Posted: May 13th, 2018

tax questions true false..,,

101. The U.S.
(either Federal, state, or local) does not impose:
a. Franchise
taxes.
b. Severance
taxes.
c. Occupational
fees.
d. Custom
duties.
e. Export
duties.

102. The
proposed flat tax:
a. Would
eliminate the income tax.
b. Would
simplify the income tax.
c. Would
tax the increment in value as goods move through the production and
manufacturing stages to the marketplace.
d. Is a tax
on consumption.
e. None of
the above.

103. A VAT
(value added tax):
a. Is regressive
in its effect.
b. Has not
proved popular outside of the U.S.
c. Is not a
tax on consumption.
d. Is used
exclusively by third world (less developed) countries.
e. None of
the above.

104. Characteristics
of the “Fair Tax” (i.e., national sales tax) include which, if any, of the
following:
a. Abolition
of the Federal individual (but not the corporate) income tax.
b. Abolition
of all Federal income taxes but retention of payroll taxes (including the
self-employment tax).
c. Abolition
of all Federal income taxes and payroll taxes but retention of the Federal
estate and gift taxes.
d. Abolition
of all Federal income and payroll taxes as well as the Federal estate and gift
taxes.
e. None of the
above.

105. In terms of
probability, which of the following taxpayers would be least likely to be
audited by the IRS?
a. Taxpayer
owns and operates a check-cashing service.
b. Taxpayer
is an employed electrician.
c. Taxpayer
just received a $3 million personal injury award as a result of a lawsuit.
d. Taxpayer
just won a $1 million slot machine jackpot at a Las Vegas casino.
e. Taxpayer
has been audited several times before.

106. Which of
the following is a characteristic of the audit process?
a. Most
taxpayer audits involve “special” agents.
b. Self-employed
taxpayers are less likely to be selected for audit than employed taxpayers.
c. Less
important issues are handled by means of a correspondence audit.
d. If a
taxpayer disagrees with the IRS auditor’s finding, the only resort is to the
courts.
e. None of
the above.

107. David files
his tax return 45 days after the due date. Along with the return, David remits
a check for $40,000 which is the balance of the tax owed. Disregarding the
interest element, David’s total failure to file and to pay penalties are:
a. $400.
b. $3,600.
c. $4,000.
d. $4,400.
e. None of the above.

108. A
characteristic of the fraud penalties is:
a. When
negligence and civil fraud apply to a deficiency, the negligence penalty
predominates.
b. Criminal
fraud can result in a fine and a prison sentence.
c. The
criminal fraud penalty is 75% of the deficiency attributable to the fraud.
d. The IRS
has the same burden of proof in the case of criminal fraud than with civil
fraud.
e. None of
the above.

109. Regarding
proper ethical guidelines, which (if any) of the following is correct?
a. The use
of client estimates in preparing a return may be acceptable.
b. Under no
circumstances should a question on a tax return be left unanswered.
c. If a
client has made a mistake in a prior year’s return and refuses to correct it,
you should withdraw from the engagement.
d. If the
exact amount of a deduction is not certain (e.g., around mid-$600s) , it should
be recorded as an odd amount (i.e., $649) so as to increase the appearance of
greater certainty.
e. None of
the above.

?
110. Both
economic and social considerations can be used to justify:
a. Favorable
tax treatment for accident and health plans provided for employees and financed
by employers.
b. Disallowance
of any deduction for expenditures deemed to be contrary to public policy (e.g.,
fines, penalties, illegal kickbacks, bribes to government officials).
c. Various
tax credits, deductions, and exclusions that are designed to encourage
taxpayers to obtain additional education.
d. Allowance
of a deduction for state and local income taxes paid.
e. None of
the above.

111. Social
considerations can be used to justify:
a. Allowance
of a credit for child care expenses.
b. Allowing
excess capital losses to be carried over to other years.
c. Allowing
accelerated amortization for the cost of installing pollution control facilities.
d. Allowing
a Federal income tax deduction for state and local sales taxes.
e. None of
the above.

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

113. Provisions
in the tax law that promote energy conservation and more use of alternative
(non-fossil) fuels can be justified by:
a. Political
considerations.
b. Economic
and social considerations.
c. Promoting
administrative feasibility.
d. Encouragement
of small business.
e. None of
the above.

114. Which, if
any, of the following provisions cannot be justified as mitigating the effect
of the annual accounting period concept?
a. Nonrecognition
of gain allowed for involuntary conversions.
b. Net
operating loss carryback and carryover provisions.
c. Carryover
of excess charitable contributions.
d. Use of
the installment method to recognize gain.
e. Carryover
of excess capital losses.

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

116. A landlord
leases property upon which the tenant makes improvements. The improvements are
significant and are not made in lieu of rent. At the end of the lease, the
value of the improvements are not income to the landlord. This rule is an example
of:
a. A clear
reflection of income result.
b. The tax
benefit rule.
c. The
arm’s length concept.
d. The
wherewithal to pay concept.
e. None of
the above.

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