Question

1. Every tax bill which becomes law must comply with:

A. Treasury department policy
B. Presidential economic and social policy
B. The U.S. constitution
D. None of the above

2. In general, the answer to all tax questions or issues must be traced to:

A. A tax textbook
B. The Internal Revenue Code
C. A supreme Court decision
D. And IRS Letter Ruling

3. Administrative sources of the tax law, such as IRS regulations, revenue rulings and revenue procedures

A. Do not have the force of law because they are the opinions of the secretary of treasury
B. Are official interpretations of the tax law made by the department of the treasury and the IRS
C. All of the above
D. Are generally drafted by the supreme court

4. Decisions of federal court on cases and controversies involving the application or interpretation of tax law are known as

A. Administrative authority
B. Judicial authority
C. Legislative authority
D. None of the above

5. A regular tax court case is appealed to:

A. The court of appeals for the circuit in which the taxpayer resides
B. The circuit court of appeals with the most favorable precedent
C. None of the above
D. The court of appeals for the federal circuit

6. Pursuant to the Golden Rule

A. The tax court must follow decisions of the court of appeals for the circuit in which the taxpayer’s appeal may be filed
B. None of the above
C. Two of the above
D. The tax court must follow all circuit court of appeals decisions
E. The tax court may deposit its own interpretation of the tax law, if the tax payer’s circuit court has not ruled on the matter.

7. A private letter ruling

A. Is issued in response to a question that arises during an audit
B. Is a response to a specific taxpayer’s request for an official IRS interpretation of a tax law provision to that taxpayer’s given fact situation
C. None of the above
D. Is a district director’s response to a taxpayer’s query regarding the tax consequences of a specific transaction or event

Answer 1

1.Every Tax bill which becomes law must comply with THE U.S. CONSTITUTION (C)

Reason: U.S. Constitution is the preamble of the country which is prepared with the consent of all people ,it is established to provide justice,promote welfare for the country .Hence the law must comply with US Constitution

2.In general ,the answer to all tax questions or issues are traced to THE INTERNAL REVENUE CODE ( B)

Reason: The Internal Revenue code defines the scope and operations of the entire U.S.Tax system .It is recognised as one of the longest and most complex laws in the world.Hence all tax related questions are available in Internal Revenue code which is administered by Internal Revenue Service.

3.Administrative sources of tax law such as IRS Regulations,Revenue Rulings,Revenue procedures are THE OFFICIAL INTERPRETATION OF THE TAX LAW MADE BY THE DEPARTMENT OF TREASURY AND IRS.(B)

Reason: Revenue Rulings and Procedures are the official pronouncements of the IRS ,where as Regulations are approved by Secretary of treasury.hence B statement is valid.

4.Decisions of federal court on cases and controversies involving the application or interpretation of tax law are known as JUDICIAL AUTHORITY ( B )

Reason:The role of Judiciary is to settle and resolve all cases and controversies under the law.citizens look at Judiciary to with hold their rights.

5.A Regular tax court case is appealed to THE COURT OF APPEALS FOR THE CIRCUIT IN WHICH THE TAX PAYEPAYER RESIDES . ( A)

Reason :The decisions in regular cases can be appealed to U S. Court of appealsi.e U.S Tax court implies the court of appeals for the circuit in which tax payer reside or appeals the case.tax payer approaches if there is deficiency in tax .etc.

6.Pursuant to the Golden Rule THE TAX COURT MUST FOLLOW THE DECISIONS OF COURT OF APPEALS IN WHICH TAX PAYERS APPEAL MAY BE FILED AND THE TAX COURT MAY DEPOSIT ITS OWN INTERPRETATION OF TAX LAW,IF THE TAX PAYERS CIRCUIT COURT HAS NOT RULED ON THAT MATTER. ( A& E )

Reason : Since Tax Court is independent of IRS, it has the power of the circuit court has no rule on that matter ,it can make its own interpretation Tax court is a court of appeals for circuit in which tax payer resides.it must follows those decisions.

7.A Private letter ruling is a RESPONSE TO A SPECIFIC TAX PAYERS REQUEST FOR AN OFFICIAL IRS INTERPRETATION OF A TAX LAW PROVISION TO THAT TAX PAYERS GIVEN FACT SITUATION ( B )

Reason: The concept of Private letter ruling is a written statement issued to a tax payer that interprets and applies tax laws to the taxpayers representative set of facts.