A question of law pertains to the interpretation and application of legal principles, statutes, or regulations. In the context of taxation, this specifically involves how the tax code is understood and applied to various circumstances. When a matter involves determining what the law prohibits or allows, it is classified as a question of law.
In this scenario, the correct choice highlights that it is necessary to interpret the tax code to address specific tax situations or disputes. This involves analyzing statutory language, regulatory guidelines, and prior case law to arrive at a legal conclusion about tax obligations or entitlements.
Other choices refer to aspects that require factual determinations or discussions about specific circumstances. For instance, determining the amount of income a taxpayer should report relies on assessing factual financial data instead of legal principles. Similarly, evaluating a taxpayer's financial history or residency status involves fact-based analysis rather than interpreting legal text. These scenarios require application of the law to facts rather than the interpretation of the law itself.