TRUE-FALSE QUESTIONS.

1. The Sixteenth Amendment gave Congress the right to tax all income from whatever source derived.

2. A regressive tax structure is one in which the average tax rate increases as the tax base decreases.

3. Another name for a flat tax is a progressive tax.

4. Stamps purchased to enable postal delivery services are an example of user fees.

5. An equitable tax system is a fair tax system.

6. Most state and local property taxes use a single tax rate, making them a type of ad valorem tax.

7. A system whereby income taxes are withheld systematically from current wages can be referred to as a "pay-as-you-go" system.

8. Tax avoidance can be the sole business purpose for a transaction.

9. The doctrine of separation of powers refers to the relationship between the Internal Revenue Service and the Treasury Department.

10. Revenue legislation begins in the Senate.

11. All relevant taxes, including state, local and foreign income taxes, as well as employment and other taxes, must be taken into consideration when computing the tax effects of any proposed transaction.

12. Once taxable income has been calculated, the taxpayer's regular tax liability is computed using the progressive income tax rates; however, different tax rates apply to corporate and individual taxpayers.

13. A partnership is taxed as a separate entity.

14. Flow-through entities do not pay tax on taxable income, so it is not necessary for them to keep track of their gross income.

15. Congress has been known to use tax laws to achieve economic, political, and social goals.