South-Western Federal Taxation 2027: Comprehensive
James C. Young, Mark Persellin, Annette Nellen
TEST BANK
What's Included?
✔ Complete Chapter-by-Chapter Test Bank (Chapters 1–30)
✔ 4038 Questions with Verified Answers
✔ Multiple Choice Questions (MCQs) with answer keys - all chapters
✔ True/False questions, including correct-the-statement items
✔ Short Answer, Essay & Computational (tax calculation)
problems with solutions
✔ Covers individuals, corporations, partnerships, estates & trusts
✔ 2027 Edition | Updated for current tax law — Instant PDF Download
,Chap 01 2027 - Comprehensive
Indicate whether the statement is true or false.
1. When interest is charged on a deficiency, any part of a month counts as a full month.
a. True
b. False
ANSWER: False
2. 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
ANSWER: False
3. 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
ANSWER: True
4. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
a. True
b. False
ANSWER: False
5. Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.
a. True
b. False
ANSWER: False
6. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the
property, a gain results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to
the application of the wherewithal to pay concept.
a. True
b. False
ANSWER: True
7. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
a. True
b. False
ANSWER: True
Page 1
,Name: Class: Date:
Chap 01 2027 - Comprehensive
8. The formula for the Federal income tax on corporations is the same as that applicable to individuals.
a. True
b. False
ANSWER: False
9. Currently, the Federal corporate income tax is less progressive than the individual income tax.
a. True
b. False
ANSWER: True
10. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on
the part of taxpayers.
a. True
b. False
ANSWER: False
11. For Federal income tax purposes, there never has been a general amnesty period.
a. True
b. False
ANSWER: True
12. For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicable
to assessments (underpayments).
a. True
b. False
ANSWER: True
13. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess
charitable contributions of a particular year to other years.
a. True
b. False
ANSWER: True
14. When a state decouples from a Federal tax provision, it means that this provision will not apply for state income
tax purposes.
a. True
b. False
ANSWER: True
Page 2
, Name: Class: Date:
Chap 01 2027 - Comprehensive
15. There is a Federal excise tax on hotel occupancy.
a. True
b. False
ANSWER: False
16. A major advantage of a flat tax type of income tax is its simplicity.
a. True
b. False
ANSWER: True
17. A provision in the law that compels accrual basis taxpayers to pay a tax on prepaid income in the year received
and not when earned is consistent with generally accepted accounting principles.
a. True
b. False
ANSWER: False
18. In preparing an income tax return, the use of a client’s estimates is not permitted.
a. True
b. False
ANSWER: False
19. The amount of the state excise taxes on gasoline varies from state to state.
a. True
b. False
ANSWER: True
20. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
a. True
b. False
ANSWER: False
21. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
a. True
b. False
ANSWER: True
22. States impose either a state income tax or a general sales tax, but not both types of taxes.
a. True
b. False
ANSWER: False
Page 3
James C. Young, Mark Persellin, Annette Nellen
TEST BANK
What's Included?
✔ Complete Chapter-by-Chapter Test Bank (Chapters 1–30)
✔ 4038 Questions with Verified Answers
✔ Multiple Choice Questions (MCQs) with answer keys - all chapters
✔ True/False questions, including correct-the-statement items
✔ Short Answer, Essay & Computational (tax calculation)
problems with solutions
✔ Covers individuals, corporations, partnerships, estates & trusts
✔ 2027 Edition | Updated for current tax law — Instant PDF Download
,Chap 01 2027 - Comprehensive
Indicate whether the statement is true or false.
1. When interest is charged on a deficiency, any part of a month counts as a full month.
a. True
b. False
ANSWER: False
2. 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
ANSWER: False
3. 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
ANSWER: True
4. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
a. True
b. False
ANSWER: False
5. Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.
a. True
b. False
ANSWER: False
6. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the
property, a gain results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to
the application of the wherewithal to pay concept.
a. True
b. False
ANSWER: True
7. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
a. True
b. False
ANSWER: True
Page 1
,Name: Class: Date:
Chap 01 2027 - Comprehensive
8. The formula for the Federal income tax on corporations is the same as that applicable to individuals.
a. True
b. False
ANSWER: False
9. Currently, the Federal corporate income tax is less progressive than the individual income tax.
a. True
b. False
ANSWER: True
10. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on
the part of taxpayers.
a. True
b. False
ANSWER: False
11. For Federal income tax purposes, there never has been a general amnesty period.
a. True
b. False
ANSWER: True
12. For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicable
to assessments (underpayments).
a. True
b. False
ANSWER: True
13. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess
charitable contributions of a particular year to other years.
a. True
b. False
ANSWER: True
14. When a state decouples from a Federal tax provision, it means that this provision will not apply for state income
tax purposes.
a. True
b. False
ANSWER: True
Page 2
, Name: Class: Date:
Chap 01 2027 - Comprehensive
15. There is a Federal excise tax on hotel occupancy.
a. True
b. False
ANSWER: False
16. A major advantage of a flat tax type of income tax is its simplicity.
a. True
b. False
ANSWER: True
17. A provision in the law that compels accrual basis taxpayers to pay a tax on prepaid income in the year received
and not when earned is consistent with generally accepted accounting principles.
a. True
b. False
ANSWER: False
18. In preparing an income tax return, the use of a client’s estimates is not permitted.
a. True
b. False
ANSWER: False
19. The amount of the state excise taxes on gasoline varies from state to state.
a. True
b. False
ANSWER: True
20. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
a. True
b. False
ANSWER: False
21. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
a. True
b. False
ANSWER: True
22. States impose either a state income tax or a general sales tax, but not both types of taxes.
a. True
b. False
ANSWER: False
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