Question 1

A tax is a payment to support the cost of government.

Accepted Answer

A) True 
 B)False

Question 2

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following sources of tax law carries the most authority?

Accepted Answer

A)  Revenue procedure 
B)  Treasury regulation 
C)  Supreme Court decision 
D)  The three sources of tax law have equal authority 
A)  Revenue procedure 
B)  Treasury regulation 
C)  Supreme Court decision 
D)  The three sources of tax law have equal authority

Question 4

A state government may levy either a sales tax or a use tax on consumers but not both.

Accepted Answer

A) True 
 B)False

Question 5

A user fee entitles the payer to a specific good or service from the government.

Accepted Answer

A) True 
 B)False

Question 6

The majority of state governments raise revenue from both personal and corporate income taxes.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements about Treasury regulations is false?

Accepted Answer

A)  Treasury regulations are written to interpret and explain the Internal Revenue Code. 
B)  Treasury regulations are part of the statutory law. 
C)  A federal court can invalidate a Treasury regulation if the court concludes that the regulation incorrectly interprets the Internal Revenue Code. 
D)  None of these choices are false. 
A)  Treasury regulations are written to interpret and explain the Internal Revenue Code. 
B)  Treasury regulations are part of the statutory law. 
C)  A federal court can invalidate a Treasury regulation if the court concludes that the regulation incorrectly interprets the Internal Revenue Code. 
D)  None of these choices are false.

Question 8

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

Accepted Answer

A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Excise tax 
A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Excise tax

Question 9

According to the U.S. Supreme Court, states may require businesses to collect sales tax based on the residency of the purchaser.

Accepted Answer

A) True 
 B)False

Question 10

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Accepted Answer

A)  Acme Inc. 
B)  Acme's customers. 
C)  Acme's employees. 
D)  Acme's shareholders. 
A)  Acme Inc. 
B)  Acme's customers. 
C)  Acme's employees. 
D)  Acme's shareholders.

Question 11

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Accepted Answer

A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil. 
A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil.

Question 12

Which of the following statements about the Internal Revenue Code is false?

Accepted Answer

A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code. 
A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code.

Question 13

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Accepted Answer

A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of these choices are correct 
A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of these choices are correct

Question 14

Which of the following statements regarding the political process of creating tax law is false?

Accepted Answer

A)  The political process contributes to the dynamic nature of the tax law. 
B)  Special interest groups have little effect on the tax legislative process. 
C)  When taxpayers devise a new tactic for reducing their tax burdens, governments respond by enacting a new rule to render the tactic ineffective. 
D)  Changes in political philosophy often reflect shifts in the public attitude about the proper role of taxes in society. 
A)  The political process contributes to the dynamic nature of the tax law. 
B)  Special interest groups have little effect on the tax legislative process. 
C)  When taxpayers devise a new tactic for reducing their tax burdens, governments respond by enacting a new rule to render the tactic ineffective. 
D)  Changes in political philosophy often reflect shifts in the public attitude about the proper role of taxes in society.

Question 15

Mrs. King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

Accepted Answer

A)  The U.S. government has jurisdiction to tax Mrs. King. 
B)  The U.S. government has no jurisdiction to tax Mrs. King because she does not live in the United States. 
C)  The U.S. government has no jurisdiction to tax Mrs. King because she does not earn any income from a source within the United States. 
D)  Mrs. King can elect whether to pay tax to the United States or to South Africa. 
A)  The U.S. government has jurisdiction to tax Mrs. King. 
B)  The U.S. government has no jurisdiction to tax Mrs. King because she does not live in the United States. 
C)  The U.S. government has no jurisdiction to tax Mrs. King because she does not earn any income from a source within the United States. 
D)  Mrs. King can elect whether to pay tax to the United States or to South Africa.

Question 16

What is the major difference between a sales tax and an excise tax?

Accepted Answer

A)  Sales taxes are levied by state governments, while excise taxes are levied only by the federal government. 
B)  Sales taxes are imposed on the purchase of a wide variety of items, while excise taxes are imposed on the purchase of a few specific items. 
C)  Sales taxes must be collected by the seller, while excise taxes must be paid directly by the purchaser. 
D)  Sales taxes are imposed on the purchase of tangible goods, while excise taxes are imposed on the purchase of services. 
A)  Sales taxes are levied by state governments, while excise taxes are levied only by the federal government. 
B)  Sales taxes are imposed on the purchase of a wide variety of items, while excise taxes are imposed on the purchase of a few specific items. 
C)  Sales taxes must be collected by the seller, while excise taxes must be paid directly by the purchaser. 
D)  Sales taxes are imposed on the purchase of tangible goods, while excise taxes are imposed on the purchase of services.

Question 17

Which of the following is an earmarked tax?

Accepted Answer

A)  A tax imposed on the purchase of specific items such as liquor or cigarettes 
B)  A tax that generates revenues that the government can spend only to build more National Parks 
C)  A tax imposed only on individuals who earn more than $1 million annually 
D)  A tax that generates revenues that the government can spend for any purpose 
A)  A tax imposed on the purchase of specific items such as liquor or cigarettes 
B)  A tax that generates revenues that the government can spend only to build more National Parks 
C)  A tax imposed only on individuals who earn more than $1 million annually 
D)  A tax that generates revenues that the government can spend for any purpose

Question 18

Richton Company operates its business solely in Jurisdiction H, which levies a 6% sales and use tax. This year, Richton paid $1,438,000 to purchase tangible property from a dealer located in Jurisdiction W. This purchase was subject to W's 3.5% sales tax. The property was shipped to Richton's office in Jurisdiction H for use in its business. Compute Richton's sales or use tax with respect to this transaction.

Accepted Answer

Richton must pay $50,330 sales

Question 19

Which of the following is an example of an activity-based tax?

Accepted Answer

A)  A tax on business' net income 
B)  An excise tax 
C)  A gift tax on the transfer of assets by gift 
D)  Both a tax on business' net income and a gift tax on the transfer of assets by gift 
A)  A tax on business' net income 
B)  An excise tax 
C)  A gift tax on the transfer of assets by gift 
D)  Both a tax on business' net income and a gift tax on the transfer of assets by gift

Question 20

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens or permanent U.S. residents but who earn income from a source within the United States.

Accepted Answer

A) True 
 B)False

A tax is a payment to support the cost of government.

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Which of the following sources of tax law carries the most authority?

A state government may levy either a sales tax or a use tax on consumers but not both.

A user fee entitles the payer to a specific good or service from the government.

The majority of state governments raise revenue from both personal and corporate income taxes.

Which of the following statements about Treasury regulations is false?

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

According to the U.S. Supreme Court, states may require businesses to collect sales tax based on the residency of the purchaser.

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Which of the following statements about the Internal Revenue Code is false?

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Which of the following statements regarding the political process of creating tax law is false?

Mrs. King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

What is the major difference between a sales tax and an excise tax?

Which of the following is an earmarked tax?

Which of the following is an example of an activity-based tax?

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens or permanent U.S. residents but who earn income from a source within the United States.

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 1: Taxes and Taxing Jurisdictions

A tax is a payment to support the cost of government.

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Which of the following sources of tax law carries the most authority?

A state government may levy either a sales tax or a use tax on consumers but not both.

A user fee entitles the payer to a specific good or service from the government.

The majority of state governments raise revenue from both personal and corporate income taxes.

Which of the following statements about Treasury regulations is false?

The state of Virginia charges motorists 50 cents for every trip across a toll bridge over the James River. This charge is an example of a(n):

According to the U.S. Supreme Court, states may require businesses to collect sales tax based on the residency of the purchaser.

Acme Inc.'s property taxes increased by $65,000 this year. As a result, Acme increased the sale prices of its products to generate $65,000 more revenue. Who bears the incidence of the corporate tax increase?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Which of the following statements about the Internal Revenue Code is false?

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Which of the following statements regarding the political process of creating tax law is false?

Mrs. King is a U.S. citizen who permanently resides in South Africa. Which of the following statements is true?

What is the major difference between a sales tax and an excise tax?

Which of the following is an earmarked tax?

Which of the following is an example of an activity-based tax?

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens or permanent U.S. residents but who earn income from a source within the United States.

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters