Taxation 1 WGU C237 Review Questions with Correct Answers 100% Verified By Experts|
2025/2026 Latest Update
1913 The 16th amendment established that congress has the power to lay and collect taxes
on incomes, from whatever source derived, without apportionment among the several States,
and without regard to any census or enumeration. The amendment was ratified in:
Progressive tax rate structure The U.S. Federal Income Tax System is:
Sufficiency Judging the _______________ of a tax system means assessing the amount of
the tax revenues it must generate to pay governmental expenditures.
6.2% What is the Old Age, Survivors, and Disability Insurance (OASDI) tax rate to an
employee?
Taxpayer must file by April 15 What is the filing date for an Individual taxpayer if he is out of
the country when his taxes are due?
$42,522
•$227,000 - $172,750 = $54,250 x 24%= $13,020
•$29,502 + $13,020 = $42,522 A married couple who file as married filing joint who do not
operate a business have earned $227,000 of taxable income last year. What is their tax liability?
•Gross Income
•Adjusted Gross Income
•Taxable Income Three types of income
Indefinite/never- fraudulent returns or failing to file a return John Jacob Jingleheimer
Schmicht filed a fraudulent return with the IRS trying to get a refund when he never really had a
job, what is the statue of limitation on this situation?
, Greater of $5,000 or 75% of income derived from preparing the taxpayer's tax return.
Sammy Shyster, CPA prepares taxes for Slim McGarett. He knowingly understates Slim's
taxes. What penalty will he face for this action?
FACTS always comes first
1) Facts
2) Issue
3) Locate Relevant Authorities
4) Analyze Tax Authorities
5) Document and Communicate Results What comes first in the tax research process?
Treasury Regulations What is a primary source of administrative tax law in the United
States?
Legislative branch- statutory authority issue by Congress - Internal Revenue Code
Judicial branch - court rulings interpreting the IRC
Executive/Administrative branch - ruling handed down from administrative agencies.
Dept. of Treasury is an administrative agency, the IRS is a Bureau/Sub-Office of the
Treasury. They produce Treasury Regulations and IRS pronouncements). Primary Authorities
are official sources of the tax law. Primary sources can be broken down to:
C Corporation What is an example of a non-flow through entity?
Technical Advice Memorandum An IRS agent is in the field doing an audit. Not sure how to
handle an issue with a taxpayer payer, she would ask for?
2025/2026 Latest Update
1913 The 16th amendment established that congress has the power to lay and collect taxes
on incomes, from whatever source derived, without apportionment among the several States,
and without regard to any census or enumeration. The amendment was ratified in:
Progressive tax rate structure The U.S. Federal Income Tax System is:
Sufficiency Judging the _______________ of a tax system means assessing the amount of
the tax revenues it must generate to pay governmental expenditures.
6.2% What is the Old Age, Survivors, and Disability Insurance (OASDI) tax rate to an
employee?
Taxpayer must file by April 15 What is the filing date for an Individual taxpayer if he is out of
the country when his taxes are due?
$42,522
•$227,000 - $172,750 = $54,250 x 24%= $13,020
•$29,502 + $13,020 = $42,522 A married couple who file as married filing joint who do not
operate a business have earned $227,000 of taxable income last year. What is their tax liability?
•Gross Income
•Adjusted Gross Income
•Taxable Income Three types of income
Indefinite/never- fraudulent returns or failing to file a return John Jacob Jingleheimer
Schmicht filed a fraudulent return with the IRS trying to get a refund when he never really had a
job, what is the statue of limitation on this situation?
, Greater of $5,000 or 75% of income derived from preparing the taxpayer's tax return.
Sammy Shyster, CPA prepares taxes for Slim McGarett. He knowingly understates Slim's
taxes. What penalty will he face for this action?
FACTS always comes first
1) Facts
2) Issue
3) Locate Relevant Authorities
4) Analyze Tax Authorities
5) Document and Communicate Results What comes first in the tax research process?
Treasury Regulations What is a primary source of administrative tax law in the United
States?
Legislative branch- statutory authority issue by Congress - Internal Revenue Code
Judicial branch - court rulings interpreting the IRC
Executive/Administrative branch - ruling handed down from administrative agencies.
Dept. of Treasury is an administrative agency, the IRS is a Bureau/Sub-Office of the
Treasury. They produce Treasury Regulations and IRS pronouncements). Primary Authorities
are official sources of the tax law. Primary sources can be broken down to:
C Corporation What is an example of a non-flow through entity?
Technical Advice Memorandum An IRS agent is in the field doing an audit. Not sure how to
handle an issue with a taxpayer payer, she would ask for?
