Test Bank for South-Western Federal Taxation 2025: Comprehensive 2025 48e Young | | Complete Chapters.
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Test Bank for South-Western Federal Taxation 2025: Comprehensive 2025 48e Young | | Complete Chapters.Test Bank for South-Western Federal Taxation 2025: Comprehensive 2025 48e Young | | Complete Chapters.Test Bank for South-Western Federal Taxation 2025: Comprehensive 2025 48e Young | | Complete Ch...
Test Bank for South-Western Federal Taxation 2025: Comprehensive 2025
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48eYoung r r
Chapter 01 2025 - Comprehensive
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Answers Included
✅
r
Indicate whether the statement is true or
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rfalse.
r r 1. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe
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part of taxpayers.
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True
False
r r 2. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) leviedtax
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rates from a low of 1% to a high of 6%.
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True
False
r r 3. Stealth taxes have the effect of generating additional taxes from all taxpayers.
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True
False
r r 4. If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.
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True
False
r r 5. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
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True
False
r r 6. The Federal estate and gift taxes are examples of progressive rate taxes.
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True
False
r r 7. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
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True
False
r r 8. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
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True
False
r r 9. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of
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excesscharitable contributions of a particular year to other years.
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True
False
r r 10. Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.
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True
False
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,Name: Class: Date: r
Chapter 01 2025 -
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Comprehensive
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r r 11. If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud
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isinvolved.
r r
True
False
r r 12. Two persons who live in the same state but in different counties may not be subject to the same general salestax
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rate. r
True
False
r r 13. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at thesame
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rate. r
True
False
r r 14. Various tax provisions encourage the creation of certain types of retirement plans. Such provisions can
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bejustified on both economic and social grounds.
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True
False
r r 15. A parent employs her twin daughters, age 17, in her sole proprietorship. The daughters are not subject to
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FICAcoverage.
r r
True
False
r r 16. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on
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additional income tax assessments by the IRS.
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True
False
r r 17. Not all of the states that impose a general sales tax also have a use tax.
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True
False
r r 18. States impose either a state income tax or a general sales tax, but not both types of taxes.
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True
False
r r 19. The amount of the state excise taxes on gasoline varies from state to state.
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True
False
r r 20. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
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The 20% negligence penalty will apply to $25,000.
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True
False
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,Name: Class: Date: r
Chapter 01 2025 -
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Comprehensive
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r r 21. The annual exclusion, currently $18,000, is available for gift and estate tax purposes.
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True
False
r r 22. In preparing an income tax return, the use of a client’s estimates is not permitted.
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True
False
r r 23. The ratification of the Sixteenth Amendment to the U.S. Constitution was necessary to validate the Federal
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income tax on corporations.
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True
False
r r 24. A major advantage of a flat tax type of income tax is its simplicity.
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True
False
r r 25. The value added tax (VAT) has not had wide acceptance in the international community.
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True
False
r r 26. An inheritance tax is a tax on a decedent’s right to pass property at death.
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True
False
r r 27. The civil fraud penalty can entail large fines and possible incarceration.
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True
False
r r 28. The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax
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onbusiness use personalty.
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True
False
r r 29. A state income tax can be imposed on nonresident taxpayers who earn income within the state on an itinerant
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basis.r
True
False
r r 30. In preparing a tax return, all questions on the return must be answered.
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True
False
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, Name: Class: Date: r
Chapter 01 2025 -
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Comprehensive
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r r 31. For individual taxpayers, the interest rate for income tax refunds (overpayments) is the same as that applicableto
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assessments (underpayments).
r r
True
False
r r 32. During any month in which both the failure to file penalty and the failure to pay penalty apply, the failure to filepenalty
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is increased by the amount of the failure to pay penalty.
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True
False
r r 33. In 2024, José, a widower, sells land (fair market value of $100,000) to his daughter, Linda, for $50,000. José has not
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made a taxable gift.
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True
False
r r 34. Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These
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changesshould affect the amount of ad valorem property taxes levied on the properties.
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True
False
r r 35. If an income tax return is not filed by a taxpayer, there is no statute of limitations on assessments of tax by theIRS.
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True
False
r r 36. No state may offer an income tax amnesty program more than once.
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True
False
r r 37. When a state decouples from a Federal tax provision, it means that this provision will not apply for state incometax
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purposes.
r
True
False
r r 38. The Medicare component of the FICA tax (1.45% on wages) is progressive as the tax due increases as wages
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increase.
r
True
False
r r 39. The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither progressive
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orregressive).
r r
True
False
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