CHAPTER 17—SOURCES AND APPLICATIONS OF
FEDERAL TAX LAW Key
1. Once a tax law is enacted by Congress, any official interpretations of the law are by subsequent court
decisions.
2. The House Ways and Means Committee holds hearings on proposed revenue bills initiated by the Senate.
3. The primary purpose of the Code of Federal Regulations is to answer questions from taxpayers concerning
specific tax problems.
4. Although temporary regulations have the same binding effect as final regulations, proposed
regulations have no force or effect.
5. Unlike interpretative regulations, legislative regulations are not controlling on a court. Thus, the courts will
not hesitate to substitute their own judgment for that of the Treasury Department.
6. Both revenue rulings and revenue procedures are first published in the Internal Revenue Bulletin and then
eventually published in the Cumulative Bulletin.
7. The Internal Revenue Service may exercise discretion in determining whether to issue a letter ruling to a
particular taxpayer.
8. A letter ruling, or private ruling, is an individual response to a taxpayer, and it is generally understood to
apply to all taxpayers.
9. The three trial courts where tax matters may be litigated—the U.S. District Court, the U.S. Court of Federal
Claims, and the U.S. Tax Court—are all courts of original jurisdiction.
10. In the Small Claims Section of the U.S. Tax Court, the taxpayer forgoes the right to appeal the decision if
she or he loses.
11. An appeal of an adverse decision by the Tax Court may be taken as a matter of right to the appropriate U.S.
Court of Appeals.
12. Under the Golsen rule, the Tax Court follows the decisions of the Circuit Court to which a particular case
would be appealed.
13. It is not possible for the Appellate Court to affirm the decision of a lower court on one particular issue and
reverse it on another.
14. A Writ of Certiorari is the means by which the United States Court of Appeals grants review to a decision of
the Tax Court.
15. In the following citation, Eugene Coloman, 33 TCM 411, T.C. Memo 1974-78, aff d. in 76-2 USTC ¶958l,
38 AFTR2d 76-5523, 540 F.2d 427 (CA-9, 1976), the researcher would know that the original decision in the
trial court was made by the Tax Court in a memorandum decision and that the case on appeal was affirmed by
the Ninth Circuit, U.S. Court of Appeals.
16. The IRS announces its acquiescence or nonacquiescence to the memorandum decisions of the Tax Court.
17. A major difference between primary authorities and secondary authorities is that secondary sources are
merely unofficial interpretations of tax law and have no legal authority.
18. A tax service has limited value because it only summarizes court decisions on a particular point of tax law.
19. For a tax researcher, the weight accorded a particular court decision often may be determined by the reliance
placed on that decision by other courts.
20. Since the enactment of the Tax Equity and Fiscal Responsibility Act, taxpayers are subject to a penalty if
there is a substantial underestimate of tax attributable to a particular treatment for which they have no
substantial authority, unless the treatment is disclosed on the tax return.
21. The body or group that generally initiates revenue bills is
22. Which of the following sources of authority would most likely contain a review of Congress’s intentions
with respect to a particular piece of tax legislation?
23. For the most accurate indication of Congressional intent for the enactment of a particular tax bill, a
researcher would most likely consult the
24. Which of the following statements is not a characteristic of the Internal Revenue Code?
25. Which of the following administrative interpretations would be generally accorded the force and effect of
law?
26. Which of the following best describes IRS interpretative regulations?
27. Which one of the following types of Regulations cannot be cited as authoritative?
28. Temporary regulations are generally issued
29. The difference between regulations and revenue rulings is that
30. Which one of the following authorities is not correctly paired with a source where that authority might be
found?
31. Taxpayers who are in doubt about the particular tax consequences of a contemplated transaction may ask the
IRS for a ruling on the tax question involved. Which one of the following statements is not true?
32. Letter ruling 201107048 was issued in which of the following months.
33. Before litigating a tax case in court, the taxpayer must
34. Which of the following could be a reason for a taxpayer not taking his tax case to a federal court of
appeals?
35. The trial court that a taxpayer may not select is
36. Which of the statements below is not a characteristic of the Tax Court?
37. Which of the following is not a characteristic of U.S. District Courts?
38. A taxpayer may take a case into the District Court
39. Although the Small Tax Division of the U.S. Tax Court allows a taxpayer to obtain a decision with little
formality or expense, a disadvantage is that
40. Which one of the following authorities is not correctly paired with a reporter or case system where that
authority might be found?
41. Which one of the following is not true of the Supreme Court’s appellate jurisdiction?
42. In general, the Supreme Court only hears tax cases when one or more of certain conditions apply. These
conditions exclude which of the following?
43. Which of the following is not true of the Supreme Court’s appellate jurisdiction?
44. All of the following citations are to trial court decisions except
45. Which one of the following is not a citation to a Tax Court decision?
46. Which of the choices below is the publisher in this citation: Johnson v. Oregon, 86-1, USTC 322 (D.Ct.
Cal., 1986).
47. Which one of the following is not a secondary source of tax authority?
48. Which one of the following is not a primary authority of tax law?
49. Tax periodicals are an important source of information for the tax practitioner. Which of the following is not
true about tax periodicals?
50. T lives in a residence owned by her employer. She has worked for her company for more than five years as
a civil engineer. Once or twice a year T entertains clients in the home and she occasionally brings work home
from the office. The house is located in a suburb 15 miles from the downtown office. Would a court be likely to
rule that the employee lives on business premises?
51. When posed with a particularly complex tax question, a researcher with little previous experience with the
issue would be best served at the outset by consulting
52. After completing basic research on a tax question, but before acting on the results of this research, it is wise
to
53. After doing extensive research on a tax question that involved certain matters that did not fall into
established guidelines, the tax researcher made a filing that was based on what he reasonably believed the
current law to be. This interpretation resulted in a substantial tax savings for his client. The return
54. Which of the following is true of revenue rulings?