Question 1

A tax with a graduated rate structure must have at least two brackets of tax base.

Accepted Answer

A) True 
 B)False

Question 2

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 device 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 device 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 3

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

Question 4

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 5

Which tax raises the most revenue for the federal government?

Accepted Answer

A)  Corporate income tax 
B)  Individual income tax 
C)  Excise taxes 
D)  Transfer taxes 
A)  Corporate income tax 
B)  Individual income tax 
C)  Excise taxes 
D)  Transfer taxes

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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 10

Treasury regulations are tax laws written by the Treasury Department.

Accepted Answer

A) True 
 B)False

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

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.
Grant is potentially liable for federal, state, and local income taxes. He will also be liable for federal employment taxes. Market Enterprises will pay federal employment taxes and federal and state unemployment taxes based on compensation paid to Grant.

Accepted Answer

Grant is potentially liable for federal,

Question 13

Less than half of the state governments depend on gambling as a source of revenue.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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 16

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Which of the following taxes is a significant source of revenue for state governments?

Accepted Answer

A)  General sales tax 
B)  Individual income tax 
C)  Corporate income tax 
D)  All of the above 
A)  General sales tax 
B)  Individual income tax 
C)  Corporate income tax 
D)  All of the above

Question 19

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.

Question 20

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

Accepted Answer

A)  Company N must collect Oklahoma sales tax from its Oklahoma customers and Missouri sales tax from its Missouri customers. 
B)  Company N must collect Oklahoma sales tax from both its Oklahoma and Missouri customers. 
C)  Company N must collect Oklahoma sales tax from its Oklahoma customers. 
D)  Company D is not required to collect sales tax on any mail order sales. 
A)  Company N must collect Oklahoma sales tax from its Oklahoma customers and Missouri sales tax from its Missouri customers. 
B)  Company N must collect Oklahoma sales tax from both its Oklahoma and Missouri customers. 
C)  Company N must collect Oklahoma sales tax from its Oklahoma customers. 
D)  Company D is not required to collect sales tax on any mail order sales.

A tax with a graduated rate structure must have at least two brackets of tax base.

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

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

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):

Which tax raises the most revenue for the federal government?

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

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

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

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

Treasury regulations are tax laws written by the Treasury Department.

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.

Less than half of the state governments depend on gambling as a source of revenue.

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?

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

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

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?

Which of the following taxes is a significant source of revenue for state governments?

Which of the following statements about Treasury regulations is false?

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

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 with a graduated rate structure must have at least two brackets of tax base.

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

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

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):

Which tax raises the most revenue for the federal government?

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

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

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

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

Treasury regulations are tax laws written by the Treasury Department.

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.

Less than half of the state governments depend on gambling as a source of revenue.

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?

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

Sellers of retail goods are responsible for collecting sales tax from their customers and remitting the tax to the state government.

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?

Which of the following taxes is a significant source of revenue for state governments?

Which of the following statements about Treasury regulations is false?

Company N operates a mail order business out of its headquarters in Tulsa, Oklahoma. This year, it mailed $892,000 worth of product to customers residing in Oklahoma and $489,300 worth of product to customers residing in Missouri. Which of the following statements is true?

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