Question 1

Provisions in the tax law that promote energy conservation and more use of alternative (non-fossil)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 2

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

Accepted Answer

A) True 
 B)False

Question 3

Using the choices provided below,show the justification for each provision of the tax law listed.
-A deduction for certain income from manufacturing activities.

Accepted Answer

A) Economic considerations 
B) Social considerations 
C) Equity considerations 
A) Economic considerations 
B) Social considerations 
C) Equity considerations

Question 4

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

Accepted Answer

A) True 
 B)False

Question 5

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all.
-Tax on transfers at death (inheritance type)

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to 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) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to 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 6

In late June 2014,Art is audited by the state and a large deficiency is assessed.In November of the same year,his Federal income tax return is audited by the IRS.What has probably happened?

Accepted Answer

The IRS has been not

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.

Accepted Answer

A) True 
 B)False

Question 9

A VAT (value added tax):

Accepted Answer

A) Is regressive in its effect. 
B) Has not proved popular outside of the U.S. 
C) Is not a tax on consumption. 
D) Is used exclusively by third world (less developed)countries. 
E) None of these. 
A) Is regressive in its effect. 
B) Has not proved popular outside of the U.S. 
C) Is not a tax on consumption. 
D) Is used exclusively by third world (less developed)countries. 
E) None of these.

Question 10

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

Accepted Answer

A) 3 years from date return is filed 
B) 3 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)6 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) 3 years from date return is filed 
B) 3 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)6 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 11

When a state decouples from a Federal tax provision,it means that this provision will not apply for state income tax purposes.

Accepted Answer

A) True 
 B)False

Question 12

A characteristic of the fraud penalties is:

Accepted Answer

A) When negligence and civil fraud apply to a deficiency,the negligence penalty predominates. 
B) Criminal fraud can result in a fine and a prison sentence. 
C) The criminal fraud penalty is 75% of the deficiency attributable to the fraud. 
D) The IRS has the same burden of proof in the case of criminal fraud than with civil fraud. 
E) None of these. 
A) When negligence and civil fraud apply to a deficiency,the negligence penalty predominates. 
B) Criminal fraud can result in a fine and a prison sentence. 
C) The criminal fraud penalty is 75% of the deficiency attributable to the fraud. 
D) The IRS has the same burden of proof in the case of criminal fraud than with civil fraud. 
E) None of these.

Question 13

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all.
-Income tax amnesty

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to 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) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to 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 14

Virtually all state income tax returns contain checkoff boxes for donations to various causes.On what grounds has this procedure been criticized?

Accepted Answer

In many cases the procedure is overused

Question 15

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

Accepted Answer

A) Can piggyback to the Federal version. 
B) Cannot apply to visiting nonresidents. 
C) Can decouple from the Federal version. 
D) Can provide occasional amnesty programs. 
E) None of these. 
A) Can piggyback to the Federal version. 
B) Cannot apply to visiting nonresidents. 
C) Can decouple from the Federal version. 
D) Can provide occasional amnesty programs. 
E) None of these.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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)

Accepted Answer

A) 3 years from date return is filed 
B) 3 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)6 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) 3 years from date return is filed 
B) 3 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)6 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 18

In 2012,Deborah became 65 years old.In 2013 she added a swimming pool,and in 2014 she converted the residence to rental property and moved into an assisted living facility.Since 2011,Deborah's ad valorem property taxes have decreased once and increased twice.Explain.

Accepted Answer

The decrease probably came in

Question 19

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

Accepted Answer

A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of these. 
A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of these.

Question 20

Not all of the states that impose a general sales tax also have a use tax.

Accepted Answer

A) True 
 B)False

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

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

Using the choices provided below,show the justification for each provision of the tax law listed. -A deduction for certain income from manufacturing activities.

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -Tax on transfers at death (inheritance type)

In late June 2014,Art is audited by the state and a large deficiency is assessed.In November of the same year,his Federal income tax return is audited by the IRS.What has probably happened?

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

A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.

A VAT (value added tax):

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

When a state decouples from a Federal tax provision,it means that this provision will not apply for state income tax purposes.

A characteristic of the fraud penalties is:

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -Income tax amnesty

Virtually all state income tax returns contain checkoff boxes for donations to various causes.On what grounds has this procedure been criticized?

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

As it is consistent with the wherewithal to pay concept,the tax law requires a seller to recognize 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. -Early filing and statute of limitations (deficiency situations)

In 2012,Deborah became 65 years old.In 2013 she added a swimming pool,and in 2014 she converted the residence to rental property and moved into an assisted living facility.Since 2011,Deborah's ad valorem property taxes have decreased once and increased twice.Explain.

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

Not all of the states that impose a general sales tax also have a use tax.

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 Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 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

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

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

Using the choices provided below,show the justification for each provision of the tax law listed. -A deduction for certain income from manufacturing activities.

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -Tax on transfers at death (inheritance type)

In late June 2014,Art is audited by the state and a large deficiency is assessed.In November of the same year,his Federal income tax return is audited by the IRS.What has probably happened?

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

A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.

A VAT (value added tax):

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

When a state decouples from a Federal tax provision,it means that this provision will not apply for state income tax purposes.

A characteristic of the fraud penalties is:

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -Income tax amnesty

Virtually all state income tax returns contain checkoff boxes for donations to various causes.On what grounds has this procedure been criticized?

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

As it is consistent with the wherewithal to pay concept,the tax law requires a seller to recognize 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. -Early filing and statute of limitations (deficiency situations)

In 2012,Deborah became 65 years old.In 2013 she added a swimming pool,and in 2014 she converted the residence to rental property and moved into an assisted living facility.Since 2011,Deborah's ad valorem property taxes have decreased once and increased twice.Explain.

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

Not all of the states that impose a general sales tax also have a use tax.

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 Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters