CCH Federal Taxation Chapters 1-3 (2026) Exam Questions & Answers |
Latest Already Graded A+ UPDATE 2025|2026!! STUDY GUIDE EXAM
Define tax research. Briefly describe the tax research process - (ANSWER)Tax research is the resolution of
unanswered taxation process
Process: identification of pertinent issues, specification of proper authorities, evaluation of the propriety
of authorities, application of authorities to a specific situation
Who issues Circular 230? According to Circular 230, what constitutes practice before the IRS? Which tax
practitioners are regulated by it - (ANSWER)Issued by the Treasury Department and applies to all who
practice before the IRS
Present to the IRS or any of it's officers or employees. Presentation includes "preparing documents, filing
documents, corresponding and communicating with the IRS, representing a client"
A practitioner could be suspended from practice before the IRS if the practitioner employs, accepts
assistance from, or shares fees with any person who is under disbarment or suspension from practice
before the IRS. True or false? Explain your answer. - (ANSWER)True, a practitioner may be suspended or
disbarred from practice before the IRS if he/she knowingly helps a suspended or disbarred person
practice indirectly before the IRS.
What are the SSTS? Who issues them? Discuss their principal objectives. - (ANSWER)Statements on
Standards for Tax Services (SSTS) are enforceable tax practice standards for members of the AICPA. They
are the standards that are the foundation for validating reputational integrity in the tax profession. The
Tax Executive Committee issues the SSTS.
When should an AICPA member follow the guidance under SSTS No. 1, Paragraph 1.1.5
rather than the standards of an applicable taxing authority with respect to advising on tax positions? -
(ANSWER)A member should comply with the standards that are imposed when recommending a
position or signing a return. If there are no written standards for this, than SSTS No. 1 should be
followed.
What guidelines are provided by SSTS No. 2 as to the reliance by a member on information supplied by
the taxpayer for use in preparing the taxpayer's return? - (ANSWER)When preparing a return, the
, CCH Federal Taxation Chapters 1-3 (2026) Exam Questions & Answers |
Latest Already Graded A+ UPDATE 2025|2026!! STUDY GUIDE EXAM
member ordinarily relies on the information the taxpayer provides. Even though examination of the
documents isn't required, the member should still ask the taxpayer for supporting documents.
A member may use estimates in completing a tax return according to Section 2.4 of SSTS No. 2. When
might the use of estimates be considered appropriate? - (ANSWER)Estimates are appropriate when
keeping the records of numerous items in small amounts is difficult to achieve and where data is not
available at the time of the filing the return.
What are the six basic steps in conducting tax research? Briefly discuss each step in the tax research
process. - (ANSWER)1) Establish the facts: gather facts or tax and nontax considerations
2) Identify the issues: issues of fact and of law
3) Locate the Appropriate Authority: locate authority relevant to client situation
4) Evaluate the Authority: current status of the authority and the precedential value of the authority
5) Develop Conclusion and Recommendations
6) Communicate the Recommendations: communicate client facts, assumptions, issues, sources of
authority, conclusions and recommendations
The tax researcher must find the facts as the first step in tax research. Give examples of the kind of
information that a tax practitioner might want to obtain. - (ANSWER)The client's tax entity, family status
and stability, marginal tax rates, legal domicile and citizenship, motivation for the transactions, other
parties involved in the transaction, whether transaction is proposed or completed
Indicate whether the item generally would be a tax (T) or a nontax (NT) consideration in solving a tax
research or tax planning problem.
a. The taxpayer would like to set up a private foundation to reduce her annual income tax liability.
b. The taxpayer has limited cash flow because of prior investments; therefore, he has limited ability to
make "tax-advantaged" investments.
Latest Already Graded A+ UPDATE 2025|2026!! STUDY GUIDE EXAM
Define tax research. Briefly describe the tax research process - (ANSWER)Tax research is the resolution of
unanswered taxation process
Process: identification of pertinent issues, specification of proper authorities, evaluation of the propriety
of authorities, application of authorities to a specific situation
Who issues Circular 230? According to Circular 230, what constitutes practice before the IRS? Which tax
practitioners are regulated by it - (ANSWER)Issued by the Treasury Department and applies to all who
practice before the IRS
Present to the IRS or any of it's officers or employees. Presentation includes "preparing documents, filing
documents, corresponding and communicating with the IRS, representing a client"
A practitioner could be suspended from practice before the IRS if the practitioner employs, accepts
assistance from, or shares fees with any person who is under disbarment or suspension from practice
before the IRS. True or false? Explain your answer. - (ANSWER)True, a practitioner may be suspended or
disbarred from practice before the IRS if he/she knowingly helps a suspended or disbarred person
practice indirectly before the IRS.
What are the SSTS? Who issues them? Discuss their principal objectives. - (ANSWER)Statements on
Standards for Tax Services (SSTS) are enforceable tax practice standards for members of the AICPA. They
are the standards that are the foundation for validating reputational integrity in the tax profession. The
Tax Executive Committee issues the SSTS.
When should an AICPA member follow the guidance under SSTS No. 1, Paragraph 1.1.5
rather than the standards of an applicable taxing authority with respect to advising on tax positions? -
(ANSWER)A member should comply with the standards that are imposed when recommending a
position or signing a return. If there are no written standards for this, than SSTS No. 1 should be
followed.
What guidelines are provided by SSTS No. 2 as to the reliance by a member on information supplied by
the taxpayer for use in preparing the taxpayer's return? - (ANSWER)When preparing a return, the
, CCH Federal Taxation Chapters 1-3 (2026) Exam Questions & Answers |
Latest Already Graded A+ UPDATE 2025|2026!! STUDY GUIDE EXAM
member ordinarily relies on the information the taxpayer provides. Even though examination of the
documents isn't required, the member should still ask the taxpayer for supporting documents.
A member may use estimates in completing a tax return according to Section 2.4 of SSTS No. 2. When
might the use of estimates be considered appropriate? - (ANSWER)Estimates are appropriate when
keeping the records of numerous items in small amounts is difficult to achieve and where data is not
available at the time of the filing the return.
What are the six basic steps in conducting tax research? Briefly discuss each step in the tax research
process. - (ANSWER)1) Establish the facts: gather facts or tax and nontax considerations
2) Identify the issues: issues of fact and of law
3) Locate the Appropriate Authority: locate authority relevant to client situation
4) Evaluate the Authority: current status of the authority and the precedential value of the authority
5) Develop Conclusion and Recommendations
6) Communicate the Recommendations: communicate client facts, assumptions, issues, sources of
authority, conclusions and recommendations
The tax researcher must find the facts as the first step in tax research. Give examples of the kind of
information that a tax practitioner might want to obtain. - (ANSWER)The client's tax entity, family status
and stability, marginal tax rates, legal domicile and citizenship, motivation for the transactions, other
parties involved in the transaction, whether transaction is proposed or completed
Indicate whether the item generally would be a tax (T) or a nontax (NT) consideration in solving a tax
research or tax planning problem.
a. The taxpayer would like to set up a private foundation to reduce her annual income tax liability.
b. The taxpayer has limited cash flow because of prior investments; therefore, he has limited ability to
make "tax-advantaged" investments.
