WGU C237 Taxation I UPDATED Exam Questions and CORRECT Answers

WGU C237 Taxation I UPDATED Exam
Questions and CORRECT Answers
Describe the history of taxation in the US - CORRECT ANSWER - 1861 - to finance civil
war
1894 - Income tax reinstated but ruled unconstitutional 1895
1913 - 16th amendment
1940 - WWII mass tax
1943 - pay as you go withholding
1986 - Internal Revenue Code


Identify the sources of tax law - CORRECT ANSWER - Legislative Branch
- Internal Revenue Code (Top)
- Congressional Committee Reports
Executive
- Income Tax Regulations
- Revenue Rulings
- Revenue Procedures
- Letter Rulings
Judicial
- Court Decisions


Describe the criteria of an equitable tax structure - CORRECT ANSWER - Equity -
equality
Certainty - Stability and certainty of amount of taxes
Convenience - no burden of records and compliance
Economy- minimal compliance and administrative costs
Simplicity - understandability

, Describe the structure of individual income tax rates - CORRECT ANSWER - Progressive
- tax increases as tax base increases
Proportional - flat tax
Regressive - decreases as tax base increases


Calculate an individuals federal income tax from his or her taxable income - CORRECT
ANSWER - Total Income
- Exclusions
= Gross income
- Deductions
- Exemptions
= Taxable income
X tax rate
= Income tax before credits
- Tax Credits
= Total tax liabilty
- Prepayments
=Bal due or refund


Distinguish between various types of taxes - CORRECT ANSWER - State Tax
Local Income
Franchise Tax
Wealth transfer tax
Gift tax
Federal Estate tax
Property tax
Federal excise tax - customs
Sales Tax