INCOME TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS

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Chapter 1: General Principles and Concepts of Taxation

CHAPTER 1

GENERAL PRINCIPLES AND CONCEPTS OF TAXATION
Problem 1 – 1 TRUE OR FALSE 1. False – Without money provided by tax power, the other inherent powers cannot function well. 2. True 3. True 4. True 5. True 6. True 7. False – Taxation power is subject to inherent and Constitutional limitations. 8. False – Taxation power is not absolute because it is subject to limitations. 9. True 10. False – penalty is an example of imposition of amount for police power. 11. True 12. False – governmental function unless stated otherwise. 13. False – government agencies engaged in proprietory functions are subject tax unless stated otherwise. 14. True Problem 1 – 2 TRUE OR FALSE 1. False – Concurrence of the majority of congress. 2. False – Churches are required to pay income taxes in cases of sale of real property and business engagement. 3. False – No public funds shall be appropriated for religious purpose. 4. False - All bills even if approved by the 2/3 of the congress should still be signed by the President to become law. 5. False – No person shall be imprisoned for nonpayment of poll tax. 6. False – Taxation power is essentially legislative function; hence not every government unit exercises this power. 7. True 8. False - Benefits from taxation may be or may not be experienced. 9. True 10. False – Judicial review 11. False – “Ex post facto” law is not applicable for tax purposes. 12. True 13. False – A tax evader breaks the law while the tax avoider sidesteps it. 14. False – Neither transferable/assignable 15. True Problem 1 – 3 TRUE OR FALSE 1. True 2. True 3. True 4. True 5. False – prospective effect 6. True 7. True 8. False – national taxes 9. True 10. True

D 8. B 11. D 15. A 6. C 13. A 10. C 2. C 9. C 4. True True False – null and void Prob. B 6. D 3. B 7. A 2. C 10. A 14. C 11. D 4. C 9. D 6. A Prob. 13. D 14. A 14. C 13. D Prob. 1 – 8 1. D 2. B 5. C 12. C 8. C 7. A 8. 1 – 7 1. C 10. B 8. D 12. 12. A 2. B 8. C 9. A 11. C 12. A 7. D 5. A 3. D 8. C 11. B 7. D 6. B 6. D 7. C 16. B 10. B 9. A 5. C 10. C 6. A 5. B 13. 1 – 4 1. C 7. 1 – 9 1. B 12. C 9. C 4. C 9. C Prob. C 11. C . C 3. B 2. D Prob. B 10. D 3. 14. C 17. D 5. 1 – 6 1. D 5. 15.INCOME TAXATION 5th Edition (BY: VALENCIA & ROXAS) SUGGESTED ANSWERS 2 Chapter 1: General Principles and Concepts of Taxation 11. B 12. D 4. True False – Doubts must be resolved liberally in favor of the taxpayer. D Prob. D 4. C 3. B 3. B 13. A 15. 1 – 5 1. A 2. D 4.

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