SOUTH WESTERN FEDERAL TAXATION
COMPREHENSIVE EXAMINATION TEST
FULL QUESTIONS AND CORRECT ANSWERS
VERIFIED COMPLETE SOLUTION
●● A system whereby income taxes are withheld systematically from
current wages can be referred to as a "pay-as-you-go" system.
Answer: True
●● An equitable tax system is a fair tax system.
Answer: True
●● Since 1980, the group of taxpayers whose tax burden has increased
the most is
Answer: Individuals
●● Revenue legislation begins in the Senate
Answer: False
●● Tax avoidance can be the sole business purpose for a transaction
Answer: False
,●● Tax avoidance is discouraged as being anti-American.
Answer: False: Perfectly legal and encourage by our society
●● What notion recognizes that mere appreciation in value does not
necessarily mean that the owner has the resources to pay the tax
associated with the appreciation:
Answer: wherewithal-to-pay concept
●● The ultimate source of power to tax resides with the
Answer: Constitution
●● The rate of tax that a taxpayer pays on the last dollar of income is
known as
Answer: the marginal tax rate
●● The most popular form of doing business in the United States is
Answer: Single proprietorship
●● The doctrine of separation of powers refers to the relationship
between the Internal Revenue Service and the Treasury Department.
Answer: False
●● The current tax system can be classified as "pay-as-you-go."
, Answer: True
●● The Sixteenth Amendment to the U.S. Constitution affects
Answer: direct taxes
●● The Revenue Reconciliation Act of 1998 imposed the following
Answer: Lowered the holding period for long-term capital gains from 18
to 12 months
●● Tax avoidance should be at the top of every taxpayer's list for tax
planning
Answer: True
●● Another name for a flat tax is a progressive tax
Answer: False- a flat tax is a proportional tax
●● Flow-through entities do not pay tax on taxable income, so it is not
necessary for them to keep track of their gross income.
Answer: False
●● "Closed Fact" tax research relates to the various procedures involved
in "before-the-facts planning" situations
COMPREHENSIVE EXAMINATION TEST
FULL QUESTIONS AND CORRECT ANSWERS
VERIFIED COMPLETE SOLUTION
●● A system whereby income taxes are withheld systematically from
current wages can be referred to as a "pay-as-you-go" system.
Answer: True
●● An equitable tax system is a fair tax system.
Answer: True
●● Since 1980, the group of taxpayers whose tax burden has increased
the most is
Answer: Individuals
●● Revenue legislation begins in the Senate
Answer: False
●● Tax avoidance can be the sole business purpose for a transaction
Answer: False
,●● Tax avoidance is discouraged as being anti-American.
Answer: False: Perfectly legal and encourage by our society
●● What notion recognizes that mere appreciation in value does not
necessarily mean that the owner has the resources to pay the tax
associated with the appreciation:
Answer: wherewithal-to-pay concept
●● The ultimate source of power to tax resides with the
Answer: Constitution
●● The rate of tax that a taxpayer pays on the last dollar of income is
known as
Answer: the marginal tax rate
●● The most popular form of doing business in the United States is
Answer: Single proprietorship
●● The doctrine of separation of powers refers to the relationship
between the Internal Revenue Service and the Treasury Department.
Answer: False
●● The current tax system can be classified as "pay-as-you-go."
, Answer: True
●● The Sixteenth Amendment to the U.S. Constitution affects
Answer: direct taxes
●● The Revenue Reconciliation Act of 1998 imposed the following
Answer: Lowered the holding period for long-term capital gains from 18
to 12 months
●● Tax avoidance should be at the top of every taxpayer's list for tax
planning
Answer: True
●● Another name for a flat tax is a progressive tax
Answer: False- a flat tax is a proportional tax
●● Flow-through entities do not pay tax on taxable income, so it is not
necessary for them to keep track of their gross income.
Answer: False
●● "Closed Fact" tax research relates to the various procedures involved
in "before-the-facts planning" situations
