Outline and discuss the tax research process.
What will be an ideal response?
1) The facts must be determined. However, some facts may not have occurred in an open-fact situation. Where facts have not yet occurred, it is useful to review tax research material to determine which facts would produce the most favorable outcome.
2) The issues must be determined. The issues may not always be clear and may be different than the client believes. Thus, only a thorough understanding of the facts permits an adequate formulation of the issues.
3) Determine which authorities are applicable.
4) Evaluate the authorities. Choose the ones to follow when there are conflicting authorities.
5) Communicate the result to the client. The communication with the client should not result in a misunderstanding. While discussions with the client may be suitable, it is recommended by the AICPA's Statements on Standards for Tax Services that the communication be written where issues are important, unusual or complicated. Many firms require that conclusions be communicated in writing.
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International investors believe that when a country gets into financial trouble, the IMF will rescue the country, thus reducing the investors' risk. As a result, investors take greater risks than they would otherwise. This is an example of
A. a risk premium. B. a lender of last resort. C. adverse selection. D. moral hazard.
Which of the following is true of corporations that operate in several different countries??
A. ?A nation may expropriate the assets of multinational corporations without compensation. B. ?Differences in legal systems of host nations make it easy for executives trained in one country to operate effectively in another. C. ?Cash flows in various parts of a multinational corporate system are denominated in one currency. D. ?Multinational corporations have the advantage of uniform attitudes toward risk taking from one country to the next. E. ?Uniformity of tax-laws across different nations result in proper coordination and control of subsidiaries.
During an interview, one may inquire about an applicant's protected class status:
a. directly b. indirectly only c. not at all
Which of the following statements is (are) true regarding exclusions in life insurance contracts?
I. Life insurance policies are remarkably restrictive, including numerous exclusions. II. A life insurer may exclude death attributable to certain activities or hobbies disclosed on the application. A) I only B) II only C) both I and II D) neither I nor II