,Test Bank For HR, 5th Edition
Chapter 1 Understanding and Working with the Federal Tax Law
Chapter 1 Understanding and Working with the Federal Tax Law
1. Because the law is complicated, most individual taxpayers are no
Because the law is complicated, most individual taxpayers are not able
to complete their Federal income tax returns without outside
assistance.
*a. True
b. False
2. The ratification of the Sixteenth Amendment to the U.S. Constitu
The ratification of the Sixteenth Amendment to the U.S. Constitution
was necessary to validate the Federal income tax on corporations.
a. True
*b. False
3. Before the Sixteenth Amendment to the Constitution was ratified,
Before the Sixteenth Amendment to the Constitution was ratified, there
was no valid Federal income tax on individuals.
a. True
*b. False
4. The first income tax on individuals (after the ratification of t
The first income tax on individuals (after the ratification of the
Sixteenth Amendment to the Constitution) levied tax rates from a low of
2% to a high of 6%.
*a. True
b. False
5. The Federal income tax on individuals generates more revenue tha
The Federal income tax on individuals generates more revenue than the
Federal income tax on corporations.
*a. True
b. False
6. The pay-as-you-go feature of the Federal income tax on individua
The pay-as-you-go feature of the Federal income tax on individuals
conforms to Adam Smith’s canon (principle) of certainty.
a. True
*b. False
7. The FICA tax (Medicare component) on wages is progressive since
The FICA tax (Medicare component) on wages is progressive since the tax
due increases as wages increase.
1
,Test Bank For HR, 5th Edition
Chapter 1 Understanding and Working with the Federal Tax Law
a. True
*b. False
8. The Federal estate and gift taxes are examples of progressive ta
The Federal estate and gift taxes are examples of progressive taxes.
*a. True
b. False
9. The Federal excise tax on cigarettes is an example of a proporti
The Federal excise tax on cigarettes is an example of a proportional
tax.
*a. True
b. False
10. Currently, the Federal corporate income tax is less progressive
Currently, the Federal corporate income tax is less progressive
than the individual income tax.
*a. True
b. False
11. Mona inherits her mother's personal residence, which she convert
Mona inherits her mother’s personal residence, which she converts to a
furnished rental house. These changes should affect the amount of ad
valorem property taxes levied on the properties.
*a. True
b. False
12. A fixture will be subject to the ad valorem tax on personalty ra
A fixture will be subject to the ad valorem tax on personalty rather
than the ad valorem tax on realty.
a. True
*b. False
13. Even if property tax rates are not changed, the amount of ad val
Even if property tax rates are not changed, the amount of ad valorem
taxes imposed on realty may not remain the same.
*a. True
b. False
2
, Test Bank For HR, 5th Edition
Chapter 1 Understanding and Working with the Federal Tax Law
14. The ad valorem tax on personal use personalty is more often avoi
The ad valorem tax on personal use personalty is more often avoided by
taxpayers than the ad valorem tax on business use personalty.
*a. True
b. False
15. An excise tax is often used to try to influence behavior.
An excise tax is often used to try to influence behavior.
*a. True
b. False
16. There is a Federal excise tax on hotel occupancy....
There is a Federal excise tax on hotel occupancy.
a. True
*b. False
17. The Federal gas-guzzler tax applies only to automobiles manufact
The Federal gas-guzzler tax applies only to automobiles manufactured
overseas and imported into the United States.
a. True
*b. False
18. Like the Federal counterpart, the amount of the state excise tax
Like the Federal counterpart, the amount of the state excise taxes on
gasoline varies from state to state.
a. True
*b. False
19. Not all of the states that impose a general sales tax also have
Not all of the states that impose a general sales tax also have a use
tax.
a. True
*b. False
20. Sales made by mail order are not exempt from the application of
Sales made by mail order are not exempt from the application of a
general sales (or use) tax.
*a. True
b. False
3
Chapter 1 Understanding and Working with the Federal Tax Law
Chapter 1 Understanding and Working with the Federal Tax Law
1. Because the law is complicated, most individual taxpayers are no
Because the law is complicated, most individual taxpayers are not able
to complete their Federal income tax returns without outside
assistance.
*a. True
b. False
2. The ratification of the Sixteenth Amendment to the U.S. Constitu
The ratification of the Sixteenth Amendment to the U.S. Constitution
was necessary to validate the Federal income tax on corporations.
a. True
*b. False
3. Before the Sixteenth Amendment to the Constitution was ratified,
Before the Sixteenth Amendment to the Constitution was ratified, there
was no valid Federal income tax on individuals.
a. True
*b. False
4. The first income tax on individuals (after the ratification of t
The first income tax on individuals (after the ratification of the
Sixteenth Amendment to the Constitution) levied tax rates from a low of
2% to a high of 6%.
*a. True
b. False
5. The Federal income tax on individuals generates more revenue tha
The Federal income tax on individuals generates more revenue than the
Federal income tax on corporations.
*a. True
b. False
6. The pay-as-you-go feature of the Federal income tax on individua
The pay-as-you-go feature of the Federal income tax on individuals
conforms to Adam Smith’s canon (principle) of certainty.
a. True
*b. False
7. The FICA tax (Medicare component) on wages is progressive since
The FICA tax (Medicare component) on wages is progressive since the tax
due increases as wages increase.
1
,Test Bank For HR, 5th Edition
Chapter 1 Understanding and Working with the Federal Tax Law
a. True
*b. False
8. The Federal estate and gift taxes are examples of progressive ta
The Federal estate and gift taxes are examples of progressive taxes.
*a. True
b. False
9. The Federal excise tax on cigarettes is an example of a proporti
The Federal excise tax on cigarettes is an example of a proportional
tax.
*a. True
b. False
10. Currently, the Federal corporate income tax is less progressive
Currently, the Federal corporate income tax is less progressive
than the individual income tax.
*a. True
b. False
11. Mona inherits her mother's personal residence, which she convert
Mona inherits her mother’s personal residence, which she converts to a
furnished rental house. These changes should affect the amount of ad
valorem property taxes levied on the properties.
*a. True
b. False
12. A fixture will be subject to the ad valorem tax on personalty ra
A fixture will be subject to the ad valorem tax on personalty rather
than the ad valorem tax on realty.
a. True
*b. False
13. Even if property tax rates are not changed, the amount of ad val
Even if property tax rates are not changed, the amount of ad valorem
taxes imposed on realty may not remain the same.
*a. True
b. False
2
, Test Bank For HR, 5th Edition
Chapter 1 Understanding and Working with the Federal Tax Law
14. The ad valorem tax on personal use personalty is more often avoi
The ad valorem tax on personal use personalty is more often avoided by
taxpayers than the ad valorem tax on business use personalty.
*a. True
b. False
15. An excise tax is often used to try to influence behavior.
An excise tax is often used to try to influence behavior.
*a. True
b. False
16. There is a Federal excise tax on hotel occupancy....
There is a Federal excise tax on hotel occupancy.
a. True
*b. False
17. The Federal gas-guzzler tax applies only to automobiles manufact
The Federal gas-guzzler tax applies only to automobiles manufactured
overseas and imported into the United States.
a. True
*b. False
18. Like the Federal counterpart, the amount of the state excise tax
Like the Federal counterpart, the amount of the state excise taxes on
gasoline varies from state to state.
a. True
*b. False
19. Not all of the states that impose a general sales tax also have
Not all of the states that impose a general sales tax also have a use
tax.
a. True
*b. False
20. Sales made by mail order are not exempt from the application of
Sales made by mail order are not exempt from the application of a
general sales (or use) tax.
*a. True
b. False
3
