1
Taxation C237 Questions with Correct
Answers | Updated (100% Correct Answers)
What year was the US income tax on individuals permanently
established? Answer: 1913
What is the second-highest level of legislative authority of tax law in
the United States? Answer: Internal Revenue Code
In which publications does the IRS provide information on the tax
consequences of specific transactions encountered in practice?
Answer: Revenue Rulings
How are tax systems evaluated in terms of equity? Answer: Each
taxpayer pays a different amount based on their income level
What is horizontal equity? Answer: When two taxpayers in similar
situations pay the same tax.
What is the nature of a progressive tax rate structure? Answer: The
rate of tax increases as the tax base increases.
Which tax rate structure is exemplified by the FICA portion of Social
Security taxes? Answer: Regressive
Which tax is based on the value of an individual's real estate?
Answer: Property tax
© 2025 All rights reserved
, 2
What entities are considered flow-through entities in the U.S. tax
system? Answer: Limited Liability Partnerships
A taxpayer fails to report income that exceeds 25% of reported
gross income but files the return on time. How many years after a
return was originally due might the statute of limitations expire?
Answer: 6 years
Which component of a tax practice focuses on minimizing taxes
paid and maximizing after-tax cash flows while accommodating
clients' other desires? Answer: Tax planning
Which court's cases take precedence over all other court decisions?
Answer: U.S. Supreme Court
Which item is a source of tax law from the judicial branch of
government? Answer: Court decisions
Which item is a legislative source of tax law? Answer: Internal
Revenue Code
What describes the authoritative weight carried by treasure
regulations? Answer: They have the highest authoritative weight of
the administrative sources.
Which tax term defines a personal expenditure, such as charitable
contributions and medical expenses, which taxpayers may claim if
they keep records? Answer: Itemized deductions
© 2025 All rights reserved
Taxation C237 Questions with Correct
Answers | Updated (100% Correct Answers)
What year was the US income tax on individuals permanently
established? Answer: 1913
What is the second-highest level of legislative authority of tax law in
the United States? Answer: Internal Revenue Code
In which publications does the IRS provide information on the tax
consequences of specific transactions encountered in practice?
Answer: Revenue Rulings
How are tax systems evaluated in terms of equity? Answer: Each
taxpayer pays a different amount based on their income level
What is horizontal equity? Answer: When two taxpayers in similar
situations pay the same tax.
What is the nature of a progressive tax rate structure? Answer: The
rate of tax increases as the tax base increases.
Which tax rate structure is exemplified by the FICA portion of Social
Security taxes? Answer: Regressive
Which tax is based on the value of an individual's real estate?
Answer: Property tax
© 2025 All rights reserved
, 2
What entities are considered flow-through entities in the U.S. tax
system? Answer: Limited Liability Partnerships
A taxpayer fails to report income that exceeds 25% of reported
gross income but files the return on time. How many years after a
return was originally due might the statute of limitations expire?
Answer: 6 years
Which component of a tax practice focuses on minimizing taxes
paid and maximizing after-tax cash flows while accommodating
clients' other desires? Answer: Tax planning
Which court's cases take precedence over all other court decisions?
Answer: U.S. Supreme Court
Which item is a source of tax law from the judicial branch of
government? Answer: Court decisions
Which item is a legislative source of tax law? Answer: Internal
Revenue Code
What describes the authoritative weight carried by treasure
regulations? Answer: They have the highest authoritative weight of
the administrative sources.
Which tax term defines a personal expenditure, such as charitable
contributions and medical expenses, which taxpayers may claim if
they keep records? Answer: Itemized deductions
© 2025 All rights reserved
