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

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

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

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 brackets are increased for inflation.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Early filing and statute of limitations (deficiency situations)

Jane is the tax director for Tangent Software Corporation.She is unsure whether Tangent is required to charge sales tax when software is provided to customers in State X via the "cloud." This indicates that the sales tax does not meet the principle of:

Which, if any, is not one of Adam Smith's canons (principles) of taxation?

Property can be transferred within the family group by gift or at death.One motivation for preferring the gift approach is:

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Under Clint's will, all of his property passes to either the Lutheran Church or to his wife.No Federal estate tax will be due on Clint's death in 2019.

Some states use their state income tax return as a means of collecting unpaid sales and use taxes.

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. -Excise tax on tobacco

A characteristic of the fraud penalties is:

Regarding proper ethical accounting guidelines, which, if any, of the following is correct?

In preparing an income tax return, the use of a client's estimates is not permitted.

Indicate which, if any, statement is incorrect.State income taxes:

The value added tax (VAT) has not had wide acceptance in the international community.

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. -Revenue neutrality

The quote engraved on the IRS building in Washington, DC, at the entrance states:

The civil fraud penalty can entail large fines and possible incarceration.

The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.