Tax Policy and Administration Final Exam
Course Introduction
This course explores the principles and practices underlying the formulation and implementation of tax policy in both domestic and international contexts. Students will examine the design of tax systems, including issues of equity, efficiency, and simplicity, and analyze how governments administer and enforce tax laws. Key topics include tax compliance, audit procedures, anti-avoidance measures, and the role of tax policy in economic development. The course also covers contemporary challenges faced by tax authorities, such as digitalization, globalization, and combating tax evasion, providing students with a comprehensive understanding of how tax policy influences fiscal stability and public welfare.
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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Sample Questions
Q1) According to Circular 230, the "best practices" rules are:
A)mandatory for all tax practitioners
B)restricted only to attorneys and CPAs
C)aspirational, to act as goals for tax practitioners
D)enforced by disbarment from practice before the IRS
Answer: C
Q2) Tax litigation is a process of:
A)participating in an administrative audit
B)settling tax-related disputes in a court of law
C)filing amended tax returns as prescribed by tax laws
D)arranging a taxpayer's affairs to minimize tax liabilities
Answer: B
Q3) State Boards of Accountancy are the organizations with responsibility to license public accountants in each state.
A)True
B)False
Answer: True
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Chapter 2: Tax Research Methodology
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Sample Questions
Q1) All of the following are goals of tax research EXCEPT:
A)to balance the need for efficiency against the need for thoroughness
B)to balance the client's tax goals with the client's nontax, personal considerations
C)to find a defensible solution to a client's problem
D)to find a perfect solution to a client's problem, no matter how long it takes
Answer: D
Q2) All primary source material has the same precedential value.
A)True
B)False
Answer: False
Q3) The distinction between primary and secondary authority is important for which of the following reasons?
A)to meet the accuracy threshold of "substantial authority"
B)to avoid penalties under Section 6662 of the Code
C)to search properly with connectors and wildcards
D)to meet the accuracy threshold of "substantial authority" and to avoid penalties under Section 6662 of the Code
Answer: D
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Chapter 3: Constitutional and Legislative Sources
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Sample Questions
Q1) Which of the following statements is CORRECT regarding the enactment into law of a tax bill?
A)A tax bill must always be signed by the President to become law.
B)A tax law must be approved by the Treasury Department.
C)A tax law must either be signed into law by the President or Congress must override a presidential veto of the proposed law.
D)None of these are correct.
Answer: C
Q2) Trade or business deductions are contained in Code Section 62.
A)True
B)False
Answer: False
Q3) The Joint Conference Committee is called on to resolve differences between the House Ways and Means Committee version and the full House version of tax legislation.
A)True
B)False
Answer: False
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Chapter 4: Administrative Regulations and Rulings
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Sample Questions
Q1) Which of the following Regulations deals with estate taxes?
A)Reg. §1.162-21(a)(2)
B)Reg. §20.2503-4
C)Reg. §1.6662-5T
D)Reg. §31.3121(a)-2
E)None of these are correct.
Q2) Which of the following statements is INCORRECT regarding the effective date of Regulations?
A)A Regulation becomes effective 18 months after the statute on which it is based was enacted.
B)A Regulation is effective on the date on which the Regulation is filed with the Federal Register.
C)Temporary Regulations are effective immediately upon publication.
D)All of these are correct.
Q3) Field Service Advice (FSAs) are binding guidance provided by the IRS National Office to IRS service centers.
A)True
B)False
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) The Small Cases Division of the Tax Court can hear only cases involving a disputed deficiency, including penalties, of $15,000 or less.
A)True
B)False
Q2) In which of the following courts is a jury trial available?
A)U.S. District Courts
B)Tax Court
C)U.S. Court of Federal Claims
D)All of the above.
Q3) Which of the following statements is INCORRECT regarding headnotes and case briefs?
A)Headnotes are usually inserted at the beginnig of a case by the court reporter editors.
B)Headnotes help researchers quickly determine if a case is relevant.
C)Case briefs are a summary of a case identifying the facts, issue, holding and analysis.
D)All of the above statements are correct.
Q4) The Tax Court was formerly known as the Board of Tax Appeals.
A)True
B)False
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Chapter 6: Tax Services Ria Checkpoint
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Sample Questions
Q1) There are four primary search methods in Checkpoint: (1) keyword, (2) contents, (3) index, and (4) citation.
A)True
B)False
Q2) 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 Checkpoint.
Q3) The starting point in approaching any tax research problem is to:
A)browse the Table of Contents
B)formulate relevant tax questions and identify the issues associated with them
C)evaluate the tax problem and suggest solutions to the taxpayers
D)none of these are correct
Q4) What is the difference between a Terms & Connectors search and an Intuitive Search in Thomson Reuters Checkpoint? Give an example of each.
Q5) Why would a practitioner need a commercial, subscription tax service when most tax sources are available on the Internet for free?
Q6) Why would a researcher use a Table of Contents or Index search instead of a keyword search?
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Chapter 7: Tax Services CCH Intelliconnect
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Q1) Contents search is one of IntelliConnect's primary ways of searching for information.
A)True
B)False
Q2) The four primary ways to search in IntelliConnect are: (1) keyword, (2) contents, (3) index, and (4) citation. Briefly describe each one.
Q3) All commercial citators allow the researcher to retrieve entries by entering either the case name or case citation.
A)True
B)False
Q4) The CCH annotated service is the:
A)Federal Tax Coordinator
B)Federal Tax Expert
C)Standard Federal Tax Reporter
D)United States Tax Reporter
Q5) The CCH Citator lists journal articles published by WG&L.
A)True
B)False
Q6) Distinguish between the following terms: "cited case" and "citing case."
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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) The more than 500 BNA Portfolios are classified into five series: Federal, International, State, Accounting, and:
A)Citations
B)Regulations
C)Municipal
D)Estate
Q3) The Westlaw research service which helps determine whether a case, law, or regulation remains good law is called:
A)KeyCite
B)KeySearch
C)WestlawNext
D)Campus Research
Q4) What are KeySearch and the West Key Number System?
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Chapter 9: Multijurisdictional and Other Research
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Sample Questions
Q1) Originally, the International Bureau of Fiscal Documentation (IBFD) was simply a document repository, but now it provides expert research products.
A)True
B)False
Q2) U.S. treaties can be accessed quickly in the BNA International Portfolio under which heading?
A)Country Portfolios
B)Global Tax Guide
C)Tax Treaties
D)International Tax Monitor
Q3) From an economic perspective, the objective of the international tax rules of each country should be to:
A)prevent other countries from copying it
B)ease taxing system interactivity
C)shelter profits
D)discourage investments
Q4) Discuss in brief about some of the most useful resources offered within the CCH International Tax Service.
Q5) "The Code provisions always take precedence over treaty provisions." Comment.
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Chapter 10: Financial Accounting Research
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Sample Questions
Q1) Subsequent to Codification, changes to guidance in the Codification are now made through:
A)accounting standards updates
B)XBRL elements
C)issuance of a new statement of position
D)all of the these are correct
Q2) The FASB Codification "Join Sections" allows the related sections of a topic to be joined into a single document so that the guidance across all sections within a topic can be reviewed at the same time.
A)True
B)False
Q3) What is meant by "tax position"? Explain the requirements of ASC 740 for the reporting of tax positions.
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
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Chapter 11: Communicating Research Results
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Sample Questions
Q1) Generally, the file memo should be accompanied in the file by briefs of one or more pertinent cases or administrative pronouncements.
A)True
B)False
Q2) State the purposes for which a file memorandum is designed.
Q3) Public speaking is an important part of the tax practitioner's professional life and can be an accurate predictor of success.
A)True
B)False
Q4) 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
Q5) The two major elements of a client file are:
A)invoices and full-text court opinions
B)internal firm memos and invoices
C)a client letter and a research memo
D)a written summary of telephone conversations and e-mails
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Chapter 12: Tax Planning
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Sample Questions
Q1) The first requirement for effective tax planning is awareness on the part of decision makers.
A)True
B)False
Q2) The tax rate that is the present value of the additional tax on one dollar of additional taxable income is referred to as the:
A)nominal tax rate
B)effective tax rate
C)before-tax cost
D)none of these are correct
Q3) Most sales and property taxes in the United States employ a:
A)proportional rate structure
B)regressive rate structure
C)progressive rate structure
D)consumption rate structure
Q4) The effective average tax rate can be found by dividing the total tax liability by the economic income.
A)True
B)False
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Chapter 13: Working With the IRS
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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) The number of routine math errors has increased sharply due to increase in electronic filing.
A)True
B)False
Q3) Explain how the discriminant function system works.
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Chapter 14: Tax Practice and Administration: Sanctions, Agreements,
and Disclosures
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Sample Questions
Q1) A taxpayer can avoid the failure-to-file penalty if an extension of the return's due date is granted by the IRS.
A)True
B)False
Q2) A failure-to-pay penalty is imposed when the taxpayer fails to pay either a tax shown on his or her return or an assessed deficiency within 10 days of an IRS notice or demand.
A)True
B)False
Q3) Interest imposed by the IRS is compounded:
A)annually
B)quarterly
C)daily
D)monthly
Q4) If a taxpayer understates gross income by 25 percent, the IRS has a 6-year statute of limitations on assessment.
A)True
B)False
Page 16
Q5) How do the courts define reasonable cause? List the examples of reasonable cause.
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