Problem #1 of 24 Which of the following is not considered a tax under the IRS definition? O a. A payment of .8% local tax to the Borough of Queens b. An additional 8% that is charged for all goods purchased in San Bernardino County c. A payment of 2.5% property taxes used to fund the local school system d. Payments to the city for water and sewer services - Ref 24 Which of the following statements regarding income taxes is true? a. Income taxes are determined on a quarterly basis. b. Employers must withhold income taxes from wages and salaries of their employees and remit them in intervals that they determine, to the appropriate government body Taxpayers pay income taxes on a pay as you go basis d. Taxpayers must estimate future income and prepay based on that. blem #3 of 24 Which of the following statements regarding income shifting in tax planning is true? a. Income sitting involves moving income among related taxpayers to achieve the lowest total tax on one taxpayer; however, it ignores the total income tax of all related taxpayers. b. Shining is commonly done by transferring income producing property among related individuals Dc Shifting commonly done by using corporations that taxpayers control to shift income into the highest marginal tax rates d. Income shifting involves moving income among related taxpayers to achieve the lowest marginal taxes on the entire income of the related taxpayers. Problem 4 of 24 Which of the following is considered a tax according to the IRS definition? a Money required to park downtown (put into a parking meter) b. A fee paid for driving on a toll road C. An annual licensing fee paid to a government entity for an accounting license d. Payment of property taxes, which are used to fund the local school system Problem 5 of 24 Which of the following statements regarding IRS examinations is true? a mice examinations are conducted in the taxpayer's business office with an IRS agent examining all aspects of the taxpayer's business bome examinations are formal and generally aimed at corporations c. In field examinations, the taxpayer most often will have his/her attorney present for representation d. Correspondence examinations may be resolved with a written reply to the questions raised by the IRS, along with copies of supporting documents Problem #6 of 24 Primary sources of tax law include which of the following? ca. Legislative sources, judicial sources, and tax textbooks b. Administrative sources, legislative sources, and tax newsletters C. Legislative sources, administrative sources, and professional tax journals d. Legislative sources, administrative sources, and judicial sources Problem #7 of 24 Which of the following is not a basic type of IRS examination? a. Office examinations b. Field examinations c. Court-approved examinations d. Correspondence examinations Problem #8 of 24 Which of the following statements regarding income tax withholding is true? a. Employees prepay tax on wages through payroll withholding. b. Self-employed people generally use the payroll tax with holding system. Some types of income, including pensions and some gambling winnings, are not subject to the withholding of tax by the payer. d. Employees prepay tax on wages through estimated payments Problem #9 of 24 Which of the following statements regarding tax credits is true? A tax credit is deducted from gross income to arrive at taxable income. b. A tax credit is added to the income tax liability C. A tax credit is less valuable than a deduction of an equal amount. d. A tax credit is a direct reduction in the income tax liability Problem #10 of 24 Which of the following statements regarding sales tax is not true? a Sales tax is based on a taxpayer's consumption of goods and services (in contrast to income taxes, which are based on income). b. Sales taxis collected by the business that sells the goods or services subject to the tax c. Sales tax is paid by the business where the goods or service are purchased d. Sales tax is based on a fiat percentage of the selling price of a product or service Problem #11 of 24 Which of the following statements is not true? 2 a. Taxpayers may plan transactions to make their tax bills as low as possible, b. Tax evasion is illegal and is subject to substantial penalties c. When given an option, taxpayers must choose a method that will result in the highest tax liability d. Taxpayers do not have to pay more income tax than is required by the tax law. Problem #1 of 24 Which of the following is not considered a tax under the IRS definition? O a. A payment of .8% local tax to the Borough of Queens b. An additional 8% that is charged for all goods purchased in San Bernardino County c. A payment of 2.5% property taxes used to fund the local school system d. Payments to the city for water and sewer services - Ref 24 Which of the following statements regarding income taxes is true? a. Income taxes are determined on a quarterly basis. b. Employers must withhold income taxes from wages and salaries of their employees and remit them in intervals that they determine, to the appropriate government body Taxpayers pay income taxes on a pay as you go basis d. Taxpayers must estimate future income and prepay based on that. blem #3 of 24 Which of the following statements regarding income shifting in tax planning is true? a. Income sitting involves moving income among related taxpayers to achieve the lowest total tax on one taxpayer; however, it ignores the total income tax of all related taxpayers. b. Shining is commonly done by transferring income producing property among related individuals Dc Shifting commonly done by using corporations that taxpayers control to shift income into the highest marginal tax rates d. Income shifting involves moving income among related taxpayers to achieve the lowest marginal taxes on the entire income of the related taxpayers. Problem 4 of 24 Which of the following is considered a tax according to the IRS definition? a Money required to park downtown (put into a parking meter) b. A fee paid for driving on a toll road C. An annual licensing fee paid to a government entity for an accounting license d. Payment of property taxes, which are used to fund the local school system Problem 5 of 24 Which of the following statements regarding IRS examinations is true? a mice examinations are conducted in the taxpayer's business office with an IRS agent examining all aspects of the taxpayer's business bome examinations are formal and generally aimed at corporations c. In field examinations, the taxpayer most often will have his/her attorney present for representation d. Correspondence examinations may be resolved with a written reply to the questions raised by the IRS, along with copies of supporting documents Problem #6 of 24 Primary sources of tax law include which of the following? ca. Legislative sources, judicial sources, and tax textbooks b. Administrative sources, legislative sources, and tax newsletters C. Legislative sources, administrative sources, and professional tax journals d. Legislative sources, administrative sources, and judicial sources Problem #7 of 24 Which of the following is not a basic type of IRS examination? a. Office examinations b. Field examinations c. Court-approved examinations d. Correspondence examinations Problem #8 of 24 Which of the following statements regarding income tax withholding is true? a. Employees prepay tax on wages through payroll withholding. b. Self-employed people generally use the payroll tax with holding system. Some types of income, including pensions and some gambling winnings, are not subject to the withholding of tax by the payer. d. Employees prepay tax on wages through estimated payments Problem #9 of 24 Which of the following statements regarding tax credits is true? A tax credit is deducted from gross income to arrive at taxable income. b. A tax credit is added to the income tax liability C. A tax credit is less valuable than a deduction of an equal amount. d. A tax credit is a direct reduction in the income tax liability Problem #10 of 24 Which of the following statements regarding sales tax is not true? a Sales tax is based on a taxpayer's consumption of goods and services (in contrast to income taxes, which are based on income). b. Sales taxis collected by the business that sells the goods or services subject to the tax c. Sales tax is paid by the business where the goods or service are purchased d. Sales tax is based on a fiat percentage of the selling price of a product or service Problem #11 of 24 Which of the following statements is not true? 2 a. Taxpayers may plan transactions to make their tax bills as low as possible, b. Tax evasion is illegal and is subject to substantial penalties c. When given an option, taxpayers must choose a method that will result in the highest tax liability d. Taxpayers do not have to pay more income tax than is required by the tax law