Question 1

Currently, the Federal corporate income tax is less progressive than the individual income tax.

Accepted Answer

A) True 
 B)False

Question 2

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Fraud and statute of 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 3

Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.

Accepted Answer

A) True 
 B)False

Question 4

For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements about a value added tax (VAT) is false?

Accepted Answer

A) Many countries use a VAT. 
B) The United States has imposed a VAT since 1913. 
C) A VAT has been proposed in the United States to replace part of the income tax. 
D) A VAT operates similarly to a sales tax. 
A) Many countries use a VAT. 
B) The United States has imposed a VAT since 1913. 
C) A VAT has been proposed in the United States to replace part of the income tax. 
D) A VAT operates similarly to a sales tax.

Question 6

An excise tax is often used to try to influence behavior.

Accepted Answer

A) True 
 B)False

Question 7

One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from being accumulated within a family unit.

Accepted Answer

A) True 
 B)False

Question 8

When interest is charged on a deficiency, any part of a month counts as a full month.

Accepted Answer

A) True 
 B)False

Question 9

A parent employs his twin daughters, age 17, in his sole proprietorship.The daughters are not subject to FICA
coverage.

Accepted Answer

A) True 
 B)False

Question 10

The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.

Accepted Answer

A) True 
 B)False

Question 11

States impose either a state income tax or a general sales tax, but not both types of taxes.

Accepted Answer

A) True 
 B)False

Question 12

The majority of IRS audits are handled by correspondence.

Accepted Answer

A) True 
 B)False

Question 13

Which, if any, of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

Accepted Answer

A) Nonrecognition of gain allowed for involuntary conversions. 
B) Net operating loss carryover provisions. 
C) Carryover of excess charitable contributions. 
D) Use of the installment method to recognize gain. 
E) Carryover of excess capital losses. 
A) Nonrecognition of gain allowed for involuntary conversions. 
B) Net operating loss carryover provisions. 
C) Carryover of excess charitable contributions. 
D) Use of the installment method to recognize gain. 
E) Carryover of excess capital losses.

Question 14

Provisions in the tax law that promote energy conservation and more use of alternative (nonfossil) fuels can be justified by:

Accepted Answer

A) Political considerations. 
B) Economic and social considerations. 
C) Promoting administrative feasibility. 
D) Encouragement of small business. 
E) None of these. 
A) Political considerations. 
B) Economic and social considerations. 
C) Promoting administrative feasibility. 
D) Encouragement of small business. 
E) None of these.

Question 15

Jason's business warehouse is destroyed by fire.Because the insurance proceeds exceed the basis of the property, a gain results.If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to the application of the wherewithal to pay concept.

Accepted Answer

A) True 
 B)False

Question 16

Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.

Accepted Answer

A) True 
 B)False

Question 17

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 Agent's Report (RAR)

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 18

Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain in the year the installment sale occurs.

Accepted Answer

A) True 
 B)False

Question 19

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

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 20

Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.

Accepted Answer

A) True 
 B)False

Currently, the Federal corporate income tax is less progressive than the individual income tax.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Fraud and statute of limitations

Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.

For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Which of the following statements about a value added tax (VAT) is false?

An excise tax is often used to try to influence behavior.

One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from being accumulated within a family unit.

When interest is charged on a deficiency, any part of a month counts as a full month.

A parent employs his twin daughters, age 17, in his sole proprietorship.The daughters are not subject to FICA coverage.

The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.

States impose either a state income tax or a general sales tax, but not both types of taxes.

The majority of IRS audits are handled by correspondence.

Which, if any, of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

Provisions in the tax law that promote energy conservation and more use of alternative (nonfossil) fuels can be justified by:

Jason's business warehouse is destroyed by fire.Because the insurance proceeds exceed the basis of the property, a gain results.If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to the application of the wherewithal to pay concept.

Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.

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 Agent's Report (RAR)

Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain in the year the installment sale occurs.

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

Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.

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

Currently, the Federal corporate income tax is less progressive than the individual income tax.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Fraud and statute of limitations

Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.

For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Which of the following statements about a value added tax (VAT) is false?

An excise tax is often used to try to influence behavior.

One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from being accumulated within a family unit.

When interest is charged on a deficiency, any part of a month counts as a full month.

A parent employs his twin daughters, age 17, in his sole proprietorship.The daughters are not subject to FICA coverage.

The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.

States impose either a state income tax or a general sales tax, but not both types of taxes.

The majority of IRS audits are handled by correspondence.

Which, if any, of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

Provisions in the tax law that promote energy conservation and more use of alternative (nonfossil) fuels can be justified by:

Jason's business warehouse is destroyed by fire.Because the insurance proceeds exceed the basis of the property, a gain results.If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to the application of the wherewithal to pay concept.

Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.

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 Agent's Report (RAR)

Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain in the year the installment sale occurs.

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

Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.

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