WGU C237 TAXATION | PRE-ASSESSMENT |
ACCURATE AND VERIFIED | 2026 UPDATE
What year was the U.S. income tax on individuals permanently established?
A. 1861
B. 1894
C. 1913
D. 1924 - Answers - C. 1913
What is the second-highest level of legislative authority of tax law in the United States?
A. American Institute of Certified Public Accountants (AICPA)
B. Journal of Taxation
C. Revenue procedures
D. Internal Revenue Code - Answers - D. Internal Revenue Code
In which publications does the IRS provide information on the tax consequences of
specific transactions encountered in practice?
A. Technical advice memoranda
B. Information releases
C. Revenue rulings
D. Official announcements - Answers - C. Revenue rulings
What is an example of equity when evaluating a tax system?
A. Each taxpayer can choose the due date for their tax.
B. Each taxpayer pays a different amount based on their income level.
C. Individuals have designated amounts withheld from each paycheck.
D. Individuals may take a standard deduction to reduce record keeping. - Answers - B.
Each taxpayer pays a different amount based on their income level.
What is true about horizontal equity?
A. Taxpayers with a greater ability to pay tax paying more tax
B. Two taxpayers in similar situations paying the same tax
C. Taxpayers with a lesser ability to pay tax paying more tax
D. Horizontal equity does not exist in a federal tax structure. - Answers - B. Two
taxpayers in similar situations paying the same tax
What is the nature of a progressive tax rate structure?
A. Each taxpayer devotes the same percentage of income to pay the tax.
, B. Lower-income taxpayers devote a greater percentage of income to pay the tax
relative to higher-income individuals.
C. The rate of tax increases as the tax base increases.
D. The rate of tax decreases as the tax base increases. - Answers - C. The rate of tax
increases as the tax base increases.
Which tax rate structure is exemplified by the FICA portion of Social Security taxes?
A. Effective
B. Regressive
C. Progressive
D. Proportional - Answers - B. Regressive
An individual is salaried, is not operating a business, is divorced with one child living at
home, earned $93,000 in wages for 2021, and has $17,900 of itemized deductions.
What is this individual's tax liability?
A. $6,682
B. $10,620
C. $10,818
D. $14,889 - Answers - D. $14,889
Which tax is based on the value of an individual's real estate?
A. Property tax
B. Franchise tax
C. Federal estate tax
D. Wealth transfer tax - Answers - A. Property tax
Which entities are considered flow-through entities in the U.S. tax system?
A. Individual taxpayers
B. Religious associations
C. Regular C corporations
D. Limited liability partnerships - Answers - D. 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?
A. 3 years
B. 4 years
C. 5 years
D. 6 years - Answers - D. 6 years
ACCURATE AND VERIFIED | 2026 UPDATE
What year was the U.S. income tax on individuals permanently established?
A. 1861
B. 1894
C. 1913
D. 1924 - Answers - C. 1913
What is the second-highest level of legislative authority of tax law in the United States?
A. American Institute of Certified Public Accountants (AICPA)
B. Journal of Taxation
C. Revenue procedures
D. Internal Revenue Code - Answers - D. Internal Revenue Code
In which publications does the IRS provide information on the tax consequences of
specific transactions encountered in practice?
A. Technical advice memoranda
B. Information releases
C. Revenue rulings
D. Official announcements - Answers - C. Revenue rulings
What is an example of equity when evaluating a tax system?
A. Each taxpayer can choose the due date for their tax.
B. Each taxpayer pays a different amount based on their income level.
C. Individuals have designated amounts withheld from each paycheck.
D. Individuals may take a standard deduction to reduce record keeping. - Answers - B.
Each taxpayer pays a different amount based on their income level.
What is true about horizontal equity?
A. Taxpayers with a greater ability to pay tax paying more tax
B. Two taxpayers in similar situations paying the same tax
C. Taxpayers with a lesser ability to pay tax paying more tax
D. Horizontal equity does not exist in a federal tax structure. - Answers - B. Two
taxpayers in similar situations paying the same tax
What is the nature of a progressive tax rate structure?
A. Each taxpayer devotes the same percentage of income to pay the tax.
, B. Lower-income taxpayers devote a greater percentage of income to pay the tax
relative to higher-income individuals.
C. The rate of tax increases as the tax base increases.
D. The rate of tax decreases as the tax base increases. - Answers - C. The rate of tax
increases as the tax base increases.
Which tax rate structure is exemplified by the FICA portion of Social Security taxes?
A. Effective
B. Regressive
C. Progressive
D. Proportional - Answers - B. Regressive
An individual is salaried, is not operating a business, is divorced with one child living at
home, earned $93,000 in wages for 2021, and has $17,900 of itemized deductions.
What is this individual's tax liability?
A. $6,682
B. $10,620
C. $10,818
D. $14,889 - Answers - D. $14,889
Which tax is based on the value of an individual's real estate?
A. Property tax
B. Franchise tax
C. Federal estate tax
D. Wealth transfer tax - Answers - A. Property tax
Which entities are considered flow-through entities in the U.S. tax system?
A. Individual taxpayers
B. Religious associations
C. Regular C corporations
D. Limited liability partnerships - Answers - D. 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?
A. 3 years
B. 4 years
C. 5 years
D. 6 years - Answers - D. 6 years
