Question 1

If a taxpayer's total tax liability is $4,000, taxable income is $20,000, and total economic income is $40,000, then the effective tax rate is 20 percent.

Accepted Answer

A) True 
 B)False

Question 2

A tax bill introduced in the House of Representatives is then

Accepted Answer

A)  referred to the House Ways and Means Committee for hearings and approval. 
B)  referred to the full House for hearings. 
C)  forwarded to the Senate Finance Committee for consideration. 
D)  voted upon by the full House. 
A)  referred to the House Ways and Means Committee for hearings and approval. 
B)  referred to the full House for hearings. 
C)  forwarded to the Senate Finance Committee for consideration. 
D)  voted upon by the full House.

Question 3

Paul makes the following property transfers in the current year:   The total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified transfer tax is

Accepted Answer

A)  $206,000. 
B)  $214,000. 
C)  $234,000. 
D)  $279,000. 
A)  $206,000. 
B)  $214,000. 
C)  $234,000. 
D)  $279,000.

Question 4

The IRS must pay interest on

Accepted Answer

A)  all tax refunds. 
B)  tax refunds paid later than 30 days after the due date. 
C)  tax refunds paid later than 45 days after the due date. 
D)  The IRS never pays interest on tax refunds. 
A)  all tax refunds. 
B)  tax refunds paid later than 30 days after the due date. 
C)  tax refunds paid later than 45 days after the due date. 
D)  The IRS never pays interest on tax refunds.

Question 5

When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called

Accepted Answer

A)  Taxpayer Compliance Measurement Program. 
B)  Discriminant Function System. 
C)  Standard Audit Program. 
D)  Field Audit Program. 
A)  Taxpayer Compliance Measurement Program. 
B)  Discriminant Function System. 
C)  Standard Audit Program. 
D)  Field Audit Program.

Question 6

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

Accepted Answer

A) True 
 B)False

Question 7

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 8

When new tax legislation is being considered by Congress,

Accepted Answer

A)  the tax bill will usually originate in the Senate. 
B)  different versions of the House and Senate bills are reconciled by the Speaker of the House and the President of the Senate. 
C)  different versions of the House and Senate bills are reconciled by a Joint Conference Committee. 
D)  after the President of the U.S. approves a tax bill, the Joint Conference Committee must then vote on passage of the bill. 
A)  the tax bill will usually originate in the Senate. 
B)  different versions of the House and Senate bills are reconciled by the Speaker of the House and the President of the Senate. 
C)  different versions of the House and Senate bills are reconciled by a Joint Conference Committee. 
D)  after the President of the U.S. approves a tax bill, the Joint Conference Committee must then vote on passage of the bill.

Question 9

The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations) and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.

Accepted Answer

A) True 
 B)False

Question 10

The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction.

Accepted Answer

A) True 
 B)False

Question 11

Chris, a single taxpayer, had the following income and deductions during 2015:   Calculate Chris's tax liability due or refund for 2015.

Accepted Answer

@#IMG-DLM& Tax $5,156.25 + .25(39,800 -

Question 12

Which of the following is not a social objective of the tax law?

Accepted Answer

A)  prohibition of a deduction for illegal bribes, fines and penalties 
B)  a deduction for charitable contributions 
C)  an exclusion for interest earned by large businesses 
D)  creation of tax-favored pension plans 
A)  prohibition of a deduction for illegal bribes, fines and penalties 
B)  a deduction for charitable contributions 
C)  an exclusion for interest earned by large businesses 
D)  creation of tax-favored pension plans

Question 13

The term "tax law" includes

Accepted Answer

A)  Internal Revenue Code. 
B)  Treasury Regulations. 
C)  judicial decisions. 
D)  all of the above. 
A)  Internal Revenue Code. 
B)  Treasury Regulations. 
C)  judicial decisions. 
D)  all of the above.

Question 14

Organizing a corporation as an S Corporation results in a single level of taxation.

Accepted Answer

A) True 
 B)False

Question 15

Peyton has adjusted gross income of $2,000,000 on his 2015 tax return, filed April 15, 2016. He accidentally failed to include $200,000 that he received for a television advertisement. How long does the IRS have to audit Peyton's federal tax return?

Accepted Answer

A)  until April 15, 2018 
B)  until April 15, 2019 
C)  until April 15, 2022 
D)  The IRS can audit Peyton's return at any future date. 
A)  until April 15, 2018 
B)  until April 15, 2019 
C)  until April 15, 2022 
D)  The IRS can audit Peyton's return at any future date.

Question 16

The largest source of revenues for the federal government comes from

Accepted Answer

A)  individual income taxes. 
B)  corporate income taxes. 
C)  Social Security and Medicare taxes (FIC
A) . 
D)  estate and gift taxes. 
A)  individual income taxes. 
B)  corporate income taxes. 
C)  Social Security and Medicare taxes (FIC
A) . 
D)  estate and gift taxes.

Question 17

Limited liability company members (owners) are responsible for the liabilities of their limited liability company.

Accepted Answer

A) True 
 B)False

Question 18

During the current tax year, Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000. What is the amount of Frank Corporation's corporate income tax for the year?

Accepted Answer

Taxable income is $1,900,000 -

Question 19

Which of the following taxes is regressive?

Accepted Answer

A)  Federal Insurance Contributions Act (FIC
A)  
B)  excise tax 
C)  property tax 
D)  gift tax 
A)  Federal Insurance Contributions Act (FIC
A)  
B)  excise tax 
C)  property tax 
D)  gift tax

Question 20

In a limited liability partnership, a partner is not liable for his partner's acts of negligence or misconduct.

Accepted Answer

A) True 
 B)False

If a taxpayer's total tax liability is $4,000, taxable income is $20,000, and total economic income is $40,000, then the effective tax rate is 20 percent.

A tax bill introduced in the House of Representatives is then

Paul makes the following property transfers in the current year: The total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified transfer tax is

The IRS must pay interest on

When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

When new tax legislation is being considered by Congress,

The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations) and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.

The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction.

Chris, a single taxpayer, had the following income and deductions during 2015: Calculate Chris's tax liability due or refund for 2015.

Which of the following is not a social objective of the tax law?

The term "tax law" includes

Organizing a corporation as an S Corporation results in a single level of taxation.

Peyton has adjusted gross income of $2,000,000 on his 2015 tax return, filed April 15, 2016. He accidentally failed to include $200,000 that he received for a television advertisement. How long does the IRS have to audit Peyton's federal tax return?

The largest source of revenues for the federal government comes from

Limited liability company members (owners) are responsible for the liabilities of their limited liability company.

During the current tax year, Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000. What is the amount of Frank Corporation's corporate income tax for the year?

Which of the following taxes is regressive?

In a limited liability partnership, a partner is not liable for his partner's acts of negligence or misconduct.

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, Cost Recovery, Amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, Tax Credits, and Payment of Tax

Filters

Exam 1: An Introduction to Taxation

If a taxpayer's total tax liability is $4,000, taxable income is $20,000, and total economic income is $40,000, then the effective tax rate is 20 percent.

A tax bill introduced in the House of Representatives is then

Paul makes the following property transfers in the current year: The total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified transfer tax is

The IRS must pay interest on

When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

When new tax legislation is being considered by Congress,

The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations) and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.

The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction.

Chris, a single taxpayer, had the following income and deductions during 2015: Calculate Chris's tax liability due or refund for 2015.

Which of the following is not a social objective of the tax law?

The term "tax law" includes

Organizing a corporation as an S Corporation results in a single level of taxation.

Peyton has adjusted gross income of $2,000,000 on his 2015 tax return, filed April 15, 2016. He accidentally failed to include $200,000 that he received for a television advertisement. How long does the IRS have to audit Peyton's federal tax return?

The largest source of revenues for the federal government comes from

Limited liability company members (owners) are responsible for the liabilities of their limited liability company.

During the current tax year, Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000. What is the amount of Frank Corporation's corporate income tax for the year?

Which of the following taxes is regressive?

In a limited liability partnership, a partner is not liable for his partner's acts of negligence or misconduct.

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, Cost Recovery, Amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, Tax Credits, and Payment of Tax

Filters