After reinstatement of the individual federal income tax in 1894, why was the tax challenged in the
courts?
A. Revenue from taxes was no longer necessary because the Civil War was over.
B. Administration would be difficult since the tax was apportioned in proportion to state populations.
C. The...
Taxation I WGU - C237 , Exam Questions and answers, 100% Accurate . VERIFIED. After reinstatement of the individual federal income tax in 1894, why was the tax challenged in the courts? A. Revenue from taxes was no longer necessary because the Civil War was over. B. Administration would be difficult since the tax was apportioned in proportion to state populations. C. The preferred method of taxatio n was on business transactions as opposed to individual income tax. D. The U.S. Constitution failed to define the meaning of income which would arguably prevent consistent application of the law. - ✔✔-B. Administration would be difficult since the tax was apportioned in proportion to state populations. What is the highest level of legislative authority of tax law in the United States? A. American Institute of Certified Public Accountants B. Journal of Taxation C. Revenue procedures D. Internal Revenue Code - ✔✔-D. Internal Revenue Code What are two primary sources of tax law in the United States? Choose 2 answers A. Tax adviser B. Court decisions C. Revenue rulings D. CCH's Master Tax Guide - ✔✔-B. Court decisions C. Revenue ruli ngs What is a desirable characteristic when evaluating a tax system? A. Tax rules and regulations are changed frequently. B. Most tax returns are examined for accuracy by an IRS agent. C. Taxes are calculated on specialized software purchased from the IRS. D. Taxes can be estimated in advance if annual income remains the same. - ✔✔-D. Taxes can be estimated in advance if annual income remains the same. 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. - ✔✔-B. Each taxpayer pays a different amount based on their income level. What increases the tax base of an individual? A. College tuition B. Interest income C. Rent paid on a pers onal dwelling D. Property taxes on a personal dwelling - ✔✔-B. Interest income Which tax rate formula is the total tax liability divided by taxable income? A. Marginal tax rate B. Effective tax rate C. Average tax rate D. Progressive tax rate - ✔✔-C. Av erage tax rate An individual who has been divorced for two years earned $80,000 of taxable income last year. What is the individual's tax liability given the tax schedule above? A. $11,539 B. $11,588 C. $15,794 D. $15,926 - ✔✔-C. $15,794 Which tax is considered proportional? A. Excise tax B. Federal gift tax C. Employment tax D. Federal income tax - ✔✔-A. Excise tax Which two entities are typically considered flow -through entities in the U.S. tax system? Choose 2 answers A. Partnerships B. S corporations C. C corporations D. Individual taxpayers - ✔✔-A. Partnerships B. S corporations Which entities are subject to double taxation in the United States? A. Trusts B. Partnerships C. S corporations D. C corpor ations - ✔✔-D. C corporations 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 - ✔✔-D. 6 years
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