ACC 331 Chapter 2 Flashcards
Writes the law
Legislative
Interprets the law
Judicial
Applies the law
Administrative
When 2 laws hold the same weight what happens
The newest supersedes the older ones
16th admendment
Provides congress the ability to directly tax income from whatever source derived, without apportionment across the states
Internal revenue code
Codification of federal tax law provisions
Committee reports
Produced by house ways and means, senate finance, and conference committees, explain provisions
Intent of congress
Key to interpreting legislation especially in the absence of administrative guidance
Proposed regulation
Treasury department. Initial regulation issued to obtain comments from public
Proposed regulation authority
Carries little weight in the court
Final regulations
Treasury department. Provide interpretation procedure guidance in applying code
Final regulations authority
Force and effect of law. May be cited as precedent
Temporary regulations
Treasury department. Issued when guidance needed quickly, expires in 3 years
Temp regulations
May be cited as precedent. Same weight as final regulations
Revenue rulings
IRS. Describes application of law to specific facts, often contains examples
Revenue rulings authority
IRS interpretation, weak precedent
Revenue procedures
IRS. Relate to internal IRS procedures and practices
Revenue rulings authority
IRS interpretation. Weak precedent
Letter rulings
IRS. Requested by taxpayer. Describe treatment of a proposed transaction
Letter ruling authority
Applicable to a specific taxpayer. No precedent
Tax courts
Nationwide, tax cases only, no need to pay before, US court of appeals
District court
Location of taxpayer, criminal and civil issues, need to pay before and sue for money back, US court of appeals
Court of federal claims
Nationwide, claims against the US, need to pay before and sue for money back, court of appeals for the federal circuit
Responsibilities of the appellate courts
Determine whether trial court applied the proper law in its decision not a consideration of trial courts factual findings
Corps and partnerships tax filing
Files annually regardless of income
Individual tax filing
Depends on filing status, age, gross income
Estates and trusts tax filing
Require to file annually if gross income is greater than 600
Tax return filings April 15th
C corps, individuals, and estates and trusts
March 15th file date
S corps and partnerships
Estates and trusts extentions
5.5 months
Statute of limintations
Period during which the taxpayer can file an amended return or the IRS can audit. Generally 3 years
Exceptions to statute of limitations
6 years if omit more than 25% of gross income. Indefinite if not filed or fraudulent
Discriminating function system
Selects the returns with the highest prob of containing errors
Document perfection program
Checks for math errors and tax calc
Info matching
IRS matches info on returns with info received from employers and banks
Special audit programs
Focus on specific industry
Lifestyle audit
Living a lifestyle that does not match your taxable income
Correspondence exam
Most common, least complex, through the mail, one or two items on return
Office exam
More complex, small businesses, sole proprietorships, and middle to high income taxpayers, at local IRS
Field exam
Most complex, business returns and most complex individual, IRS comes to the business or where the books are, can take years
Audit process
IRS conducts exam and provides deficiencies. If disputed then request appeals with IRS, most settled here can get taken to court
