W1 Introduction to Tax Policy and Tax Law

Which of the following taxes make up the largest portion of the government's tax revenue?

Individual income taxes
Corporate income taxes
Sales taxes
Estate taxes

Individual income taxes

A taxpayer may go to prison for________

tax avoidance.
Any of the above.
tax planning.
tax evasion.

tax evasion.

The federal government's power to tax is derived from:

The 16th Amendment to the U.S. Constitution
The Internal Revenue Code of 1939
The Internal Revenue Code of 1954
The Revenue Act of 1913

The 16th Amendment to the U.S. Constitution

The highest marginal tax bracket under Pres. Reagan was:

69.13%
70%
50%
31%

69.13%

The most important taxes on consumption are:

Consumer taxes
Sales taxes
Both sales taxes and excise taxes
Excise taxes

Both sales taxes and excise taxes

An income tax system where your tax rate decreases as your income increases is known as:

a progressive tax system
a linear tax system
a regressive tax system
a flat tax system

a regressive tax system

Suppose Government Y imposes a 10% excise tax on the sale of cigarettes. Which is the "tax base" in this scenario?

The consumption of cigarettes
The sales price of cigarettes sold
The areas of the population with the highest incidence of smoking
The number of smokers

The sales price of cigarettes sold

Flo pays taxes of $3,000 on a $15,000 tax base and Larry pays taxes of $5,000 on a $20,000 tax base. The tax structure is best described as:

retroactive
regressive
proportional
progressive

progressive

Nick pays a tax of $15,000 on a tax base of $60,000. If this tax is proportional, what would be the tax rate that Theresa would pay on a tax base of $100,000?

Exactly 25 percent
None of the above
More than 25 percent
Less than 25 percent

Exactly 25 percent

Treasury Regulation 25.2512-1 deals with:

Income taxes
Withholding taxes
Gift taxes
Excise taxes

Gift taxes

James lost his tax case in a jury trial in the U.S. District Court. Which one of the following statements is correct?

He can appeal to the U.S. Supreme Court.
He can appeal to the U.S. Court of Appeals in his circuit.
He can appeal to the U.S. tax court.
He has no appeal because he lost in the jury trial.

He can appeal to the U.S. Court of Appeals in his circuit.

There are three multiple types of Treasury Regulations. Mark all that apply.

Procedural
Tentative
Regulatory
Jurisprudential
Legislative
Interpretative

Procedural
Legislative
Interpretative

From which court is there no appeal?
The Tax Court
The Court of Appeals
The U.S. Supreme Court
The District Court

The U.S. Supreme Court

Which of the following is the highest legal authority in income tax?

Revenue rulings
IRS technical advice memoranda
IRS publications
Sections of the Internal Revenue Code

Sections of the Internal Revenue Code

Which of the following are Primary Authoritative Sources? Mark all that apply.

Internal Revenue Code
Tax Textbooks
U.S. Constitution
Journal of Accountancy
Treasury Regulations
Journal of Taxation

Internal Revenue Code
U.S. Constitution
Treasury Regulations

Connor failed to pay $8,000 of income tax due with his return, which was timely filed on April 15th. He waited for 2 months after April 15th to pay the tax. How much will his failure-to-pay penalty be?

$0
$2,000
$800
$80

$80