Question 1

Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely dampen the tax incentive for purchasing capital assets.

Accepted Answer

A) True 
 B)False

Question 2

One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit it would provide businesses including making them more efficient).

Accepted Answer

A) True 
 B)False

Question 3

The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state taxes to a maximum of $10,000.

Accepted Answer

A) True 
 B)False

Question 4

Federal tax legislation generally originates in what committee?

Accepted Answer

A)   House Budget Committee.
B)   Senate Finance Committee.
C)   House Ways and Means Committee.
D)   House Taxation Committee.
E)   None of these.F) B) and E)
G) B) and C)

Question 5

Which provision could best be justified as a means of controlling the economy?

Accepted Answer

A)   Write-off of research and development expenditures.
B)   The § 179 immediate expensing of depreciable capital expenditures.
C)   Amortization of pollution control facilities.
D)   The rehabilitation tax credit.
E)   None of these.F) C) and D)
G) B) and D)

Question 6

Revenue Procedures deal with the internal management practices and procedures of the IRS.

Accepted Answer

A) True 
 B)False

Question 7

Which trial court normally has 16 judges?

Accepted Answer

A)   U.S. Tax Court.
B)   U.S. Court of Federal Claims.
C)   U.S. Supreme Court.
D)   U.S. Court of Appeals.
E)   None of these.F) A) and E)
G) B) and E)

Question 8

The Golsen rule no longer applies to the U.S. Tax Court.

Accepted Answer

A) True 
 B)False

Question 9

How does a treaty with a foreign country impact a section in the Internal Revenue Code?

Accepted Answer

The United States enters into tax treati...

Question 10

The annual gift tax exclusion in 2019 is $15,000.

Accepted Answer

A) True 
 B)False

Question 11

A Technical Advice Memorandum is issued by:

Accepted Answer

A)   Treasury Department.
B)   National Office of the IRS.
C)   Office of Chief Council.
D)   Area Director.
E)   None of these.F) B) and C)
G) None of the above

Question 12

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

Accepted Answer

A)   Arm's length concept.
B)   Continuity of interest concept.
C)   Tax benefit rule.
D)   Substance over form concept.
E)   None of these.F) A) and B)
G) B) and E)

Question 13

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Accepted Answer

A) True 
 B)False

Question 14

Which provision is not justified by social considerations?

Accepted Answer

A)   Refundable earned income credit.
B)   Adoption tax credit.
C)   Like-kind exchange treatment.
D)   Disallowance of illegal kickbacks.
E)   None of these.F) B) and E)
G) B) and C)

Question 15

Which provision could best be justified as encouraging small business?

Accepted Answer

A)   Ordinary loss allowed on § 1244 stock.
B)   Percentage depletion.
C)   Charitable contributions deduction.
D)   Interest deduction on home mortgage.
E)   None of these.F) A) and B)
G) A) and C)

Question 16

Which of the following statements about an acquiescence is correct?

Accepted Answer

A)   An acquiescence is issued in the Federal Register.
B)   Acquiescences are published only for certain regular decisions of the U.S. Tax Court.
C)   An acquiescence is published in the Internal Revenue Bulletin.
D)   The IRS does not issue acquiescences to adverse decisions that are not appealed.
E)   All of these are correct.F) A) and B)
G) C) and D)

Question 17

Letter rulings are issued by the National Office of the IRS.

Accepted Answer

A) True 
 B)False

Question 18

The favorable treatment of research and development expenses is one means of controlling the economy.

Accepted Answer

A) True 
 B)False

Question 19

Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.

Accepted Answer

A) True 
 B)False

Question 20

The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.

Accepted Answer

A) True 
 B)False

Exam 1: Understanding and Working With the Federal Tax Law

Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.

Correct AnswerverifiedShow Answer

Revenue Procedures deal with the internal management practices and procedures of the IRS.

Correct AnswerverifiedShow Answer

Which provision could best be justified as encouraging small business?

Correct AnswerverifiedShow Answer

One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit it would provide businesses including making them more efficient).

Correct AnswerverifiedShow Answer

The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state taxes to a maximum of $10,000.

Correct AnswerverifiedShow Answer

Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely dampen the tax incentive for purchasing capital assets.

Correct AnswerverifiedShow Answer

The favorable treatment of research and development expenses is one means of controlling the economy.

Correct AnswerverifiedShow Answer

The annual gift tax exclusion in 2019 is $15,000.

Correct AnswerverifiedShow Answer

Federal tax legislation generally originates in what committee?

Correct AnswerverifiedShow Answer

Which provision is not justified by social considerations?

Correct AnswerverifiedShow Answer

Letter rulings are issued by the National Office of the IRS.

Correct AnswerverifiedShow Answer

Which provision could best be justified as a means of controlling the economy?

Correct AnswerverifiedShow Answer

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

Correct AnswerverifiedShow Answer

Which of the following statements about an acquiescence is correct?

Correct AnswerverifiedShow Answer

A Technical Advice Memorandum is issued by:

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The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.

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The Golsen rule no longer applies to the U.S. Tax Court.

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How does a treaty with a foreign country impact a section in the Internal Revenue Code?

Correct AnswerverifiedThe United States enters into tax treati...View AnswerShow Answer

Which trial court normally has 16 judges?

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In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Correct AnswerverifiedShow Answer

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The United States enters into tax treati...
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