and an attorney
Answer: D
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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) One of the issues a tax researcher should be concerned about is how definitive a research result must be.
A)True
B)False
Answer: True
Q3) A statutory source of federal tax law is:
A)various rulings of the Treasury Department and the IRS
B)collected rulings of the various courts on federal tax matters
C)textbooks
D)tax treaties
Answer: D
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Chapter 3: Constitutional and Legislative Sources
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Sample Questions
Q1) Congress cannot override a Presidential veto of a tax bill.
A)True
B)False
Answer: False
Q2) Circuit Courts are administrative sources of the federal tax law.
A)True
B)False Answer: False
Q3) Subtitle A of the Internal Revenue Code deals with:
A)estate and gift taxes
B)employment taxes
C)income taxes
D)excise taxes
Answer: C
Q4) Code Section 61 relates to:
A)deductions for adjusted gross income
B)the definition of gross income
C)corporate tax rates
D)the deduction for state taxes
Answer: B
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Chapter 4: Administrative Regulations and Rulings
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Sample Questions
Q1) Actions on Decision are published by the IRS in the Internal Revenue Bulletin and before 2009 in semiannual Cumulative Bulletins.
A)True
B)False
Q2) All of the following types of tax documents are published in the Internal Revenue Bulletin EXCEPT:
A)IRS Revenue Procedures
B)IRS Letter Rulings
C)Treasury decisions
D)new tax treaties
E)all of these documents are published in the Internal Revenue Bulletin
Q3) 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.
Q4) Define General and Legislative Regulations and explain the distinction.
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Chapter 5: Judicial Interpretations
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Sample Questions
Q1) An appeal from any of the Circuit Courts of Appeals is to the:
A)U.S. District Court
B)U.S. Court of Federal Claims
C)Court of Appeals for the Federal Circuit
D)U.S. Supreme Court
Q2) Where are current U.S. Court of Federal Claims decisions published?
A)West's U.S. Court of Federal Claims reporter (Fed. Cl.)
B)West's Federal Reporter, Third Edition (F.3d.)
C)West's Federal Supplement series (F. Supp.)
D)none of these are correct
Q3) Which of the following statements is CORRECT regarding the U.S. Court of Federal Claims?
A)It hears monetary claims against the federal government, including tax refund claims.
B)It is composed only of judges who are specialists in technical tax law.
C)It must apply the law of the U.S. Court of Appeals in the taxpayer's circuit.
D)All of these are correct.
E)None of these are correct.
Q4) Briefly explain how the burden of proof concept is applied.
Q5) Why would a taxpayer want to bring a case in the U.S. Court of Federal Claims?
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Chapter 6: Tax Services Ria Checkpoint
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Sample Questions
Q1) Checkpoint's flagship editorial content tax service is entitled the:
A)Federal Tax Coordinator
B)Federal Tax Handbook
C)Standard Federal Income Tax Reporter
D)United States Tax Reporter
Q2) What is the difference between a Terms & Connectors search and an Intuitive Search in Thomson Reuters Checkpoint? Give an example of each.
Q3) The Federal Tax Coordinator is a topical service.
A)True
B)False
Q4) Which statement is CORRECT regarding annotated tax services?
A)They are organized by Internal Revenue Code section.
B)They provide annotations, which are comprehensive, detailed analyses of related court cases and administrative rulings.
C)They divide the tax law into transactions and related subject matter with underlying tax principles as an organizing format.
D)All of these are correct.
Q5) Describe the four common search methods used in Thomson Reuters Checkpoint.
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Chapter 7: Tax Services CCH Intelliconnect
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Sample Questions
Q1) Select three different primary sources, one from each area of tax law (legislative, administrative, and judicial), and provide a specific example of a source that is available in IntelliConnect.
Q2) New researchers will appreciate IntelliConnect's three editorial sources of interest. They are the U.S. Master Tax Guide, the Tax Research Consultant, and the:
A)Technical Memoranda
B)Current IRS Publications
C)Standard Federal Tax Reporter
D)Consultant Topical Organization
Q3) IntelliConnect, like most tax services, organizes information by:
A)the list of cases that are cited by the case of interest
B)full-text documents for legal citations
C)database
D)all of these are correct
Q4) Contents search is one of IntelliConnect's primary ways of searching for information.
A)True
B)False
Q5) What roles does a citator play in tax research?
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Chapter 8: Tax Services Specialty and Others
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Sample Questions
Q1) BNA Bloomberg is best known in the tax community as the publisher of the:
A)BNA Collections
B)BNA Tax Management Portfolio
C)BNA Bloomberg Tax & Accounting Center
D)BNA Citators
Q2) For which type of search does BNA offer four different ways to do a search in the tax databases?
A)Keyword Search
B)Quick Search
C)Go To Search
D)Guided Search
Q3) What are KeySearch and the West Key Number System?
Q4) BNA Portfolios are grouped by area of common topic into COLLECTIONS (e.g., there are multiple portfolios on income tax accounting that will be displayed if one clicks on that heading).
A)True
B)False
Q5) What are some of BNA's publications? Describe each briefly.
Q6) How can finding a BNA Portfolio on point with a practitioner's tax issue be like hiring someone to do the research?
Page 10
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Chapter 9: Multijurisdictional and Other Research
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Sample Questions
Q1) The newsletter, International Taxes Weekly, is published by Westlaw.
A)True
B)False
Q2) Tax treaties can prevent double taxation by:
A)providing reduced tax rates and reduced withholding
B)not allowing the exemption of certain types of income from taxation
C)including a "savings clause"
D)all of these are correct
Q3) Which federal Constitutional clause limits the territorial scope of a state's taxing authority?
A)Supremacy Clause
B)Commerce Clause
C)Equal Protection Clause
D)Due Process Clause
Q4) Westlaw offers one portal to international taxation materials through the standard service, Westlaw Taxation.
A)True
B)False
Q5) What is the International Bureau of Fiscal Documentation, and what is its mission?
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Chapter 10: Financial Accounting Research
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42 Flashcards
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Sample Questions
Q1) What are the principal objectives of the International Accounting Standards Board (IASB)?
Q2) The main difference between U.S. GAAP and IFRS is that IFRS is much lengthier, with over 25,000 pages.
A)True
B)False
Q3) Deferred tax assets represent:
A)future deductions
B)contingent assets
C)future includable income
D)unearned revenue
Q4) A position taken in a previously filed return or expected to be taken in a future return is known as:
A)an audit position
B)a tax position
C)an uncertain tax position
D)none of these are correct
Q5) What is meant by "tax position"? Explain the requirements of ASC 740 for the reporting of tax positions.
Page 12
Q6) Explain the basic principles of accounting for deferred taxes.
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Chapter 11: Communicating Research Results
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Sample Questions
Q1) In order to provide the greatest amount of information to the greatest number of listeners, the speaker should direct remarks to the:
A)front of the room
B)back of the room
C)highlights and general results of the research
D)the host or hostess
Q2) Consulting firms and tax departments do not use the same format for client files.
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) You are preparing for an audit with an IRS agent for an important client. Your research has uncovered several favorable rulings and court decisions. What are the key points that should guide you in evaluating sources of the law?
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13
Chapter 12: Tax Planning
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Sample Questions
Q1) Which of the following is the basic formula for computing a taxpayer's tax liability?
A)Tax Liability = Tax Base ÷ Tax Rate
B)Tax Liability = Tax Base × (1 - Tax Rate)
C)Tax Liability = Tax Base × Tax Rate
D)None of these are correct
Q2) For 2016, the amount of exemption that a child can enjoy on any interest, dividends, or capital gains income is limited to:
A)$1,050
B)$1,900
C)$10,000
D)There is no exemption for this type of income.
Q3) With regard to employers, generally, salary payments to employees are deductible but fringe benefit payments are not.
A)True
B)False
Q4) Investment expenses can offset ordinary income.
A)True
B)False
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Chapter 13: Working With the IRS
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63 Flashcards
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Sample Questions
Q1) The IRS:
A)facilitates the processing of tax returns
B)enforces the internal revenue laws of the United States
C)is a bureau within the U.S. Department of Finance
D)all of these are correct
Q2) What are the functions performed by the mathematical/clerical error program?
Q3) What are the "dos and don'ts" in negotiating with a government auditor?
Q4) "If a taxpayer cannot resolve his or her dispute with the IRS administratively, he or she may seek judicial relief." Explain how a taxpayer can seek relief through the judicial system.
Q5) Signed into law in 1996, it guarantees taxpayers various rights to representation before the IRS. What is it called?
A)the Constitution
B)the Sixteenth Amendment
C)the Taxpayer Bill of Rights
D)the Taxpayer Advocate
Q6) The IRS was established by Congress on July 1, 1862, to meet the fiscal needs of the Civil War.
A)True
B)False
Page 15
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Chapter 14: Tax Practice and Administration: Sanctions, Agreements,
and Disclosures
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Sample
Questions
Q1) Could a taxpayer make such a small amount of income that a tax return not be filed and still have an unlimited statute of limitations on assessment?
Q2) A fraudulent failure-to-file tax return is subject to a 25 percent monthly penalty.
A)True
B)False
Q3) Interest imposed by the IRS is compounded:
A)annually
B)quarterly
C)daily
D)monthly
Q4) Assessable penalties typically are expressed as a flat dollar amount and are usually imposed on third parties, such as tax return preparers.
A)True
B)False
Q5) What are the requirements to be satisfied for the issue of an injunction by the IRS against a TRP who is guilty of misconduct to prohibit him or her from engaging in such misconduct or from practicing as a return preparer?
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