Advanced Taxation - Exam II: Chapters 6, 10-13 flash cards

Commercial Tax Service

(Ch. 6) A service that provides editorial explanations and expert analysis of primary tax law.

Thomson Reuters Checkpoint

(Ch. 6) A commercial tax and accounting research service offered by Thomson Reuters, which offers integrated source materials and analysis for tax, accounting, auditing, and corporate finance.

Annotated Tax Service

(Ch. 6) A commercial tax research reference collection that is a secondary source of federal tax law. This includes the Internal Revenue Code, regulations, ruling analyses, judicial case notes, and other indexes and finding lists, organized by course section number.

Annotation

(Ch. 6) An entry in an annotated tax service indicating a summary of a primary tax source of the federal tax law that is pertinent to one’s research.

Topical Tax Service

(Ch. 6) A professional tax research reference collection that is a secondary source of federal tax law. This includes the code, regulation, and ruling analyses; judicial case notes; and other indexes and finding lists organized by general topics.

Federal Tax Coordinator

(Ch. 6) A tax editorial service often considered the most comprehensive. This is Checkpoint’s flagship editorial content, in which tax experts are being constantly drawn upon to evaluate and explain tax law in an understandable but comprehensive fashion.

United States Tax Reporter

(Ch. 6) An annotated tax service organized by IRC section number. This database has RIA-provided explanations and annotations, which are court cases that have tax law related to the selected code section.

Federal Tax Handbook

(Ch. 6) An annotated tax service considered a quick way to find general information about a topic of interest. The service is organized by topic, but the Federal Tax Handbook provides less detailed explanations of tax law.

Keyword Search

(Ch. 6) A search method in Checkpoint, CCH AnswerConnect, and other tax research databases in which key words are used to search primary and editorial source materials.

Boolean Connector

(Ch. 6) A deductive logic search that allows for the intersection of terms by using connectors such as “or” and “and” as well as searching for a word or phrase within a certain proximity of other words.

Proximity Connector

(Ch. 6) A form of deductive logic used in keyword searches to find terms within a certain proximity (number of words, sentence, paragraph) of another term.

Contents Search

(Ch. 6) A search that treats electronic tax services as if they were printed published services. Accordingly, researchers can drill down through the table of contents of a service just as they would thumb through the pages if they had books in front of them.

Citation Search

(Ch. 6) A method of finding documents in Checkpoint by citation - the code section, regulation, ruling, paragraph, case number, and so forth.

Precedential Value

(Ch. 6) The legal authority that is established by the decision on a case. This is heavily considered in common law.

Citator

(Ch. 6) A tool through which a tax researcher can learn the history of a legal source and evaluate the strength of its holdings.

Citing Case

(Ch. 6) A case that is making reference to another case.

Cited Case

(Ch. 6) A case that is being referenced in a citation.

RIA Citator

(Ch. 6) The online citator included in the Checkpoint tax research service. It is used to determine the history and reliability of court cases and IRS administrative rulings.

Cited Favorably

(Ch. 6) The RIA Citator’s indication that the court responsibly cited and used holdings to support the current case.

Cited without Comment

(Ch. 6) The RIA Citator’s indication that the a case was generally cited, but it may not have been an important determining factor in the subsequent case.

Checkpoint Catalyst

(Ch. 6) A research tool intended to make tax research more intuitive.

Tax Treatise

(Ch. 6) An editorial analysis that provides in-depth coverage of a particular tax area.

Tax Periodical

(Ch. 6) A collection of articles or new briefs that are designed to keep readers up to date in specific or general areas of the tax law.

Research Memo

(Ch. 10) A primary means by which to communicate the results of a research project to the tax researcher, his or her supervisor, and/or the researcher’s successor.

Client Letter

(Ch. 10) A primary means by which to communicate one’s research result to the client.

Proportional Tax Rate

(Ch. 11) The term for a tax rate schedule in which the marginal rates remain constant as the magnitude of the tax base increases.

Progressive Tax Rate

(Ch. 11) The term for a tax rate schedule in which the marginal rates increase as the magnitude of the tax base increases.

Regressive Tax Rate

(Ch. 11) The term for a tax rate schedule in which the marginal rates decrease as the magnitude of the tax base increases.

Marginal Tax Rate

(Ch. 11) The proportion of the next dollar of gross income (or other increase in the tax base) that the taxpayer must pay to the government as a tax.

Average Tax Rate

(Ch. 11) The percentage of a taxpayer’s income that is paid in taxes (i.e., computed by dividing the current-year tax liability by the taxpayer’s income).

Nominal Average Tax Rate

(Ch. 11) An average tax rate determined by the inspection of the applicable rate schedule.

Effective Average Tax Rate

(Ch. 11) An average tax rate determined by the proportion of a taxpayer’s economic income that was paid to the government as a tax liability.

Department of the Treasury

(Ch. 12) A United States department responsible for administering and enforcing the internal revenue laws of the United States.

Commissioner of Internal Revenue

(Ch. 12) The chief executive officer of the Internal Revenue Service (IRS) and is appointed by the president of the United States.

Internal Revenue Service

(Ch. 12) A United States agency with the mission of providing America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

Wage and Investment Division

(Ch. 12) A division of the IRS that predominantly serves Form 1040 filers with only wage and investment income.

Discriminant Function Formula

(Ch. 12) A means by which, on the basis of probable return to the IRS in terms of collected delinquent tax liabilities, the IRS selects tax returns for examination.

National Research Program

(Ch. 12) A means by which the IRS develops its discriminant function formulae. In this program, a taxpayer’s return is selected randomly for an extensive review, during which the government challenges every item of income, credit, deduction, and exclusion.

Correspondence Examination

(Ch. 12) An audit of one’s tax return that is conducted largely by telephone or mail. This audit usually involves a request for substantiation or explanation of one or more items on a tax return, including filing status, exemptions, and itemized deductions for medical expenses, interest, taxes paid, charitable contributions, or miscellaneous deductions.

Office Examination

(Ch. 12) An audit of one’s tax return that is conducted at a local IRS office. These audits are typically more involved than correspondence audits and often deal with multiple issues that quill require some analysis and exercise of judgment by the auditor.

Field Examination

(Ch. 12) An audit of the taxpayer’s tax return that is conducted on the taxpayer’s premises. These audits are usually more involved and comprehensive than correspondence or office audits.

Revenue Agent’s Report

(Ch. 12) A report prepared upon the completion of the examination to the taxpayer the sources of any adjustments to the reported tax liability. If the taxpayer agrees to this recomputation, the associated tax, penalty, and interest become due. Lacking such agreement, other aspects of the appeals process are undertaken.

30-Day Letter

(Ch. 12) A notice from the Internal Revenue Service (IRS) formally notifying the taxpayer of the results of an examination of the return and requesting that the taxpayer agree to the proposed modifications of the tax liability.

90-Day Letter

(Ch. 12) A statutory notice from the IRS that the taxpayer has failed to pay an assessed tax. An issuance of such a letter usually indicates that the taxpayer has exhausted all of his or her appeal rights within the IRS and that the next forum for review will be a trial-level court. The taxpayer has 90 days to petition the Tax Court to be relieved of the deficiency assessment. If no such petition is filed, the IRS is empowered to collect the assessed tax.

Appeals Office

(Ch. 12) The internal group of the IRS that has the greatest authority to come to a compromise solution with a taxpayer concerning a disputed tax liability.

Statute of Limitations

(Ch. 12) The maximum amount of time within which one or both parties in the taxing process must perform an act, such as file a return, pay a tax, or examine a return.

Assessment

(Ch. 12) The process in which the IRS fixes the amount of a taxpayer’s tax liability. The IRS has the ultimate authority to assess the liability of every taxpayer.

Collection

(Ch. 12) The process by which the IRS extracts an assessed tax liability from a taxpayer.

Closing Agreement

(Ch. 12) A formal, written agreement that is made between a taxpayer and the IRS. It is the only agreement the IRC recognizes as binding.

Offer in Compromise

(Ch. 12) The means by which the government offers to reduce the amount of an assessed tax, usually because of some doubt as to the collectability of the tax.

Qualified Offer

(Ch. 12) An IRC amendment that allows taxpayers to make offers to the IRS to settle the amount of the taxpayer’s liability.

Client Confidentiality Privilege

(Ch. 12) An IRC amendment that provides authorized practitioners such as CPAs and enrolled agents a limited privilege.

Civil Penalty

(Ch. 13) A fine or other judgment that is brought against a taxpayer or preparer for a failure to comply with one or more of the elements of the federal tax law.

Ad Valorem Penalty

(Ch. 13) An addition to taxes based on a percentage of the delinquent tax.

Assessable Penalty

(Ch. 13) A penalty expressed as a a flat dollar amount rather than a percentage of the delinquent tax.

Reasonable Cause

(Ch. 13) A means by which a taxpayer or preparer can be excused from an applicable penalty or other sanction.

Negligence

(Ch. 13) A failure to exercise one’s duty with respect to the Internal revenue Code or to use a reasonable degree of expected or professional care.

Fraud

(Ch. 13) A taxpayer’s action to evade the assessment of a tax.

Failure-to-File Penalty

(Ch. 13) A penalty imposed on taxpayers who fail to file a required tax return.

Willful Neglect

(Ch. 13) A conscious, intentional failure or reckless indifference.

Failure-to-Pay Penalty

(Ch. 13) A penalty imposed on taxpayers who fail to pay a tax that is shown on their return.

Accuracy-Related Penalty

(Ch. 13) A civil tax penalty assessed in situations in which the taxpayer has been negligent in completing the return or is found to have acted with a disregard of IRS rules and regulations or in which a substantial understatement of the income tax, a substantial valuation or pension-liability overstatement, or a substantial transfer-tax-valuation understatement exists.

Substantial Authority

(Ch. 13) The concept that a taxpayer penalty may be incurred if a tax return position is taken and not disclosed to the IRS and no authority supports the position.

Criminal Penalty

(Ch. 13) The punishment for a severe infraction of the elements of the federal tax law by a taxpayer or tax preparer. Felony or misdemeanor status for tax crimes can be accompanied by substantial fines or jail terms.

Preparer Penalty

(Ch. 13) A series of fines and other levies by which the IRS encourages taxpayers and preparers to fulfill their responsibilities under the Internal Revenue Code.

Injunction

(Ch. 13) The action by which the IRS or a court prevents a taxpayer, preparer, or tax shelter distributor from undertaking a specified action.