Question 1

Which of the following taxes is not a significant source of revenue for local governments?

Accepted Answer

A)  Real property tax 
B)  Personal property tax 
C)  Employment tax 
D)  All of the above 
A)  Real property tax 
B)  Personal property tax 
C)  Employment tax 
D)  All of the above

Question 2

The Internal Revenue Code is written by the Internal Revenue Service.

Accepted Answer

A) True 
 B)False

Question 3

What gives the federal government the right to impose a tax on individual and corporate income?

Accepted Answer

A)  Internal Revenue Code of 1986 
B)  Revenue Act of 1913 
C)  Sixteenth Amendment to the U.S. Constitution 
D)  Bill of Rights 
A)  Internal Revenue Code of 1986 
B)  Revenue Act of 1913 
C)  Sixteenth Amendment to the U.S. Constitution 
D)  Bill of Rights

Question 4

A tax on net income is an example of a transaction-based tax.

Accepted Answer

A) True 
 B)False

Question 5

The U.S. Constitution requires that federal tax legislation begins in the Senate.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is/are not a primary source of authority for the tax law?

Accepted Answer

A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority 
A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority

Question 7

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 8

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 9

SJF Inc., which has its corporate offices in Boise, Idaho, conducts business in Idaho, Oregon, California, and British Columbia, Canada. Which of the following statements is true?

Accepted Answer

A)  SJF must pay income tax only to Idaho and the United States. 
B)  SJF may be required to pay income tax to Idaho, Oregon, California, British Columbia, the United States, and Canada. 
C)  SJF must pay income tax only to Idaho, Oregon, California, and the United States. 
D)  SJF may be required to pay income tax to either the United States or to Canada, but not to both. 
A)  SJF must pay income tax only to Idaho and the United States. 
B)  SJF may be required to pay income tax to Idaho, Oregon, California, British Columbia, the United States, and Canada. 
C)  SJF must pay income tax only to Idaho, Oregon, California, and the United States. 
D)  SJF may be required to pay income tax to either the United States or to Canada, but not to both.

Question 10

Which of the following is not an advantage of state conformity to federal corporate income tax laws?

Accepted Answer

A)  States have complete control over their corporate income tax revenues. 
B)  States do not have to enact comprehensive corporate income tax statutes. 
C)  Conformity eases the compliance burden of corporate taxpayers. 
D)  All of the above are advantages of state conformity. 
A)  States have complete control over their corporate income tax revenues. 
B)  States do not have to enact comprehensive corporate income tax statutes. 
C)  Conformity eases the compliance burden of corporate taxpayers. 
D)  All of the above are advantages of state conformity.

Question 11

The potential for conflict among taxing jurisdictions is greatest for businesses operating on a global scale.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

In some cases, the payer of a tax can shift the economic incidence of the tax to a third party.

Accepted Answer

A) True 
 B)False

Question 14

The person who pays a tax directly to the government always bears the economic incidence of the tax.

Accepted Answer

A) True 
 B)False

Question 15

Revenue rulings and revenue procedures are written by:

Accepted Answer

A)  The Internal Revenue Service 
B)  The Department of the Treasury 
C)  The United States Congress 
D)  The Supreme Court 
A)  The Internal Revenue Service 
B)  The Department of the Treasury 
C)  The United States Congress 
D)  The Supreme Court

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

A sales tax is an example of an activity-based tax.

Accepted Answer

A) True 
 B)False

Question 19

Penser resides in the city of Lanock, Tennessee. She owns 100% of the stock of PSW Inc., which is incorporated under Tennessee law and conducts business in six different local jurisdictions in Tennessee. 
A. How many taxpayers are identified in the above statement of facts?
B. Identify the governments with jurisdiction to tax each of these taxpayers.

Accepted Answer

A. Ms. Penser is an individual taxpayer,

Question 20

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

Accepted Answer

A) True 
 B)False

Which of the following taxes is not a significant source of revenue for local governments?

The Internal Revenue Code is written by the Internal Revenue Service.

What gives the federal government the right to impose a tax on individual and corporate income?

A tax on net income is an example of a transaction-based tax.

The U.S. Constitution requires that federal tax legislation begins in the Senate.

Which of the following is/are not a primary source of authority for the tax law?

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

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

SJF Inc., which has its corporate offices in Boise, Idaho, conducts business in Idaho, Oregon, California, and British Columbia, Canada. Which of the following statements is true?

Which of the following is not an advantage of state conformity to federal corporate income tax laws?

The potential for conflict among taxing jurisdictions is greatest for businesses operating on a global scale.

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

In some cases, the payer of a tax can shift the economic incidence of the tax to a third party.

The person who pays a tax directly to the government always bears the economic incidence of the tax.

Revenue rulings and revenue procedures are written by:

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

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

A sales tax is an example of an activity-based tax.

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

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

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

Which of the following taxes is not a significant source of revenue for local governments?

The Internal Revenue Code is written by the Internal Revenue Service.

What gives the federal government the right to impose a tax on individual and corporate income?

A tax on net income is an example of a transaction-based tax.

The U.S. Constitution requires that federal tax legislation begins in the Senate.

Which of the following is/are not a primary source of authority for the tax law?

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

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

SJF Inc., which has its corporate offices in Boise, Idaho, conducts business in Idaho, Oregon, California, and British Columbia, Canada. Which of the following statements is true?

Which of the following is not an advantage of state conformity to federal corporate income tax laws?

The potential for conflict among taxing jurisdictions is greatest for businesses operating on a global scale.

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

In some cases, the payer of a tax can shift the economic incidence of the tax to a third party.

The person who pays a tax directly to the government always bears the economic incidence of the tax.

Revenue rulings and revenue procedures are written by:

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

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

A sales tax is an example of an activity-based tax.

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

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

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