FiCEP Final : CUNA Review Exam with Correct Answers

Select the statement that correctly describes a progressive tax. - Answers-A progressive tax requires people to pay more as they earn more. Pick the statement that best describes a regressive tax. - Answers-A regressive tax charges the same tax rate regardless of the taxpayer's income. Why are government fees and surcharges sometimes described as a form of tax? - Answers-Because they generate income for the government. Which taxing authorities are worthy of the member's attention? - Answers-The member must attend to all tax authorities at all levels of government to maintain their financial well-being. How do taxes impact your personal spending? - Answers-Taxes can make personal spending go up or down. Which is larger: the penalty for failing to pay federal income taxes on time, or the penalty for failing to file a tax return when taxes are owed? - Answers-The penalty for failing to file a tax return is significantly higher. What is the right attitude to take toward taxes to protect your financial well-being? - Answers-Taxes are an essential financial responsibility. When is the IRS most likely to impose the maximum penalty on taxpayers? - Answers-When they are forced to track down the taxpayer. What is a good rule to follow when dealing with a tax auditor or another issue involving the IRS? - Answers-Never assume the IRS is always correct. What is the financial counselor's role in aiding members with complex tax issues? - Answers-The counselor provides basic information and refers members to tax programs or tax experts. What happens when taxpayers who file a late return for any or all of the 4 most recent tax years are owed a refund? - Answers-No penalty is charged and the taxpayer gets the full refund amount. What tax services are provided by the Volunteer Income Tax Assistance (VITA) program? - Answers-Free tax return assistance to low- or moderate-income taxpayers.