ACC 307 Tax Law complete Test Bank.

1. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Que
Many states have balanced budgets because laws or constitutional amendments preclude
deficit spending.

*a. True
b. False


2. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 2
The U.S. Federal government has a provision in the Constitution which precludes deficit
spending.

a. True
*b. False


3. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 3
Revenue-neutral tax laws reduce deficits.

a. True
*b. False


4. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 4
Longer class lives for depreciable property and the required use of straight-line method
of depreciation should dampen the tax incentive for purchasing capital assets.

*a. True
b. False


5. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 5
The Internal Revenue Code is a compilation of Federal tax legislation that appears in
Title 28 of the Internal Revenue Code.

a. True
*b. False


6. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 6

,Income from patents can qualify for capital gain treatment.

*a. True
b. False


7. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 7
Saving leads to capital formation and thus makes funds available to finance home
construction and industrial expansion.

*a. True
b. False


8. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 8
The corporate tax rate of 34 percent applies only to taxable income in excess of $75,000.

*a. True
b. False


9. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q 9
The earned income tax credit is refundable.

*a. True
b. False


10. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q10
The deduction for charitable contributions can be explained by social considerations.

*a. True
b. False


11. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q11
The Hope scholarship credit can be explained by economic considerations.

a. True
*b. False

,12. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q12
The adoption tax credit can be explained by social considerations.

*a. True
b. False


13. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q13
Allowing a taxpayer to choose either a credit or a deduction for foreign taxes paid can be
explained by equity considerations.

*a. True
b. False


14. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q14
Neither the 1939 nor the 1954 Code substantially changed all the tax law existing on the
date of its enactment.

*a. True
b. False


15. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q15
Federal tax legislation generally originates in the Senate Finance Committee.

a. True
*b. False


16. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q16
Subchapter K refers to the “Partners and Partnerships” section of the Code.

*a. True
b. False


17. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q17
Subchapter C refers to the “Corporate Distributions and Adjustments” section of the

, Code.

*a. True
b. False


18. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q18
Some Regulations are arranged in different sequence than the Code.

a. True
*b. False


19. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q19
Proposed Regulations have the force and effect of law.

a. True
*b. False


20. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q20
Temporary Regulations have the same authoritative value as Finalized Regulations.

*a. True
b. False


21. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q21
Proposed Regulations are not published in the Federal Register.

a. True
*b. False


22. CHAPTER 1UNDERSTANDING AND WORKING WITH THE FEDERAL TAX
LAW Q22
Regulations are issued by the Treasury Department.

*a. True
b. False