Which One of the Following Statements About Letter Rulings Is

question 60

Multiple Choice

Which one of the following statements about letter rulings is false?

• A) The IRS issues revenue procedures periodically, which prescribe the information that must be supplied with a ruling request.
• B) If a taxpayer requests and pays for a ruling, the IRS must respond to his request by issuing a ruling.
• C) A ruling is a response to a taxpayer's specific set of facts.
• D) Rulings become public information.

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Definitions:

Effective Income Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing the total tax expense by the taxable income.

Cash Dividends

Payments made by a corporation to its shareholders as a distribution of profits, typically in the form of cash.

Consolidated Income Tax Return

A single income tax return filed by an affiliated group of corporations, combining their tax liabilities.

Operating Income

Represents the profit a company makes after deducting operating expenses such as wages and cost of goods sold (COGS), but before interest and taxes.