Question 1

Wages are subject to the federal income tax and not subject to any other tax.

Select one:

A. True

B. False

Question 2

Which of the following is likely to be a taxpayer who pays federal income tax

Select one:

A. Limited liability company

B. Corporation not making the S election

C. Corporation making the S election

D. General partnership

Question 3

Local taxes on the assessed value of real property are usually paid only when you buy the property.

Select one:

A. True

B. False

Question 4

Which of the following statements are true?

Select one:

A. Individual income tax liability is determined by a scheduled meeting with an employee of the Internal Revenue Service

B. The individual income tax is determined by the taxpayer who files an annual tax return

C. If a taxpayer forgets to claim a deduction on the orginally filed return. The deduction cannot ever be claimed.

D. None of the above are true

E. b. and c. are true

Question 5

The federal income tax has been determined to be unconstitutional and can exist only based on a 1913 amendment to the US Constitution.

Select one:

A. True

B. False

Question 6

The statute of limitation applicable to assessments by the IRS is

Select one:

A. Three years from the date of the actual filing the of the tax return

B. Three years from the later of the orginal due date of the return or the date of actual filing

C. Three years from the earlier of the orginal due date of the return or the date of actual filing

D. None of the above

Question 7

Conducting business as a self employed independent contractor has an inherent tax advantage over being an employee. This advantage is based on the fact that self employed persons do not pay the FICA and Medicare taxes which are imposed on employees and employers.

Select one:

A. True

B. False

Question 8

If a case involving the federal income tax is being decided by the Supreme Court of the United States. Which of the following statements is true.

Select one:

A. The regulations promulgated by the US Treasury are valid legal authority for the court to consider.

B. The Internal Revue Code is legal authority that the Supreme Court must consider.

C. a. and b. are correct

D. none of the above

Question 9

Adjusted Gross Income is a key concept in determining a corporation's taxable income

Select one:

A. True

B. False

Question 10

If an individual taxpayer had taxable income composed of equal amounts of wages subject to withholding and investment income. The withholding amount is significantly less than last year's tax liability. Which of the following describes the action necessary to avoid penalty for underpayment of estimated tax.

Select one:

A. At each payment date make estimated tax payments sufficient to cause withholding plus estimated tax payments to equal a prorata amount of the previous year's tax

B. Make no estimated tax payments.

C. On January 15 of the year after the taxable year, make estimated tax payments equal to the difference between withholding and the previous year tax.

D. None of the above