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MCLE Test and Answer Sheet
Test No. 104: Rickety Shelters (April 2002 LA Lawyer)

Instructions for Obtaining MCLE Credits
The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour.

1.Study the CLE article in this issue.


2.Answer the test questions by marking the appropriate boxes. Each question has only one answer. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced.

3.Mail the answer sheet and the $15 testing fee ($20 for non-LACBA members) to:
Los Angeles Lawyer
MCLE Test
P.O. Box 55020
Los Angeles, CA 90055 
Make checks payable to Los Angeles Lawyer.

4.You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5.Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-assessment activity.

6.For future reference, please retain the CLE test materials returned to you.
Test Sheet 
Mark your answers to the test by clicking next to your choice. All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*

1. The new IRS disclosure initiative applies only to controversial items that could be considered tax shelters.
True.
False.

2. Taxpayers wishing to take advantage of the new IRS disclosure initiative have until April 23, 2002, to make the required disclosure.
True.
False.

3. A taxpayer already under examination by the IRS cannot take advantage of the new IRS disclosure initiative.
True.
False.

4. Taxpayers wishing to take advantage of the IRS disclosure initiative may be required to waive the attorney-client privilege for certain tax opinions and related material.
True.
False.

5. The “business purpose” and “economic substance” doctrines are judicial doctrines created by the courts and are not expressly found in the Internal Revenue Code.
True.
False.

6. The economic substance and business purpose doctrines are difficult to apply and subjective in their application.
True.
False.

7. Recent judicial decisions have reversed a trend of IRS victories in tax shelter litigation.
True.
False.

8. The IRS disclosure initiative has been described as a “once in a lifetime opportunity” and is not likely to be repeated.
True.
False.

9. The judicial formulations of the economic substance and business purpose doctrines differ among the courts.
True.
False.

10. The U.S. Supreme Court has never addressed the economic substance doctrine.
True.
False.

11. Conflicts in the circuit courts of appeals regarding the application of the economic substance and business purpose doctrines may lead to Supreme Court review.
True.
False.

12. The continued dispute over controversial tax-sheltered investments may lead to legislative changes by Congress.
True.
False.

13. For taxpayers complying with the IRS disclosure initiative, the IRS will agree to waive all penalties under the Internal Revenue Code.
True.
False.

14. One of the rationales of the disclosure initiative is to provide an incentive to taxpayers to bring any questionable transaction to the IRS’s attention.
True.
False.

15. The IRS disclosure initiative does not cover a taxpayer’s fraudulent concealment of the amount or source of any item of gross income.
True.
False.

16. The IRS disclosure initiative could apply to any item on the taxpayer’s return unless it is expressly excluded by the disclosure initiative.
True.
False.

17. The disclosure required by the disclosure initiative must be in writing and must be signed by the taxpayer under penalties of perjury.
True.
False.

18. The disclosure initiative generally will not require the disclosure of confidential attorney-client communications that occurred after the tax return was filed.
True.
False.

19. The accuracy-related penalty subject to waiver under the IRS disclosure initiative can range from 20 percent to 40 percent of the tax deficiency (plus applicable interest on the penalty).
True.
False.

20. An important consideration in determining whether a transaction has economic substance is whether the transaction occurred in a public market not controlled by the taxpayer.
True.
False.

Address and Billing 
After submitting your answers you will be asked to enter your name, address, and payment information on the next screen. Once you have submitted the current form, you will be switched to a secure mode which will allow you to safely transmit your credit card number over the Internet.

If you do not wish to complete this transaction over the Internet you should print this page and send it to the address listed in Step 3 of the instructions at the top of this page.

  
Before hitting the "Submit" button please verify that all questions have been answered.

*The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by The State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by The State Bar of California in the amount of one hour.

   
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