Federal Tax Research 10th Edition Sawyers

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1. An appeal from the Tax Court is to the:

a. U.S. Court of Appeals where the taxpayer is located.
b. District Court where the taxpayer is located.
c. U.S. Court of Federal Claims
d. Supreme Court

ANSWER: a
POINTS: 1
DIFFICULTY: Easy

2. If taxpayers choose not to pay a tax deficiency, then they must petition which court?
a. the District Court
b. the U.S. Court of Federal Claims
c. the Tax Court
d. the U.S. Court of Appeal

ANSWER: c
POINTS: 1
DIFFICULTY: Easy

3. In which of the following courts does the taxpayer have to pay first and then sue for a refund?
a. the Tax Court Small Cases Division
b. the District Courts and U.S. Court of Federal Claims
c. the U.S. Courts of Appeal
d. All of the above.

ANSWER: b
POINTS: 1
DIFFICULTY: Easy

4. A decision of which of the following court(s) cannot be found in RIA's American Federal Tax Reports (AFTR or
AFTR2d)?
a. the District Courts
b. the Tax Court
c. the Supreme Court
d. the U.S. Court of Federal Claims
e. Only (b) and (c).
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 ANSWER: b
POINTS: 1
DIFFICULTY: Moderate

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 5. In Walter H. Johnson, 34 TCM 1056, ‘34’ stands for the:
a. year of decision
b. page number
c. volume number
d. paragraph number

ANSWER: c
POINTS: 1
DIFFICULTY: Moderate

6. Decisions of which court(s) are published by West Publishing Company in its Federal Supplement (F.Supp.)
Series?
a. District Courts
b. U.S. Court of Federal Claims
c. U.S. Courts of Appeal
d. All of the above

ANSWER: a
POINTS: 1
DIFFICULTY: Moderate

7. In which of the following courts would a taxpayer want to argue an “emotional issue” rather than a “technical”
issue?
a. the Supreme Court
b. the District Courts
c. the U.S. Court of Federal Claims
d. the U.S. Tax Court

ANSWER: b
POINTS: 1
DIFFICULTY: Moderate

8. Which statement is CORRECT regarding the United States Tax Court?

a. The Tax Court will hear any Federal case.
b. The Tax Court is an appeals court.
c. The Tax Court must follow decisions of the District Court with jurisdiction over the taxpayer.
d. None of the above statements are correct.

ANSWER: d
POINTS: 1
DIFFICULTY: Moderate

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 9. A taxpayer who loses in the Small Cases Division of the Tax Court may appeal directly to the:
a. Appellate division of the IRS.
b. District Court in the taxpayer’s circuit.
c. U.S. Court of Appeals in the taxpayer’s circuit.
d. Decisions in the Small Cases Division cannot be appealed.

ANSWER: d
POINTS: 1
DIFFICULTY: Moderate

10. Which of the following is a secondary court reporter?

a. USTC
b. U.S.
c. F.Supp.
d. F.2d.
e. None of the above.

ANSWER: a
POINTS: 1
DIFFICULTY: Moderate

11. Examples of instances where the burden of proof is on the government, rather than on the taxpayer, include:
a. when the IRS uses statistics to recreate income.
b. fraud with intent to evade tax.
c. cases involving corporations with a net worth exceeding $7 million.
d. only (a) and (b).

ANSWER: d
POINTS: 1
DIFFICULTY: Moderate

12. Under the Golsen rule, the Tax Court must:

a. compute the tax liability due the government.
b. reach the same decision in each region of the county.
c. follow the Court of Appeals that has direct jurisdiction over the taxpayer.
d. None of the above.

ANSWER: c
POINTS: 1
DIFFICULTY: Moderate

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 13. Tax Court Memorandum decisions can be located in which of the following reporters?
a. USTC
b. AFTR2d
c. the Tax Court of the United States Reports (T.C.)
d. None of the above

ANSWER: d
POINTS: 1
DIFFICULTY: Moderate

14. Which reporter is the official, government reporter for U.S. Supreme Court tax cases?
a. S.Ct.
b. U.S.
c. AFTR2d
d. The government does not print Supreme Court cases.

ANSWER: b
POINTS: 1
DIFFICULTY: Moderate

15. When a Tax Court decision is said to be entered under Rule 155, it means:
a. the Court computed the refund due the taxpayer.
b. the Court reaches a decision without calculating the tax.
c. the Court must follow the Court of Appeals that has direct jurisdiction over the taxpayer.
d. the case cannot be appealed.

ANSWER: b
POINTS: 1
DIFFICULTY: Moderate

16. An appeal from any of the Circuit Courts of Appeals is to the:

a. U.S. District Court.
b. U.S. Court of Federal Claims.
c. Court of Appeals for the Federal Circuit.
d. U.S. Supreme Court.

ANSWER: d
POINTS: 1
DIFFICULTY: Easy

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 17. In a court case, “dictum” or “dicta” is:
a. a statement or remark that is not necessary to support the court’s decision.
b. the legal concept that bars relitigation on the same set of facts.
c. a judgment that reverses the determination of a jury.
d. none of the above.

ANSWER: a
POINTS: 1
DIFFICULTY: Easy

18. A “writ of certiorari” is:

a. the process by which the Supreme Court agrees to review a lower court decision.
b. a judgment notwithstanding the verdict.
c. the procedure for determining if the authorities can hold an individual in custody.
d. a reversal of the prior decision of a court.

ANSWER: a
POINTS: 1
DIFFICULTY: Easy

19. The United States Tax Cases reporter is published by:

a. RIA.
b. CCH.
c. West Publishing.
d. the Government Printing Office (GPO).

ANSWER: b
POINTS: 1
DIFFICULTY: Moderate

20. The citation ABC v. U.S., 375 F.2d. 456 (1992) tells the tax researcher that this is a decision by which court?
a. a U.S. District Court
b. the Tax Court
c. a U.S. Circuit Court of Appeals
d. Only (a) and (b)

ANSWER: c
POINTS: 1
DIFFICULTY: Moderate

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 21. The citation ABC v. U.S, 967 U.S. 567 (2012) tells the tax researcher that this is a decision by which court?
a. District Court
b. Tax Court
c. Supreme Court
d. Court of Appeals

ANSWER: c
POINTS: 1
DIFFICULTY: Moderate

22. Which of the following statements is CORRECT regarding the U.S. Court of Federal Claims?
a. It hears monetary claims against the Federal government, including tax refund claims.
b. It is a national court based in Washington, D.C.
c. It must apply the law in of the U.S. Court of Appeals in the taxpayer’s circuit.
d. All of the above statements are correct.
e. Only (a) and (b) are correct.

ANSWER: e
POINTS: 1
DIFFICULTY: Moderate

23. In which of the following courts is a jury trial available?

a. U.S. District Courts
b. Tax Court
c. U.S. Court of Federal Claims
d. All of the above.

ANSWER: a
POINTS: 1
DIFFICULTY: Moderate

24. Which of the following statements is INCORRECT regarding headnotes and case briefs?
a. Headnotes are usually inserted at the beginnig of a case by the court reporter editors.
b. Headnotes help researchers quickly determine if a case is relevant.
c. Case briefs are a summary of a case identifying the facts, issue, holding and analysis.
d. All of the above statements are correct.

ANSWER: d
POINTS: 1
DIFFICULTY: Moderate

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 25. Where are current U.S. Court of Federal Claims decisions published?
a. West’s U.S. Court of Federal Claims reporter (Fed. Cl.)
b. West’s Federal Reporter, Third Edition (F.3d.)
c. West’s Federal Supplement series (F. Supp.)
d. None of the above.

ANSWER: a
POINTS: 1
DIFFICULTY: Moderate

26. Either the taxpayer or the IRS may initiate legal proceedings in the Federal court system.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Easy

27. Judicial decisions constitute a secondary source of the tax law.

a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Easy

28. The common form of legal citation is as follows: case name, volume number, page number, reporter abbreviation.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

29. The two levels of appellate courts in the Federal court system are the U.S. Courts of Appeals and the U.S. Supreme
Court.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

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 30. In most tax cases, the Internal Revenue Code places the burden of proof on the government.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Easy

31. The Tax Court was formerly known as the Board of Tax Appeals.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Easy

32. District Court judges hearing tax cases are tax specialists.
a. True
b. False

ANSWER: False
RATIONALE: FEEDBACK: District Court judges hearing tax cases are generally not tax specialists. Tax Court
judges are tax specialists.
POINTS: 1
DIFFICULTY: Moderate

33. A regular Tax Court decision generally involves a new or unusual point of law, as determined by the Chief Judge of
the Court.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

34. The Small Cases Division of the Tax Court can only hear cases involving a disputed deficiency, including penalties,
of $15,000 or less.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

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 35. The U.S. Court of Federal Claims is a trial-level court.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

36. There are 11 Circuit Courts of Appeals in the Federal court system.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

37. The appellant is the party who appeals a decision to a higher court.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Easy

38. Each U.S. Court of Appeals is independent and need not follow other Circuit Courts in making their decisions.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

39. En banc refers to a court case heard by the full court.

a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

40. Tax Court Summary Opinions are published in a printed reporter by the Government Printing Office (GPO).
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

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 41. District Courts hear cases based on the entire U.S. Code, not just the Internal Revenue Code.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

42. The U.S. Tax Court may examine the entire return of a taxpayer whose case it is hearing.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

43. If the Supreme Court refuses to review a lower case, the Supreme Court is upholding the lower court decision.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

44. If the taxpayer’s Circuit Court of Appeals has not yet ruled on an issue, a researcher should not consider a decision
on the same issue by a Court of Appeals outside of the taxpayer’s circuit.
a. True
b. False

ANSWER: False
POINTS: 1
DIFFICULTY: Moderate

45. District Court decisions can vary significantly among the districts.
a. True
b. False

ANSWER: True
POINTS: 1
DIFFICULTY: Moderate

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 46. Identify the publisher, citation abbreviation, and types of cases that can be found in two of the three reporters given
below.

U.S. Tax Cases

Federal Reporter
American Federal Tax Reports

ANSWER: U.S. Tax Cases

Published by Commerce Clearing House

Citation Abbreviation: USTC
Decisions included: Supreme Court tax cases
Courts of Appeal tax cases
District Court tax cases
U.S. Court of Federal Claims and Court of Claims tax cases

Federal Reporter

Published by West Publishing Company

Citation Abbreviation: F. F.2d. and F.3d.
Decisions included: All Court of Appeals decisions
Pre-1982 Court of Claims decisions

American Federal Tax Reports

Published by RIA
Citation Abbreviation AFTR and AFTR2d
Decisions included: Supreme Court tax cases
Courts of Appeal tax cases
District Court tax cases
U.S. Court of Federal Claims and Court of Claims tax cases
POINTS: 1
DIFFICULTY: Challenging

47. Why would a taxpayer want to bring a case in the U.S. Court of Federal Claims?

ANSWER: The U. S. Tax Court and District Court of Appeals limit their cases to a geographic appellate circuit
while the Federal Claims Court appeals their actions to the Federal Circuit Court of Appeals. The
different circuits may have different precedent on similar tax issues. A taxpayer would want to
bring a case in the U.S. Court of Federal Claims if the Court of Appeals in the taxpayer’s circuit
has decided the issue adversely to the taxpayer, and the Federal Circuit Court of Appeals, which
establishes precedent for the U.S. Court of Federal Claims, has established a rule favorable to the
taxpayer.
POINTS: 1
DIFFICULTY: Challenging

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 48. Briefly explain the nonattorney-client confidentiality privilege.

ANSWER: Except with respect to written communications regarding tax shelters and tax workpapers used to
prepare financial statements, the attorney-client privilege extends to communication between a
taxpayer and any nonattorneys authorized to practice before the IRS, such as CPAs and enrolled
agents. The privilege may only be asserted in a noncriminal tax matter before IRS or a Federal
court. The confidentiality privilege usually does not apply to the preparation of tax returns or the
giving of accounting or business advice.
POINTS: 1
DIFFICULTY: Challenging

49. Describe the federal court system and its jurisdiction over tax issues. Identify the appeals and trial-level courts.
Then, describe the factors that would go into a taxpayer’s decision to bring his or her case in a particular federal
court. Finally, explain the basic rules of precedence for tax cases in the federal court system.

ANSWER: The U.S. Federal court system has five courts in total: three trial courts and two appellate-level
courts. The trial courts are the U.S. Tax Court, the District Courts around the country, and the U.S.
Court of Federal Claims. The two appellate-levels are the 13 Courts of Appeal and the U.S.
Supreme Court. An appeal from the Tax Court and District Court is to the Court of Appeals where
the taxpayer resides or is located. An appeal from the U.S. Court of Federal Claims is to the Court
of Appeals for the Federal Circuit. Decisions from the U.S. Circuit Courts of Appeal can be
appealed to the Supreme Court, which may not choose to hear the case.

A taxpayer would choose the Tax Court if the taxpayer did not want to pay the deficiency first. The
Tax Court is the only trial court in which the taxpayer does not have to pay first and sue for a
refund. The taxpayer may also want to choose the Tax Court if the issue is highly technical, since
Tax Court judges are tax specialists while District Court judges are generalists. If the taxpayer has
an “emotional” issue, the taxpayer could request a jury trial in the U.S. District Court where the
taxpayer lives or is located. Jury trials can only be brought in the U.S. District Courts.

A taxpayer would want to bring a case in the U.S. Court of Federal Claims if the Court of Appeals
in the taxpayer’s circuit has decided the issue in adversely to the taxpayer but the Federal Circuit
Court of Appeals, which establishes precedent for the U.S. Court of Federal Claims, has established
a rule favorable to the taxpayer.

The Tax Court, under the Golsen rule, must apply the rule established in the taxpayer’s Circuit
Court of Appeal. If that Circuit has not decided the issue, the Tax Court may make its own decision.
Each U.S. Court of Appeals is independent and need not follow the precedents set by other circuits.
All courts must follow a Supreme Court precedent.
POINTS: 1
DIFFICULTY: Challenging

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