Final Exam Study Guide.docx - Final Exam Study Guide Week 1 Question 1 6 6 pts(TCO A Which is not a source of federal revenue Income taxes on

Final Exam Study Guide Week 1 Question 1 6 / 6 pts (TCO A) Which is not a source of federal revenue? Income taxes on Corporations Library Tax FICA taxes Estate and Gift Taxes Types of federal taxes include (1) income taxes on corporations, individuals, and fiduciaries, (2) employment taxes, (3) estate and gift taxes, and (4) excise and customs taxes. Also, revenues are generated from state and local taxes (Chapter 1). Question 2 6 / 6 pts (TCO A) The 16th Amendment to the Constitution allows for what? Assessing tax on the value of a decedent’s estate Correct! Assessing income tax Apportioning income Claiming tax deductions The Sixteenth Amendment (Amendment XVI) to the United States Constitution allows the Congress to levy an income tax without

apportioning it among the states or basing it on the United States Census (Chapter 1). Question 3 6 / 6 pts (TCO A) Which one of the following represents a fraudulent act under the IRC? Completing your Form W-4 improperly Correct! Understatement of Income Claiming too many dependent exemptions on y our W-4 Not changing your legal name to your married name. The most common badges of fraud are: (1) Understatement of income, (2) Claiming fictitious or improper deductions, (3) Accounting irregularities, (4) Allocation of income to related taxpayers in lower income tax brackets, (5) Acts and conduct of the taxpayer, e.g., false statements (Chapter 1). Question 4 6 / 6 pts (TCO A) Which reference material is classified as a primary “authoritative” source? Publication 19 Federal Tax Handbook Internal Revenue Service Correct! Internal Revenue Code

Primary source materials include the Internal Revenue Code (Statutory Authority), Treasury Regulations and Internal Revenue Service Rulings (Administrative Authority), and the various decisions of the trial courts and the appellate courts (Judicial Authority) (Chapter 2). Question 5 6 / 6 pts (TCO A) Which is NOT a component of the Common Body of Tax Law: Correct! Presidential Veto Constitutional Authority Judicial Authority Administrative Authority The Common Body of Tax Law (CBOTL) is an amalgamation of (1) Constitutional, (2) legislative, (3) administrative, and (4) judicial authorities (Chapter 2). Question 6 6 / 6 pts (TCO B) What is the first step in calculating federal taxable income? Correct! Identification of Gross Income Identification of Taxpayer’s Age Identification of Residency

Identification of Marital Status Gross Income is the first component of the Tax Formula (Chapter 3), subtract above the line deductions from Gross Income to reach AGI. Subtract the greater of the standard or itemized deductions from AGI. Subtract personal and dependency exemptions to reach taxable income. Question 7 6 / 6 pts (TCO B) Which of the following represents an “above the line” deductions?