Tax Chp. 3 Questions and verified
Answers
Regarding the taxing powers of the federal government, the U.S. Constitution requires that:
a. taxes imposed by Congress must apply uniformly throughout the United States
b. no direct taxes may be imposed on income
c. all revenues from the federal income tax must be apportioned to the population of the states from
which they were collected
d. all of these are correct - ANSWER-a. taxes imposed by Congress must apply uniformly throughout the
United States
Which of the following is an administrative source of the federal tax law issued by the IRS?
a. court rulings
b. Internal Revenue Code
c. tax treaties
d. revenue rulings
e. none of these are correct - ANSWER-d. revenue rulings
The first Internal Revenue Code was:
a. the Internal Revenue Code of 1939
b. the Internal Revenue Code of 1954
c. the Revenue Act of 1913
d. none of these are correct - ANSWER-a. the Internal Revenue Code of 1939
The first federal income tax law was passed as a result of the:
a. Civil War
b. Mexican-American War
c. Spanish-American War
d. none of these are correct - ANSWER-a. Civil War
A "tax protester" is:
a. a person who files a "frivolous" return with the IRS
b. a person who brings a "frivolous" matter before the Tax Court
c. a person who may be subject to a penalty for frivolous Tax Court petitions
, d. all of these are correct
e. none of these are correct
- ANSWER-d. all of these are correct
The overriding purpose of tax treaties is to:
a. create "tax havens"
b. minimize tax liability of multinational corporations
c. require business taxpayers to file returns in all countries in which they operate
d. eliminate the "double taxation" that a taxpayer would face if his or her income were subject to tax in
both countries - ANSWER-d. eliminate the "double taxation" that a taxpayer would face if his or her
income were subject to tax in both countries
Which of the following issues is NOT addressed by tax treaties?
a. what tax disclosures must be made by a visitor to a host country
b. treatment of business and investment income earned by a foreign visitor in the United States
c. treatment of business and investment income earned by a foreign citizen in his home country
d. how to compute the taxable amount in the host country - ANSWER-c. treatment of business and
investment income earned by a foreign citizen in his home country
Which of the following statements is INCORRECT regarding tax treaties?
a. They are authorized by the U.S. Constitution.
b. They are usually initiated by the State Department, not the Treasury.
c. The United States can have multiple types of tax treaties with one country.
d. All of these are correct. - ANSWER-b. They are usually initiated by the State Department, not the
Treasury.
P.L. 107-16 is the citation for:
a. the Conference report on the 16th public law enacted in the 107th Congress
b. the 16th public law enacted in the 107th Congress
c. a public law enacted by Congress but not signed by the President
d. none of these are correct - ANSWER-b. the 16th public law enacted in the 107th Congress
In the House of Representatives, tax law changes are primarily considered by:
a. the Finance Committee
Answers
Regarding the taxing powers of the federal government, the U.S. Constitution requires that:
a. taxes imposed by Congress must apply uniformly throughout the United States
b. no direct taxes may be imposed on income
c. all revenues from the federal income tax must be apportioned to the population of the states from
which they were collected
d. all of these are correct - ANSWER-a. taxes imposed by Congress must apply uniformly throughout the
United States
Which of the following is an administrative source of the federal tax law issued by the IRS?
a. court rulings
b. Internal Revenue Code
c. tax treaties
d. revenue rulings
e. none of these are correct - ANSWER-d. revenue rulings
The first Internal Revenue Code was:
a. the Internal Revenue Code of 1939
b. the Internal Revenue Code of 1954
c. the Revenue Act of 1913
d. none of these are correct - ANSWER-a. the Internal Revenue Code of 1939
The first federal income tax law was passed as a result of the:
a. Civil War
b. Mexican-American War
c. Spanish-American War
d. none of these are correct - ANSWER-a. Civil War
A "tax protester" is:
a. a person who files a "frivolous" return with the IRS
b. a person who brings a "frivolous" matter before the Tax Court
c. a person who may be subject to a penalty for frivolous Tax Court petitions
, d. all of these are correct
e. none of these are correct
- ANSWER-d. all of these are correct
The overriding purpose of tax treaties is to:
a. create "tax havens"
b. minimize tax liability of multinational corporations
c. require business taxpayers to file returns in all countries in which they operate
d. eliminate the "double taxation" that a taxpayer would face if his or her income were subject to tax in
both countries - ANSWER-d. eliminate the "double taxation" that a taxpayer would face if his or her
income were subject to tax in both countries
Which of the following issues is NOT addressed by tax treaties?
a. what tax disclosures must be made by a visitor to a host country
b. treatment of business and investment income earned by a foreign visitor in the United States
c. treatment of business and investment income earned by a foreign citizen in his home country
d. how to compute the taxable amount in the host country - ANSWER-c. treatment of business and
investment income earned by a foreign citizen in his home country
Which of the following statements is INCORRECT regarding tax treaties?
a. They are authorized by the U.S. Constitution.
b. They are usually initiated by the State Department, not the Treasury.
c. The United States can have multiple types of tax treaties with one country.
d. All of these are correct. - ANSWER-b. They are usually initiated by the State Department, not the
Treasury.
P.L. 107-16 is the citation for:
a. the Conference report on the 16th public law enacted in the 107th Congress
b. the 16th public law enacted in the 107th Congress
c. a public law enacted by Congress but not signed by the President
d. none of these are correct - ANSWER-b. the 16th public law enacted in the 107th Congress
In the House of Representatives, tax law changes are primarily considered by:
a. the Finance Committee
