1. Which of the following statements is true? a. Tax revenue from corporate income taxes is the largest source of tax revenue. b. If a progressive tax rate system is used, as a taxpayers taxable income increases, a progressively lower tax rate is applied. c. Adam Smith established five criteria for a good tax structure in 1776: equity, certainty, convenience, economy and simplicity. d. The only objective of the federal income tax law is to raise revenues for government operations. e. None of the answers provided is correct.

3. Which of the following statements is not true about tax law sources? a. The Internal Revenue Code serves as the highest legislative authority for tax research, planning and compliance activities. b. Administrative tax law sources include regulations and revenue rulings. c. It is possible for the Tax Court to intentionally issue conflicting decisions. d. A Tax Court Regular decision has more authoritative weight than a Memo decision. e. None of the answers provided is correct.

16. Which of the following statements is true regarding payments in divorce? a. Alimony payments made pursuant to a divorce finalized in 2020 are deductible by the payor and income to the recipient. b. Child support paid is deductible by the payor and income to the recipient. c. The party receiving property in a property settlement will have income equivalent to the fair market value of the property received. d. The party receiving property in a property settlement will have a fair market value basis in the property received. e. None of the answers provided is correct.

17. In 2020, Mr. and Mrs. Duncan redeem Series EE bonds and receive $16,000, consisting of $12,000 of principal and $4,000 of interest. Net qualifying educational expenses total $11,000. They are married filing jointly and have other AGI of $131,550. How much interest income must be included in their income in 2020 because of the redemption of savings bonds? a. $4,000 b. $2,350 c. $1,650 d. $1,250 e. None of the answers provided is correct.

18. Which of the following statements is true? a. Gains from the sale of tax-exempt bonds are also tax-exempt. b. Stock dividends are generally not taxable. c. In Texas, income from separate property is considered to be separate income. d. Unemployment compensation is not taxable. e. None of the answers provided is correct.