Federa Tax Law Questionnaire

1. What does “practice before the IRS” mean, and does it include tax return preparation, without more? Can the IRS regulate individuals who only prepare tax return? List three (3) types of individuals who may “practice” before the IRS. (10 points)

2. What are IRS “regulations?” Briefly describe the process employed by the IRS to issue regulations. Do regulations have the force of law? Can taxpayers challenge/question IRS regulations? (10 points)

3. Briefly list and discuss five (5) different types of IRS taxpayer guidance issued by the IRS – (Please do not include “Regulations” as part of this answer). (10 points)

4. What is an EFIN number and how is it used? What is a PTIN number and how is it used? Briefly describe the controversy of the IRS announcement of a “new” PTIN fee. (10 points)

5. What are “dependency” exemptions? Please describe two (2) different tests to determine whether someone can be treated as a dependent for tax purposes. (10 points)

6. How are losses between related-parties treated for tax purposes? Why is this so? Is there a method for one related party to deduct the loss and the other receive the economic benefit? (10 points)

7. Briefly describe what are (a) “above-the-line” deductions and (b) “below-the-line” deductions. All things being equal, which is generally more valuable to taxpayers – and why? (10 points)

8. What is the “constructive receipt” doctrine and what purpose does it serve? For accrual-basis taxpayers, what are the “all-events” and “economic-performance” tests? (10 points)

9. What was the issue in Blum v. Commissioner – and how did the Tax Court decide the case? How could the outcome have changed if the payment to the taxpayer had been made differently? (10 points)

10. Briefly describe the difference between section 162 expenses and section 212 expenses. How can “regular” section 162 expenses be disallowed, in certain cases, by the IRS (hint, section 280E) (10 points).