Question 1

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Field audit

Accepted Answer

A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided 
A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided G

Question 2

No state may offer an income tax amnesty program more than once.

Accepted Answer

A) True 
 B)False  False

Question 3

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations 
b. Social considerations
c. Equity considerations 
d. Both a. and b.
-Discriminant Index Function (DIF)

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided 
A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided L

Question 4

The amount of a taxpayer's itemized deductions will increase the chance of being audited by the IRS.

Accepted Answer

A) True 
 B)False

Question 5

The annual exclusion, currently $15,000, is available for gift and estate tax purposes.

Accepted Answer

A) True 
 B)False

Question 6

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations 
b. Social considerations
c. Equity considerations 
d. Both a. and b.
-Tax credits available for the purchase of a vehicle that uses alternative (nonfossil) fuels.

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided 
A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided

Question 7

Match the statements that relate to each other.Note: Some choices may be used more than once.
-No return and statute limitations

Accepted Answer

A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided 
A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided

Question 8

If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the part of taxpayers.

Accepted Answer

A) True 
 B)False

Question 9

If a tax deficiency is attributable to fraud, the negligence penalty will not be imposed.

Accepted Answer

A) True 
 B)False

Question 10

The United States (either Federal, state, or local) does not impose:

Accepted Answer

A) Franchise taxes. 
B) Severance taxes. 
C) Occupational fees. 
D) Custom duties. 
E) Export duties. 
A) Franchise taxes. 
B) Severance taxes. 
C) Occupational fees. 
D) Custom duties. 
E) Export duties.

Question 11

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 12

The objective of pay-as-you-go (paygo) is to improve administrative feasibility.

Accepted Answer

A) True 
 B)False

Question 13

Sally's neighbor often brags that his employer often pays him in cash "off the books" to save him taxes.Sally is tired of hearing this and contacts the IRS to report the neighbor.If this tip results in taxes collected by the IRS, Sally will likely receive an award of a portion of the tax and penalties collected.

Accepted Answer

A) True 
 B)False

Question 14

State income taxes generally can be characterized by:

Accepted Answer

A) The same date for filing as the Federal income tax. 
B) No provision for withholding procedures. 
C) Allowance of a deduction for Federal income taxes paid. 
D) Applying only to individuals but not to corporations. 
E) None of these. 
A) The same date for filing as the Federal income tax. 
B) No provision for withholding procedures. 
C) Allowance of a deduction for Federal income taxes paid. 
D) Applying only to individuals but not to corporations. 
E) None of these.

Question 15

A characteristic of FICA is that:

Accepted Answer

A) It does not apply when one spouse works for the other spouse. 
B) It is imposed only on the employer. 
C) It provides a modest source of income in the event of loss of employment. 
D) It is administered by both state and Federal governments. 
E) None of these. 
A) It does not apply when one spouse works for the other spouse. 
B) It is imposed only on the employer. 
C) It provides a modest source of income in the event of loss of employment. 
D) It is administered by both state and Federal governments. 
E) None of these.

Question 16

The AICPA Statements on Standards for Tax Services are:

Accepted Answer

A) Enforceable. 
B) Educational. 
C) Out of date. 
D) Do not exist. 
A) Enforceable. 
B) Educational. 
C) Out of date. 
D) Do not exist.

Question 17

In terms of probability, which of the following taxpayers would be least likely to be audited by the IRS?

Accepted Answer

A) Taxpayer owns and operates a check-cashing service. 
B) Taxpayer is an employed electrician. 
C) Taxpayer just received a $3 million personal injury award as a result of a lawsuit. 
D) Taxpayer just won a $1 million slot machine jackpot at a Las Vegas casino. 
E) Taxpayer has been audited several times before. 
A) Taxpayer owns and operates a check-cashing service. 
B) Taxpayer is an employed electrician. 
C) Taxpayer just received a $3 million personal injury award as a result of a lawsuit. 
D) Taxpayer just won a $1 million slot machine jackpot at a Las Vegas casino. 
E) Taxpayer has been audited several times before.

Question 18

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

Accepted Answer

A) True 
 B)False

Question 19

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

Accepted Answer

A) True 
 B)False

Question 20

Federal excise taxes that are no longer imposed include:

Accepted Answer

A) Tax on air travel. 
B) Tax on wagering. 
C) Tax on the manufacture of sporting equipment. 
D) Tax on alcohol. 
E) None of these. 
A) Tax on air travel. 
B) Tax on wagering. 
C) Tax on the manufacture of sporting equipment. 
D) Tax on alcohol. 
E) None of these.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Field audit

No state may offer an income tax amnesty program more than once.

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -Discriminant Index Function (DIF)

The amount of a taxpayer's itemized deductions will increase the chance of being audited by the IRS.

The annual exclusion, currently $15,000, is available for gift and estate tax purposes.

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -Tax credits available for the purchase of a vehicle that uses alternative (nonfossil) fuels.

Match the statements that relate to each other.Note: Some choices may be used more than once. -No return and statute limitations

If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the part of taxpayers.

If a tax deficiency is attributable to fraud, the negligence penalty will not be imposed.

The United States (either Federal, state, or local) does not impose:

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

The objective of pay-as-you-go (paygo) is to improve administrative feasibility.

State income taxes generally can be characterized by:

A characteristic of FICA is that:

The AICPA Statements on Standards for Tax Services are:

In terms of probability, which of the following taxpayers would be least likely to be audited by the IRS?

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

Federal excise taxes that are no longer imposed include:

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 1: An Introduction to Taxation and Understanding the Federal Tax Law

Match the statements that relate to each other.Note: Some choices may be used more than once. -Field audit

No state may offer an income tax amnesty program more than once.

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -Discriminant Index Function (DIF)

The amount of a taxpayer's itemized deductions will increase the chance of being audited by the IRS.

The annual exclusion, currently $15,000, is available for gift and estate tax purposes.

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -Tax credits available for the purchase of a vehicle that uses alternative (nonfossil) fuels.

Match the statements that relate to each other.Note: Some choices may be used more than once. -No return and statute limitations

If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the part of taxpayers.

If a tax deficiency is attributable to fraud, the negligence penalty will not be imposed.

The United States (either Federal, state, or local) does not impose:

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

The objective of pay-as-you-go (paygo) is to improve administrative feasibility.

State income taxes generally can be characterized by:

A characteristic of FICA is that:

The AICPA Statements on Standards for Tax Services are:

In terms of probability, which of the following taxpayers would be least likely to be audited by the IRS?

Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

Federal excise taxes that are no longer imposed include:

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters