TAX 3300 Chapter Notes - Chapter 2: Internal Revenue Service, United States Senate Committee On Finance, Internal Revenue Code

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11 Sep 2017

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Include the constitution, tax treaties, and the internal revenue code. Federal tax legislation generally originates in the house of representatives (house. Joint conference committee (if house and senate differ) Approval or veto by president incorporation into code. Provide guidance on meaning and application of code. Proposed regulations: under code section 2 for ex are cited as prop. reg. sections 1. 2. Finalized regulations: have the force and effect of law. Temporary regulations: relating to matters where immediate guidance is important. Revenue rulings: are official pronouncements of the national office of the irs. Revenue procedures: issued in the same manner as revenue rulings but deal with the internal management practices and procedures of the irs.

Related Questions

1. Which of thesestatements is true?

The federal government's authority for levying an individualincome tax emanates from the 16th Amendment to theConstitution.

Primary sources of tax information include pronouncements fromall three branches of the government.

The Internal Revenue Code, first codified (i.e., arrangedindividual revenue acts into a logical sequence and thenincorporated them into the Federal statutes) in 1939, was mostrecently recodified in 1986.

While statutory sources of the law typically originate in theHouse of Representativesâ House Ways and Means Committee, they mayalso originate in the Senate as riders to other legislativeproposals.

e. All of them.

f. All butone of them (specify all true responses).

g. More than one,but not all but one, of them (specify all true responses).

h. None ofthem.

2. Which of thesestatements is true?

a. When the Houseand Senate versions of a tax bill differ, the Joint ConferenceCommittee works out a compromise tax bill that satisfies both theHouse and the Senate.

b. The Committee Reports accompanying proposed legislation arevaluable sources for ascertaining the intent of Congress.

c. A tax bill has a greater likelihood of being changed in the Housethan it does in the Senate because each representative hasconsiderable latitude to make amendments to the bill.

The President must sign a tax bill before it can become law.

e. All of them.

f. All butone of them (specify all true responses).

g. More than one,but not all but one, of them (specify all true responses).

h. None ofthem.

I need a reason for whick choice thatis false.

Regulations are

	A. equal in authorityto legislation if statutory
	B. equal in authorityto legislation
	C. presumed to bevalid and to have almost the same weight as the IRC
	D. equal in authorityto legislation if interpretative

2) Which of the followingstatements regarding proposed regulations is not correct?

	A. Practitioners andother interested parties may comment on proposed regulations.
	B. Proposedregulations expire after 3 years.
	C. Proposed andtemporary regulations are generally issued simultaneously.
	D. Proposedregulations do not provide any insight into the IRS'sinterpretation of the tax law.

3) Identify which of thefollowing statements is false.

	A. Members from boththe House and the Senate are on the Conference Committee.
	B. When tax advisorsspeak of the tax law, they usually have in mind just the InternalRevenue Code.
	C. Records ofcommittee hearings are helpful in determining Congressionalintent.
	D. All arefalse.

4) Which of the followingstatements about a partnership is true?

	A. Partners are taxedon distributions from a partnership.
	B. A partnership is ataxpaying entity.
	C. Partners are taxedon their allocable share of income whether it is distributed ornot.
	D. Partners areconsidered employees of the partnership.

5) Which of the followingstatements is incorrect?

	A. The number of Scorporation shareholders is unlimited.
	B. S corporationsmust allocate income and expenses to their shareholders based ontheir proportionate ownership interest.
	C. S corporationincome is taxed to shareholders when earned.
	D. S corporationlosses can offset shareholder income from other sources.

6) Which of the followingstatements is incorrect?

	A. Limited partners'liability for partnership debt is limited to their amount ofinvestment.
	B. In a generalpartnership, all partners have unlimited liability for partnershipdebts.
	C. In a limitedpartnership, all partners participate in managerialdecision-making.
	D. All of thestatements are correct.

7) Three members form an LLC inthe current year. Which of the following statements is incorrect?

	A. The LLC can electto have its default classification ignored.
	B. The LLC's defaultclassification under the check-the-box rules is as apartnership.
	C. The LLC can electto be taxed as a C corporation with no special taxconsequences.
	D. If the LLC electsto use its default classification, it can elect to change itsstatus to being taxed as a C corporation beginning with the thirdtax year after the initial classification.

8) Identify which of thefollowing statements is false.

	A. Under thecheck-the-box regulations, an LLC that has only two members(owners) must be taxed as a partnership.
	B. The check-the-boxregulations permit an LLC to be taxed as a C corporation.
	C. A business neednot be incorporated under state or federal law to be taxed as acorporation.
	D. Once an electionis made to change its classification, an entity cannot change againfor 60 months.

9) Identify which of thefollowing statements is true.

	A. The check-the-boxregulations permit an LLC to be taxed as a C corporation.
	B. Under thecheck-the-box regulations, an LLC that has only two members(owners) default classification is as a partnership.
	C. Once an electionis made to change its classification, an entity cannot change againfor 60 months.
	D. All of thestatements are true.

10) For Sec. 351 purposes theterm property does not include

	A. accountsreceivable
	B. cash
	C. inventory
	D. servicesrendered

11) Identify which of thefollowing statements is true.

	A. The exchange ofstock for services rendered is not a taxable transaction.
	B. The repeal of Sec.351 would result in more existing businesses beingincorporated.
	C. Section 351 wasenacted to allow taxpayers to incorporate without incurring adversetax consequences.
	D. All arefalse.

12) Barry, Dan, and Edithtogether form a new corporation; Barry and Dan each contributeproperty in exchange for stock. Within 2 weeks after the formation,the corporation issues additional stock to Edith in exchange forproperty. Barry and Dan each hold 10,000 shares and Edith willreceive 9,000 shares. Which transactions will qualify fornonrecognition?

	A. Only the secondtransaction will qualify for nonrecognition.
	B. Only the firsttransaction will qualify for nonrecognition.
	C. Because of thestep transaction doctrine neither transaction will qualify.
	D. Both transactionswill qualify under Sec. 351 if they are part of the same plan ofincorporation.

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TAX 3300 Chapter Notes - Chapter 2: Internal Revenue Service, United States Senate Committee On Finance, Internal Revenue Code

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