South-Western Federal Taxation 2022: Individual Income Taxes 45th edition by James C. Young Test ban

136. Wherewithal to pay concept
ANSWER:  a
 
137. Mitigation of the annual accounting period concept
ANSWER:  b
 
138. Tax on transfers at death (inheritance type)
ANSWER:  j
 
139. Excise tax on tobacco
ANSWER:  i
 
140. Use tax
ANSWER:  h
 
141. Income tax amnesty
ANSWER:  j
 
142. Import taxes (customs duties)
ANSWER:  k
 
143. “Pay as you go” (paygo)
ANSWER:  g
 
144. Export taxes
ANSWER:  l
 
Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations
b. Social considerations
c. Equity considerations
d. Both a. and b.
 
145. A tax credit for amounts spent to furnish care for children while the parent is at work.
ANSWER:  b
 
146. Additional depreciation deduction allowed for the year the asset is acquired.
ANSWER:  a
 
147. Tax brackets are increased for inflation.
ANSWER:  c
 
148. A small business corporation can elect to avoid the corporate income tax.
ANSWER:  a
 
149. A deduction for contributions by an employee to certain retirement plans.
ANSWER:  d
 
150. A deduction for qualified tuition paid to obtain higher education.
ANSWER:  d
 
151. A deduction for certain expenses (interest and taxes) incident to home ownership.
ANSWER:  d
 
152. A Federal deduction for state and local income taxes paid.
ANSWER:  c
 
153. A deduction for interest on student loans.
ANSWER:  d
 
154. A bribe to the local sheriff, although business related, is not deductible.
ANSWER:  b
 
155. Contributions to charitable organizations are deductible.
ANSWER:  b
 
156. A Federal deduction for state and local sales taxes paid.
ANSWER:  c
 
157. Tax credits available for the purchase of a vehicle that uses alternative (nonfossil) fuels.
ANSWER:  a
 
158. Tax credits for home improvements that conserve energy.
ANSWER:  a
 
159. More rapid expensing for tax purposes of the costs of installing pollution control devices.
ANSWER:  a
 
Match the statements that relate to each other. Note: Some choices may be used more than once.
a. Three years from date return is filed
b. Three years from due date of return
c. 20% of underpayment
d. 5% per month (25% limit)
e. 0.5% per month (25% limit)
f. Conducted at IRS office
g. Conducted at taxpayer’s office
h. Six years
i. 45-day grace period allowed to IRS
j. No statute of limitations (period remains open)
k. 75% of underpayment
l. No correct match provided
 
160. Office audit
ANSWER:  f
 
161. Field audit
ANSWER:  g
 
162. Failure to file penalty
ANSWER:  d
 
163. Failure to pay penalty
ANSWER:  e
 
164. Negligence penalty
ANSWER:  c
 
165. Criminal fraud penalty
ANSWER:  l
 
166. Fraud and statute of limitations
ANSWER:  j
 
167. Early filing and statute of limitations (deficiency situations)
ANSWER:  b
 
168. Late filing and statute limitations (deficiency situations)
ANSWER:  a
 
169. No return and statute limitations
ANSWER:  j
 
170. More than 25% gross income omission and statute of limitations
ANSWER:  h
 
171. Interest due on refund
ANSWER:  i
 
Subjective Short Answer
 
172. Taylor, a widow, makes cash gifts to her five married children (including their spouses) and to her seven grandchildren. What is the maximum amount Taylor can give for calendar year 2021 without using her unified transfer tax credit?
ANSWER:  $255,000 [$15,000 (annual exclusion) × 17 donees].
 
173. For the tax year 2020, Noah reported gross income of $300,000 on his timely filed Federal income tax return.
 
a.
​Presuming that the general rule applies, when does the statute of limitations on assessments normally expire?