ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM | FREE SOLVED ANSWERS
Which of the following is an administrative source of tax law?
Which of the following is an administrative source of tax law?
Multiple Choice
- a. Revenue Ruling.
- b. IRS Regulation
- c. Private Letter Ruling.
- d. All of these
Correct Answer: D- All of these.
Administrative sources of tax law are pronouncements issued by the Treasury Department and the Internal Revenue Service (IRS) to interpret and apply the Internal Revenue Code. These include:
Private Letter Rulings (PLRs): Written statements issued by the IRS to a specific taxpayer in response to a request for guidance on the tax consequences of a proposed transaction. While binding on the IRS with respect to that specific taxpayer and transaction, they cannot be relied upon by other taxpayers.
Revenue Rulings: Official pronouncements by the IRS that provide guidance on how the tax law applies to specific factual situations. They are binding on the IRS and can be relied upon by taxpayers.
IRS Regulations: Interpretations of the Internal Revenue Code issued by the Treasury Department. They provide detailed guidance on how the tax law should be applied and have the force of law unless found to be inconsistent with the Code by a court.
ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM FREE SOLVED ANSWERS