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TAX RESEARCH QUIZ 2: CHAPTERS 3 AND 4 Multiple Choice Questions (Indicate the Best Answer) Chapter 3: 1. The following are trial courts from which a taxpayer may choose in initiating his or her tax lawsuit: a. The Supreme Court. b. The Tax Court. c. The Court of Appeals for the 6th Circuit. d. The Court of Federal Claims. e. Two of the above. 2. Stare decisis is: a. a doctrine imposed on the courts by Congress which requires all courts to follow decisions of the Tax Court. b. a self-imposed doctrine which requires all courts to follow only decisions of the Supreme Court. c. a self-imposed doctrine which requires courts to follow their prior decisions regarding an interpretation of the law when deciding future cases. d. None of the above. 3. The following characterize lawsuits which are heard in the Small Claims Division of the Tax Court: a. The taxpayer may appear pro se. b. The taxpayer's amount in controversy (claim) does not exceed $50,000 excluding interest and penalties. c. The taxpayer is free to appeal an adverse decision. d. None of the above. 4. The following characterize lawsuits which are heard in regular Tax Court: a. The request for hearing must be filed with the Court within 120 days of receiving a statutory notice of deficiency. b. The taxpayer must pay the deficiency up-front and sue for a refund. c. A taxpayer's case may be heard by one judge or the entire panel en banc. d. The taxpayer has a right to a jury trial. 5. A regular Tax Court case is appealed to: a. the Court of Appeals for the Circuit in which the taxpayer resides. b. the Court of Appeals for the Federal Circuit. c. the Circuit Court of appeals with the most favorable precedent. d. None of the above. 6. Pursuant to the Golsen Rule: a. the Tax Court must follow all Circuit Court of Appeals decisions. b. the Tax Court must follow decisions of the Court of Appeals for the Circuit in which the taxpayer's appeal may be filed. c. the Tax Court may adopt its own interpretation of the tax law, if the taxpayer's Circuit Court has not ruled on the matter. d. Two of the above. e. None of the above. 7. A trial court of general jurisdiction which does not specialize in any particular type of law is: a. the Tax Court. b. Court of Appeals for the Federal Circuit. c. the Supreme Court. d. a United States District Court. 8. The following statement best characterizes the U.S. District Courts: a. They are courts of general jurisdiction and can hear any type of case; therefore, the judges are not specialists in any particular area of the law. b. The judges are not specialists and therefore do not rely heavily on the administrative pronouncements of the Service for guidance in interpreting the tax law. c. The taxpayer is not entitled to a trial by jury, because juries are more easily swayed by emotion in factual disputes. d. None of the above. 9. The following is true of a Circuit Court of Appeals: a. The taxpayer who originated his claim in a U.S. District Court may be appeal the decision to any Circuit Court of Appeals the taxpayer chooses. b. The Court of Appeals may affirm the lower court decision, reverse the decision or retry the facts on appeal. c. The Circuit Courts of Appeal follow stare decisis and are bound by their previous decisions, but they are not required to follow the decisions of other Circuits. d. All of the above. 10. The United States Supreme Court will grant a writ of certiorari in a tax case if: a. it involves tax issues of significant importance involving existing law, but which require interpretation. b. it involves a provision of the of tax law which has been the subject of conflicting interpretation by the Circuit Courts of Appeal. c. Both A and B. d. Neither A nor B. 11. Official court decisions involving tax controversies are published in: a. Tax Court Reports or T.C. b. the Federal Supplement Reporter or F. Supp. c. the Federal Reporter or F., F.2d, F.3d, and F.4th. d. Two of the above. e. All of the above. 12. The citation, Kean v. Comm'r, 407 F.3d 186 (CA3, 2005), 2005-1 USTC 50,397, indicates that this case: a. was officially reported in the 3rd volume of the Federal Reporter on Page 407. b. was unofficially reported in CCH's United States Tax Cases in Volume 2005-1 at paragraph 50,397. c. was officially reported in Volume 407 of the 3rd printing of the Federal Reporter on Page 186. d. Both A and B. e. Both B and C. 13. The following is an example of a Citator which provides details of how later cases or rulings have dealt with a case of interest in their decisions: a. CCH Citator. b. Shepard's Citator c. the Federal Reporter. d. All of the above. 14. Rules of thumb to be used in determining the authoritative value of a judicial decision include: a. Tax Court decisions carry less weight than District Court opinions. b. Tax Court Memorandum decisions carry more weight than Tax Court Regular opinions. c. District Court opinions carry less weight than Tax Court opinions. d. a concurring opinion carries more weight than a majority opinion. e. All of the above. 15. The taxpayer should consider filing his initial lawsuit in the Tax Court if: a. he or she has the money to pay the deficiency before trial. b. his or her case requires a good understanding of technical provisions of the tax law and his legal arguments which have merit. c. his or her case involves factual issues which will appeal to the emotions of a jury. d. None of the above. Chapter 4: 1. Which of the following is a step in the tax research process: a. Searching for authority. b. Making recommendations. c. Summarizing the facts. d. Both A and B. e. None of the above. 2. Which facts are relevant to a determination whether the client, a hair dresser, may deduct an expense? a. The expense was paid with a credit card. b. The expense was incurred to pay for hair dyes. c. The expense was paid by client's mother. d. All of the above. 3. Which facts are relevant to a determination whether client has taxable income? a. Client sold her house in 2013. b. Client's mother lived with her. c. Client purchased her house in 2010. d. Both A and C. e. Both A and B. 4. A good source for the practitioner to gain an understanding of unfamiliar areas of the tax law is through: a. a tax treatise. b. a Revenue Ruling. c. the Client. d. None of the above. 5. Which of the following is true about determining the issues to be answered for the client? a. Client issues may arise after a transaction is completed. b. Client issues may arise before a transaction is completed. c. The practitioner may identify issues of interest which come to light after she reads about a change in the tax law. d. Both A and B. e. All of the above. 6. At tax time, April 2014, a client asks you to determine if the gift of stock that he made to his alma mater on December 31, 2013, is deductible. a. This is an example of planning research. b. This is an example of compliance research. c. This is an example of open-ended research. d. This is an example of policy research. 7. Professor McDonough is intrigued by the patriarchal policy underlying certain tax regulations which explain the rules for transfer payments made incident to divorce. He proposes to research the topic. a. This is an example of policy research. b. This is an example of planning research. c. This is an example of open-ended research. d. This is an example of closed transaction research. 8. A researcher must find his answer to a taxpayer's issue in which of the following authorities: a. CCH's Tax Research Consultant. b. The Journal of Accountancy. c. The Internal Revenue Code. d. RIA's Federal Tax Coordinator. 9. Analyzing the authorities uncovered by tax research includes the following: a. Reading annotations and editorial information included in tax services. b. Determining whether a primary authority is relevant, that is, sufficiently factually similar to the case of the taxpayer to be of use. c. Determining that the authority is still good law through the use of a Citator. d. Both A and B. e. Both B and C. 10. In evaluating conflicting primary authorities the researcher should: a. choose between the authorities if a vertical conflict exists. b. follow the Tax Court decision that conflicts with Circuit Court of Appeals decision for the circuit in which the taxpayer resides. c. follow the Circuit Court of Appeals decision for the circuit in which the taxpayer is required to file his appeal if the decision conflicts with that of the Tax Court. d. None of the above. 11. In communicating research results to a client the following principles should be followed: a. Use technical jargon. b. Provide limiting assumptions when writing to a client. c. Always provide full citations. d. Ignore the level of your reader's sophistication. 12. In a research memo, the section that provides the analysis of primary authorities should: a. begin with the relevant Code provisions and how they are relevant to the issue, then, explain the applicable Regulations, administrative pronouncements and cases. b. begin with any relevant cases or Rulings and then move to the Code and finally the regulations. c. begin with the relevant Code sections and stop there. d. begin with cases and Rulings and stop there. 13. Print or internet tax services published by RIA and CCH can be organized: a. according to the Code Sections in the Internal Revenue Code, in order. b. according to cases and rulings as they are decided and then linked to the relevant code section. c. along logical topic lines, including all relevant code sections within the topic. d. Both A and B. e. Both A and C. 14. Ingrid is deciding whether to rent an office for her business or to buy an office building. a. This is a closed planning research transaction. b. This is an open-ended planning research transaction. c. This is an open-ended compliance research transaction. d. This is a closed compliance research transaction. 15. Tax research begins: a. with the researcher collecting the relevant facts through client interviews and documentation. b. with a formulation of the issues or questions the client wants resolved. c. by locating the relevant primary tax authority. d. by locating the relevant editorial explanation in a tax service