Question 1

A tax is intended to deter or punish unacceptable behavior.

Accepted Answer

A) True 
 B)False

Question 2

Grant Wilson is an employee of Market Enterprises, a corporation operating in state A. Identify the different types of potential taxes to be paid by both Grant and Market Enterprises with respect to this employment relationship.

Accepted Answer

Grant is potentially liable for federal,

Question 3

Which of the following is not characteristic of an excise tax?

Accepted Answer

A)  An excise tax is levied on the retail sale of specific goods. 
B)  Excise tax rates typically are higher than general sales tax rates. 
C)  Purchasers of luxury items are responsible for paying any excise tax directly to the government. 
D)  All of the above are characteristics of an excise tax. 
A)  An excise tax is levied on the retail sale of specific goods. 
B)  Excise tax rates typically are higher than general sales tax rates. 
C)  Purchasers of luxury items are responsible for paying any excise tax directly to the government. 
D)  All of the above are characteristics of an excise tax.

Question 4

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. 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 5

Purchasers of consumer goods through the mail are responsible for paying use tax on goods for which sales tax was not collected by the seller.

Accepted Answer

A) True 
 B)False

Question 6

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Payment of a tax entitles the payer to a specific good or service from the government.

Accepted Answer

A) True 
 B)False

Question 9

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is an example of a transaction-based tax?

Accepted Answer

A)  A tax on net business income 
B)  An excise tax 
C)  An estate tax on the transfer of assets at death 
D)  Both an excise tax and an estate tax on the transfer of assets at death. 
A)  A tax on net business income 
B)  An excise tax 
C)  An estate tax on the transfer of assets at death 
D)  Both an excise tax and an estate tax on the transfer of assets at death.

Question 11

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 12

The federal government imposed the first income tax to raise money to fight the War of 1812.

Accepted Answer

A) True 
 B)False

Question 13

Mr Smith resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 7% sales tax. Which of the following statements is true?

Accepted Answer

A)  Mr. Smith is entitled to a refund of 1% of the purchase price of the furniture. 
B)  Mr. Smith does not owe a use tax to his home state. 
C)  Mr. Smith's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true. 
A)  Mr. Smith is entitled to a refund of 1% of the purchase price of the furniture. 
B)  Mr. Smith does not owe a use tax to his home state. 
C)  Mr. Smith's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true.

Question 14

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 15

Ad valorem property taxes are the major source of revenue for local governments.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following does not contribute to the dynamic nature of the tax law?

Accepted Answer

A)  The political pressure from professional lobbyists 
B)  Changes in the economic and social climate 
C)  Changes in revenue needs of the government 
D)  All of the above contribute to the dynamic nature of the tax law 
A)  The political pressure from professional lobbyists 
B)  Changes in the economic and social climate 
C)  Changes in revenue needs of the government 
D)  All of the above contribute to the dynamic nature of the tax law

Question 17

The property tax on a rental house owned by Mr Janey increased by $1,200 this year. Mr Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Accepted Answer

A)  Mr. Janey 
B)  Ms. Lacey 
C)  Both Mr. Janey and Ms. Lacey 
D)  Neither Mr. Janey nor Ms. Lacey 
A)  Mr. Janey 
B)  Ms. Lacey 
C)  Both Mr. Janey and Ms. Lacey 
D)  Neither Mr. Janey nor Ms. Lacey

Question 18

Which of the following statements regarding tax systems is false?

Accepted Answer

A)  A single percentage that applies to the entire tax base is described as a flat rate. 
B)  When designing a tax, governments try to identify tax bases that taxpayers can easily avoid or conceal. 
C)  A tax base is an item, occurrence, transaction, or activity with respect to which a tax is levied. 
D)  With regard to tax systems, the term revenue refers to the total tax collected by the government. 
A)  A single percentage that applies to the entire tax base is described as a flat rate. 
B)  When designing a tax, governments try to identify tax bases that taxpayers can easily avoid or conceal. 
C)  A tax base is an item, occurrence, transaction, or activity with respect to which a tax is levied. 
D)  With regard to tax systems, the term revenue refers to the total tax collected by the government.

Question 19

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

Accepted Answer

A) True 
 B)False

Question 20

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 the above is 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 the above is false.

A tax is intended to deter or punish unacceptable behavior.

Grant Wilson is an employee of Market Enterprises, a corporation operating in state A. Identify the different types of potential taxes to be paid by both Grant and Market Enterprises with respect to this employment relationship.

Which of the following is not characteristic of an excise tax?

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. Who bears the incidence of the corporate tax increase?

Purchasers of consumer goods through the mail are responsible for paying use tax on goods for which sales tax was not collected by the seller.

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

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

Payment of a tax entitles the payer to a specific good or service from the government.

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Which of the following is an example of a transaction-based tax?

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.

The federal government imposed the first income tax to raise money to fight the War of 1812.

Mr Smith resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 7% sales tax. Which of the following statements is true?

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

Ad valorem property taxes are the major source of revenue for local governments.

Which of the following does not contribute to the dynamic nature of the tax law?

The property tax on a rental house owned by Mr Janey increased by $1,200 this year. Mr Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Which of the following statements regarding tax systems is false?

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

Which of the following statements about Treasury regulations is false?

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

A tax is intended to deter or punish unacceptable behavior.

Grant Wilson is an employee of Market Enterprises, a corporation operating in state A. Identify the different types of potential taxes to be paid by both Grant and Market Enterprises with respect to this employment relationship.

Which of the following is not characteristic of an excise tax?

Acme Inc.'s federal income tax increased by $100,000 this year. As a result, Acme reduced the annual dividend paid on its common stock by $100,000. Who bears the incidence of the corporate tax increase?

Purchasers of consumer goods through the mail are responsible for paying use tax on goods for which sales tax was not collected by the seller.

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

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

Payment of a tax entitles the payer to a specific good or service from the government.

Taxes on personal property are more difficult to administer and enforce than taxes on real property.

Which of the following is an example of a transaction-based tax?

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.

The federal government imposed the first income tax to raise money to fight the War of 1812.

Mr Smith resides in a state with a 6% sales and use tax. He recently traveled to another state to buy furniture and paid that state's 7% sales tax. Which of the following statements is true?

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

Ad valorem property taxes are the major source of revenue for local governments.

Which of the following does not contribute to the dynamic nature of the tax law?

The property tax on a rental house owned by Mr Janey increased by $1,200 this year. Mr Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Which of the following statements regarding tax systems is false?

The U.S. Constitution gives the federal government the power to impose a tax on income from whatever source derived.

Which of the following statements about Treasury regulations is false?

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