Question 1

A characteristic of FICA is that:

Accepted Answer

A)  It applies 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 the above. 
A)  It applies 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 the above.

Question 2

In an office audit,the audit by the IRS takes place at the office of the IRS.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Allowing a domestic production activities deduction for certain manufacturing income can be justified:

Accepted Answer

A)  As mitigating the effect of the annual accounting period concept. 
B)  As promoting administrative feasibility. 
C)  By economic considerations. 
D)  Based on the wherewithal to pay concept. 
E)  None of the above. 
A)  As mitigating the effect of the annual accounting period concept. 
B)  As promoting administrative feasibility. 
C)  By economic considerations. 
D)  Based on the wherewithal to pay concept. 
E)  None of the above.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Accepted Answer

A) True 
 B)False

Question 7

Taxes not imposed by the Federal government include:

Accepted Answer

A)  Tobacco excise tax. 
B)  Hotel occupancy tax. 
C)  Customs duties (tariffs on imports). 
D)  Gas guzzler tax. 
E)  None of the above. 
A)  Tobacco excise tax. 
B)  Hotel occupancy tax. 
C)  Customs duties (tariffs on imports). 
D)  Gas guzzler tax. 
E)  None of the above.

Question 8

The tax law contains various provisions that encourage home ownership.
a.	On what basis can this objective be justified?
b.	Are there any negative considerations? Explain.

Accepted Answer

a.	Home ownership can be justified on ec

Question 9

Even though a client refuses to correct an error on a past return,it may be possible for a practitioner to continue to prepare returns for the client.

Accepted Answer

A) True 
 B)False

Question 10

Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to $40,000.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Question 13

Which,if any,of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

Accepted Answer

A)  Penalties are imposed for failure to file a return or pay a tax on time. 
B)  Prepaid income is taxed in the year received and not in the year earned. 
C)  Annual adjustments for indexation increases the amount of the standard deduction allowed. 
D)  Casualty losses must exceed 10% of AGI to be deductible. 
E)  A deduction is allowed for charitable contributions. 
A)  Penalties are imposed for failure to file a return or pay a tax on time. 
B)  Prepaid income is taxed in the year received and not in the year earned. 
C)  Annual adjustments for indexation increases the amount of the standard deduction allowed. 
D)  Casualty losses must exceed 10% of AGI to be deductible. 
E)  A deduction is allowed for charitable contributions.

Question 14

The ratification of the Sixteenth Amendment to the U.S.Constitution was necessary to validate the Federal income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 15

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

Accepted Answer

A) True 
 B)False

Question 16

No state has offered an income tax amnesty program more than once.

Accepted Answer

A) True 
 B)False

Question 17

State income taxes generally can be characterized by:

Accepted Answer

A)  A different date for filing than 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 and not applying to corporations. 
E)  None of the above. 
A)  A different date for filing than 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 and not applying to corporations. 
E)  None of the above.

Question 18

Using the choices provided below,show the justification for each provision of the tax law listed.Note: In some cases,more than one answer is appropriate.
a. Economic considerations
b. Social considerations
c. Equity considerations

Accepted Answer

A deduction for qualified tuit

Question 19

For the tax year 2012,Andrew reported gross income of $200,000 on his timely filed Federal income tax return.

Accepted Answer

The answer of For the tax year 2012,Andrew reported gross...

Question 20

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

Accepted Answer

A) True 
 B)False

A characteristic of FICA is that:

In an office audit,the audit by the IRS takes place at the office of the IRS.

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

Allowing a domestic production activities deduction for certain manufacturing income can be justified:

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

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Taxes not imposed by the Federal government include:

The tax law contains various provisions that encourage home ownership. a. On what basis can this objective be justified? b. Are there any negative considerations? Explain.

Even though a client refuses to correct an error on a past return,it may be possible for a practitioner to continue to prepare returns for the client.

Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to $40,000.

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

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

Which,if any,of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

The ratification of the Sixteenth Amendment to the U.S.Constitution was necessary to validate the Federal income tax on corporations.

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

No state has offered an income tax amnesty program more than once.

State income taxes generally can be characterized by:

Using the choices provided below,show the justification for each provision of the tax law listed.Note: In some cases,more than one answer is appropriate. a. Economic considerations b. Social considerations c. Equity considerations

For the tax year 2012,Andrew reported gross income of $200,000 on his timely filed Federal income tax return.

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

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: 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

A characteristic of FICA is that:

In an office audit,the audit by the IRS takes place at the office of the IRS.

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

Allowing a domestic production activities deduction for certain manufacturing income can be justified:

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

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Taxes not imposed by the Federal government include:

The tax law contains various provisions that encourage home ownership. a. On what basis can this objective be justified? b. Are there any negative considerations? Explain.

Even though a client refuses to correct an error on a past return,it may be possible for a practitioner to continue to prepare returns for the client.

Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to $40,000.

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

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

Which,if any,of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

The ratification of the Sixteenth Amendment to the U.S.Constitution was necessary to validate the Federal income tax on corporations.

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

No state has offered an income tax amnesty program more than once.

State income taxes generally can be characterized by:

Using the choices provided below,show the justification for each provision of the tax law listed.Note: In some cases,more than one answer is appropriate. a. Economic considerations b. Social considerations c. Equity considerations

For the tax year 2012,Andrew reported gross income of $200,000 on his timely filed Federal income tax return.

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

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: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters