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MOCK BAR EXAMINATION QUESTIONS IN TAXATION 1. Under RA 9010 the following will be subject to EVAT starting January 1 !

00" e#ce$t% a. b. c. d. &rofessionals actors actresses talent singers etc. 'an(s and non)ban( financial inter*ediaries +er,ices $erfor*ed as $rofessional athletes -abarets night clubs and racetrac(s

!. E#$ort of .ari(ina shoes is subject to% a. b. c. d. ". 1!/ VAT 0/ VAT E#e*$t +$ecific Ta#

Assess*ent is necessary in the following cases e#ce$t% a. b. c. d. before the $reli*inary in,estigation of a fraudulent ta# e,asion case could $ros$er to fi# the ta# liability of a ta#$ayer establish a case for judicial action for issuance of warrant of distraint or le,y

0.

The $rescri$ti,e $eriod for collection of ta#es is% a. 10 years fro* disco,ery of o*ission to file return falsity or fraud if there is no assess*ent b. " years fro* filing of return c. 1 years fro* release of assess*ent d. a and c are correct

1.

2*$ortation of auto*obiles is subject to% a. b. c. d. e. 3raduated Ad ,alore* ta# of !/ to 40/ VAT of 1!/ +$ecific ta# a and b E#e*$t

4.

The *anufacture and i*$ortation of the following for local consu*$tion are subject to e#cise ta# e#ce$t% a. b. c. d. alcohol $roducts tobacco $roducts cine*atogra$hic fil*s *ineral $roducts

5.

6o*estic sale of bagoong is% a. b. c. d. e. e#e*$t fro* VAT subject to 1!/ VAT if gross annual sales e#ceed &1.1. subject to 0/ VAT subject to "/ $ercentage ta# if e#e*$t fro* VAT b and d are correct

7.

The '2R co**issioner *ay888888888 $ay*ent of internal re,enue ta# when it a$$ears to be unjustly or e#cessi,ely assessed or that the ad*inistrati,e and collection costs in,ol,ed do not justify the collection thereof. a. co*$ro*ise

b. abate c. credit d. refund 9. 9o credit:refund of ta#es shall be allowed unless the ta#$ayer% a. b. c. d. 10. ;iles a written clai* for credit:refund with the '2R within ! years fro* $ay*ent &ays the ta# under $rotest A$$eals to the -TA A*ends his ta# return

Assess*ent is% a. b. c. d. A written notice of the ta# due 'ased on facts and not $resu*ed 6e*and for $ay*ent of the ta# within a $rescribed $eriod of ti*e All of the abo,e

11.

The following are re<uired to (ee$ boo(s of accounts e#ce$t% a. b. c. d. -or$orations and $artnershi$s &ersons engaged in trade or business in the &hili$$ines &ersons who earn $assi,e inco*e 9one of the abo,e

1!.

Re<uire*ents in order that retire*ent benefits *ay be e#e*$t fro* inco*e ta#% a. .ust be $aid to an e*$loyee who is at least 10 years old and has ser,ed his e*$loyer for at least 10 years b. E#e*$tion fro* ta#ation of retire*ent benefit *ust be a,ailed of only once c. The benefit *ust be recei,ed under an e#isting -ollecti,e 'argaining Agree*ent d. a and b only

1".

;or $ur$oses of the donor=s ta# the following are considered strangers% a. b. c. d. 'rother or sister whether whole or half)blood Relati,es by consanguinity in the collateral line within the 0th ci,il degree Relati,es by affinity e#ce$t the s$ouse of the donor 9one of the abo,e

10.

The s$ecial deductions fro* the gross estate are the following e#ce$t% a. b. c. d. Judicial e#$enses in testate or intestate $roceedings +tandard deduction ;a*ily ho*e u$ to &1 000 000 .edical E#$enses within one year fro* the death of the decedent not e#ceeding &100 000

11.

;uneral e#$enses that can be clai*ed as deduction fro* the gross estate should be% a. b. c. d. Actual a*ount incurred 9ot e#ceeding &!00 000 1/ of the gross estate The lowest of the abo,e figures

14.

The usual *odes of a,oiding the occurrence of double ta#ation are% a. b. c. d. Reci$rocal e#e*$tion either by law or treaty Ta# credit for foreign ta#es $aid 6eduction for foreign ta#es $aid All of the abo,e

15.

Jose is a law)abiding citi>en who $ays his real estate ta#es $ro*$tly. 6ue to a series of ty$hoons and ad,erse econo*ic conditions an ordinance is $assed by ?ue>on -ity granting a 10/ discount for $ay*ent of un$aid real estate ta#es for the $receding year and the condonation of all $enalties on fines resulting fro* the late $ay*ent. Arguing that the ordinance rewards delin<uent ta#$ayers and discri*inates against $ro*$t ones Jose de*ands that he be refunded an a*ount e<ui,alent to one)half of the real estate ta#es he $aid. The *unici$al attorney rendered an o$inion that Jose cannot be rei*bursed because the ordinance did not $ro,ide for such rei*burse*ent. Jose files suit to declare the ordinance ,oid on the ground that it is a class legislation. @ill his suit $ros$erA a. The suit will $ros$er because the ordinance is discri*inatory in character. b. The suit will $ros$er because the ordinance is not based on substantial distinction. c. The suit will not $ros$er because ta#es are the lifeblood of the go,ern*ent and should be collected without unnecessary hindrance. d. The suit will not $ros$er because the ordinance is based on substantial distinction. Each set of ta#es is a class by itself and the law would be o$en to attac( only if all the ta#$ayers belonging to one class were not treated ali(e. e. 9one of the abo,e

17.

@hich of the following state*ents are trueA a. Resident ;ili$ino citi>ens with inco*e fro* foreign sources only are allowed $ersonal and additional e#e*$tions b. 9on)resident aliens not engaged in trade:business in the &hili$$ines are not allowed any $ersonal e#e*$tions c. 9on)resident aliens engaged in trade:business in the &hili$$ines are allowed $ersonal e#e*$tions based on reci$rocity d. All of the abo,e

19.

The $eriodic decrease in the ,alue of a fi#ed asset due to wear and tear obsolescence or inade<uacy a. b. c. d. de$letion de$reciation ca$ital loss s$ecial loss

!0.

The following cases *ay not be co*$ro*ised% a. b. c. d. -ri*inal ta# fraud cases @ithholding ta# cases 6elin<uent accounts with duly a$$ro,ed schedule of $ay*ents All of the abo,e

!1.

-iting +ection 10 Article V222 of the 1975 -onstitution which $ro,ides that salaries of judges shall be fi#ed by law and that during their continuance in office their salary shall not be decreased a judge of a Regional Trial -ourt <uestioned the deduction of withholding ta#es fro* his salary since it results into a net deduction of his $ay. 2s the contention of the judge correctA a. 9o. The contention is incorrect because ta#es are enforced contributions. b. 9o. The contention is incorrect because ta#es *ust be collected in order to su$$ort the go,ern*ent. c. 9o. The contention is not correct because deduction of withholding ta#es is not a di*unition conte*$lated by the funda*ental law. d. 9o. The contention is incorrect because deduction of withholding ta#es is re<uired by law. e. 9one of the abo,e.

!!.

The following conditions shall be obser,ed when there is a net ca$ital loss carry o,er% a. The loss carried o,er is for a holding $eriod not e#ceeding 1! *onths b. The a*ount of the loss should not e#ceed the inco*e before e#e*$tions in the year when the loss was sustained c. The ta#$ayer should not be a cor$oration d. All of the abo,e

!".

@hat is the *ini*u* co*$ro*ise rate in cases of doubtful ,alidity of assess*entA a. b. c. d. 00/ of the basic assessed ta# 10/ of the basic assessed ta# 9o li*itation &1 000 000

!0.

@hich of the following VAT transactions are not considered >ero)ratedA a. b. c. d. E#$ort sales of goods 6o*estic sale of goods in the regular course of trade or business ;oreign currency deno*inated sale +ale of gold to 'ang(o +entral ng &ili$inas

!1.

'arbaran *unici$ality has an ordinance which re<uires that all stores restaurants and other establish*ents selling li<uor should $ay a fi#ed annual fee of &!0 000. +ubse<uently the *unici$al board $ro$osed an ordinance i*$osing a sales ta# e<ui,alent to 1/ of the a*ount $aid for the $urchase or consu*$tion of li<uor in stores restaurants and other establish*ents. The *unici$al *ayor refused to sign the ordinance on the ground that it would constitute double ta#ation. 2s the refusal of the *ayor justifiedA a. 9o. The refusal of the *ayor is unjustified because double ta#ation is allowed in our jurisdiction. b. 9o. The refusal of the *ayor is not justified because the i*$ositions are of different nature and character. c. 9o. The refusal of the *ayor is unjustified because it is not within his $ower. d. 9o. The refusal of the *ayor is not justified because double ta#ation will generate *ore re,enues. e. 9one of the abo,e.

!4.

This is a su**ary ad*inistrati,e re*edy sei>ure of real $ro$erty to enforce $ay*ent of ta# due% a. b. c. d. Be,y 6istraint ;orfeiture Ta# lien

!5.

@hich of the following cannot be considered as ta# a,oidanceA a. b. c. d. +$litting of donation +ur,i,orshi$ agree*ent Colding $eriod for ca$ital asset transactions 9one of the abo,e

!7.

Tony has inad,ertently o*itted &100 000 inco*e in his !000 2nco*e Ta# Return. U$on disco,ery in !001 the '2R issued an assess*ent for deficiency inco*e ta# for &100 000 $lus 10/ fraud surcharge. .eanwhile Tony included the o*itted &100 000 inco*e in his !001 2nco*e Ta# Return. @hat ad,ice will you gi,e TonyA a. A*end his !000 2nco*e Ta# return to reflect the correct a*ount of inco*e

b. &ay the assessed ta# $lus surcharge and thereafter as( for refund c. &rotest the assess*ent d. Any of the abo,e !9. Tino is engaged in buying and selling of fresh fruits at the ?).art and Aran<ue .ar(ets. Ce is also e#$orting canned and $reser,ed fruits to Ja$an. 2n !000 he *ade a gross sales of &! 000 000. Ce is liable for VAT registration fee of % a. b. c. d. "0. &100 &1 000 &1 100 E#e*$t

+hirley was allowed to deduct &!00 000 bad debts written off in !00" where she had a net inco*e before bad debts of &170 000 and a net loss of &!0 000. 29 !000 she was able to reco,er the bad debts written off in full. The bad debts reco,ery is% a. b. c. d. Ta#able to the e#tent of &170 000 Ta#able to the e#tent of &!0 000 Ta#able to the e#tent of &!00 000 9ot ta#able

"1.

A ta#$ayer who belie,es that a ta# ordinance is unconstitutional should a$$eal to% a. b. c. d. '2R -o**issioner .etro$olitan Trial -ourt -ourt of Ta# A$$eals +ecretary of Justice

"!.

Any of the following conditions should be *et to enable the &resident to increase the VAT fro* 10/ to 1!/ starting January 1 !004% a. VAT collection to 3ross 6o*estic &roduct in the $re,ious year e#ceeds ! 0:1/ b. 9ational 3o,ern*ent 6eficit to 3ross 6o*estic &roduct in the $re,ious year e#ceeds 1 D / c. VAT ta# effort to 3ross 9ational &roduct e<uals 0/ d. Either a or b

"".

2n !000 Allan ga,e the following donations% a. b. c. d. &100 000 to the 2glesia ni Eristo &100 000 for ca*$aign e#$enses of a senatorial candidate &!00 000 to ,icti*s of cala*ities &"00 000 to 2'&

@hich of the abo,e donations are subject to donor=s ta#A "0. 'efore any ci,il or cri*inal action is filed by the '2R in court 8888888888888 is necessary% a. b. c. d. "1. A$$ro,al of the +ecretary of Justice A$$ro,al of the '2R -o**issioner A$$ro,al of the +ecretary of ;inance A$$ro,al of the &resident

The 88888888888 has e#clusi,e and original jurisdiction o,er all cri*inal offenses arising fro* ,iolations of the 9ational 2nternal Re,enue -ode or Tariff and -usto*s -ode and other laws ad*inistered by the 'ureau of 2nternal Re,enue or the 'ureau of -usto*s where the $rinci$al a*ount of ta#es and fees e#clusi,e of charges and $enalties clai*ed is one *illion $esos or *ore. a. '2R -o**issioner

b. .etro$olitan Trial -ourt c. Regional Trial -ourt d. -ourt of Ta# A$$eals "4. The $rinci$le that where a clai* for refund:credit is filed beyond the $rescri$ti,e $eriod it can still be a$$lied against other ta#es that *ay be due is% a. b. c. d. "5. 6octrine of e<uitable benefit 6octrine of e<uitable recou$*ent E<uitable ta# benefit rule -ohan Rule

The funda*ental $rinci$les of local ta#ation are% a. b. c. d. &ublic $ur$ose Unifor*ity &rinci$le 9ot to let the collection of ta#es to $ri,ate $erson All of the abo,e

"7.

@here the gross inco*e of a ta#$ayer e#ceeds &110 000 $er <uarter his inco*e ta# return *ust be acco*$anied by% a. b. c. d. Audit certificate of an inde$endent -&A -o*$arati,e ;inancial +tate*ents +chedule of Ta#es and Bicenses +u**ary of 2nco*e $ay*ents

"9.

The following inco*e are not ta#able e#ce$t% a. b. c. d. e. +alary of far* wor(ers in the for* of $roducts raised in the far*. +e$aration $ay of e*$loyees who ,oluntarily resigned Value of leasehold i*$ro,e*ent constructed on the leased land 2ncrease in *ar(et ,alue of land 9one of the abo,e

00.

-ash di,idends recei,ed fro* a do*estic cor$oration are subject to final ta# of 10/ if recei,ed by% a. b. c. d. Another do*estic cor$oration Resident foreign cor$oration 9on)resident alien engaged in trade:business in the &hil. Resident ;ili$ino citi>en

01.

6ue to an uncertainty whether or not a new ta# is a$$licable to $rinting co*$anies A'&rinters sub*itted a legal <uery to the 'ureau of 2nternal Re,enue on that issue. The '2R issued a ruling that $rinting co*$anies are not co,ered by the new law. Relying on this ruling A'- &rinters did not $ay said ta#. +ubse<uently howe,er the '2R re,ersed the ruling and issued a new one stating that the ta# co,ers $rinting co*$anies. -ould the '2R now assess A'- &rinters for bac( ta#es corres$onding to the years before the new rulingA a. b. c. d. e. Fes. The re,ersal of the ruling is not $rejudicial to the ta#$ayer. Fes. The re,ersal of the ruling is within the $ower of the '2R. Fes. The re,ersal of the ruling is consistent with the lifeblood doctrine. Fes. The re,ersal of the ruling does not result in gra,e injustice to the ta#$ayer. 9one of the abo,e.

0!.

The following are subject to a*use*ent ta#es% a. 3ross recei$ts of carni,als b. 3ross recei$ts of cine*ahouses

c. &rofessional bas(etball ga*es d. 3ross recei$ts of circus 0". The following are considered ta#es% a. b. c. d. 00. Toll Bicense &enalty 9one of the abo,e

The $ower to ta# *ay be delegated to% a. b. c. d. The &resident '2R -TA a and b only

01.

The '2R -o**issioner is e*$owered to% a. b. c. d. 2nter$ret ta# laws and decide ta# cases Gbtain infor*ation su**on and e#a*ine witnesses -ollect national internal re,enue ta#es All of the abo,e

04.

Bife insurance $roceeds shall not be included in ta#$ayer=s gross inco*e when% a. b. c. d. e. The a*ount does not <ualify as inco*e The reci$ient is always the beneficiary The life insurance $olicy always $ro,ides for e#clusion The a*ount is $aid u$on the death of the insured 9one of the abo,e

05.

The '2R -o**issioner can in<uire into the ban( de$osit of the ta#$ayer in the following cases% a. b. c. d. To deter*ine the gross estate in estate ta# cases -o*$ro*ise on the ground of financial inca$acity Ta#$ayer e#ecutes a wai,er of the 'an( +ecrecy Baw All of the abo,e

07.

+ei>ure and forfeiture $roceedings are within the e#clusi,e jurisdiction of a. b. c. d. -ourt of Ta# A$$eals -ollector of -usto*s Regular courts +ecretary of ;inance

09.

The e<ual $rotection clause is subject to reasonable classification. -lassification to be ,alid *ust% a. b. c. d. Rest on substantial distinction 3er*ane to the $ur$ose of the law 9ot li*ited to e#isting conditions only All of the abo,e

10.

The following are $rohibited i*$ortations e#ce$t% a. b. c. d. e. @ea$ons of war 2nsidious articles 9arcotic 6rugs. 3a*bling de,ices Bi,e ani*als

11.

The following '2R actions on the $rotest of an assess*ent are tanta*ount to denial thereof% a. ;iling of collection case in court b. 2ssuance of warrant of distraint:le,y c. 2naction of the '2R -o**issioner within 170 days fro* sub*ission of su$$orting docu*ents by the ta#$ayer d. All of the abo,e

1!.

J' got *arried to +AF last January !000. Gn 9o,e*ber "0 !000 +AF ga,e birth to twins. Unfortunately howe,er +AF died in the course of her deli,ery. 6ue to co*$lications one of the twins also died on 6ece*ber 11 !000. 2n $re$aring his 2nco*e Ta# Return H2TRI for the year !000 what should J' indicate in the 2TR as his ci,il status% a. b. c. d. e. +ingle .arried with ! de$endents Cead of the fa*ily with 1 de$endent Cead of the fa*ily with ! de$endents 9one of the abo,e

1".

The following criteria need not be obser,ed in the e#ercise of the fle#ible $ower of the &resident under the Tariff J -usto*s -ode% a. b. c. d. 9ational security @elfare of the $eo$le Jurisdiction of the -usto*s -o**issioner 9ational Econo*y

10.

.onthly su$$ort regularly gi,en by an un*arried daughter to her aged *other. a. b. c. d. Ta#able inco*e of *other +ubject to donor=s ta# E#e*$t fro* ta# 9one of the abo,e

11.

The following are s$ecial custo*s duties e#ce$t% a. b. c. d. 6u*$ing duties .ar(ing duties 6iscri*inatory duties 9one of the abo,e

14.

-ancellation of debt of e*$loyee by his e*$loyer is ta#able as a. b. c. d. -o*$ensation inco*e 6onation 2ndirect di,idend Either a or b

15.

2nfor*er=s reward is e<ual to a. 10/ of re,enues surcharges or fees collected by the '2R as a result of the infor*ation gi,en b. & 1 000 000 c. a or b whiche,er is lower d. a or b whiche,er is higher

17.

The following are duty)free articles%

a. b. c. d. 19.

&ersonal articles Articles for re$air Articles for $ublic e#$osition:e#hibits All of the abo,e

The following non)resident aliens can be subject to 11/ inco*e ta# on inco*e deri,ed fro* sources within the &hili$$ines. a. b. c. d. e*$loyed by regional area:o$erating head<uarters of *ultinational co*$anies e*$loyed by G'U e*$loyed by $etroleu* ser,ice contractor and subcontractor all of the abo,e

40.

@hich of the following ta#es are not deductible fro* gross inco*e% a. b. c. d. &hili$$ine 2nco*e Ta# Value Added Ta# Transfer Ta#es All of the abo,e

41.

+e$aration $ay is ta#able. a. b. c. d. e. if se$aration is due to death sic(ness or injury of e*$loyee if e*$loyee ,oluntarily resigned if e*$loyee resigned at the age of 40 if the e*$loyer closed sho$ all of the abo,e

4!.

The following are ta#ed li(e cor$oration a. b. c. d. general $rofessional $artnershi$ ordinary business $artnershi$ estates and trusts all of the abo,e

4".

VAT is a. b. c. d. e. s$ecial ta# local ta# s$ecific ta# regressi,e ta# none of the abo,e

40.

The following ta#es ha,e been re$laced by VAT $er RA 9""5 a. b. c. d. e. fringe benefits ta# co**on carrier=s ta# caterer=s ta# $ercentage ta# on ban(s and finance co*$anies b and c only

41.

The following are not subject to the i*$ro$erly accu*ulated earnings ta# e#ce$t% a. b. c. d. &ublicly held cor$orations 2nsurance co*$anies 'an(s and other non)ban( financial inter*ediaries 9one of the abo,e

44.

2f *onthly rental inco*e of a residential unit e#ceeds & 10 000 $er unit the sa*e shall be subject to 1!/ VAT. a. True without any further condition.

b. True only if the total gross annual rentals recei,ed e#ceed & 1.1. c. ;alse this is subject to 0/ VAT. d. ;alse this is e#e*$t fro* VAT under RA 9""5 45. The $reli*inary in,estigation of a fraudulent ta# e,asion case *ay be enjoined in the following cases. a. b. c. d. e. 47. when there is a $rejudicial <uestion when double jeo$ardy is clearly a$$arent when charges are *anifestly false and *oti,ated by lust for ,engeance when the court has no jurisdiction o,er the offense all of the abo,e

+ale of real estate is subject to VAT a. b. c. d. True if *ade in the regular course of trade or business ;alse it is e#e*$t if the real estate is classified as ca$ital asset ;alse it is e#e*$t if what is sold is a residential unit a and b are correct

49.

@hy is the ;ringe 'enefits Ta# collectible fro* the e*$loyer and not fro* the e*$loyeeA a. b. c. d. Valuation of benefits is easier at the le,el of the e*$loyer -ollection of ;'T is ensured because it is withheld at source The e*$loyee does not ha,e the *eans to $ay a and b are correct

50.

A ta#$ayer with gross annual sales not e#ceeding &100 000 is e#e*$t fro* $ay*ent of business ta# and registration re<uire*ents. a. True b. ;alse re<uired to register with the '2R but e#e*$t fro* the $ay*ent of registration fee c. ;alse re<uired to $ay registration fee d. b and c are correct

51.

@hich of the following state*ents is wrongA a. The .-2T is e<ual to !/ of the gross inco*e of the cor$oration b. The .-2T is not co*$uted <uarterly but on an annual basis c. The .-2T $ay*ents can be carried o,er for the ne#t " years i**ediately following such $ay*ent d. The ta#$ayer should $ay the .-2T or the regular inco*e ta# whiche,er is higher.

5!.

2n ruling on the constitutionality of the EVAT the +u$re*e -ourt held that% a. A re,enue bill shall originate e#clusi,ely in the Couse of Re$resentati,es but the +enate *ay ado$t its own ,ersion b. The re<uire*ent of three se$arate readings on se$arate days cannot be dis$ensed with c. The 'ica*eral -onference -o**ittee cannot *a(e unauthori>ed insertions on the +enate ,ersion of the bill d. b and c are incorrect

5".

The following are e#e*$t fro* a*use*ent ta#% a. b. c. d. e. $rofessional bas(etball ga*es bo#ing e#hibitions billiards bowling c and d only

10

50.

The following are subject to "/ co**on carrier=s ta# e#ce$t% a. b. c. d. ta#icab o$erators co**on carriers trans$orting cargoes tourist buses *otor tricycles

51.

The *anufacture of casino rubbing alcohol is subject to% a. b. c. d. e. VAT $ercentage ta# s$ecific ta# ad,alore* ta# e#e*$t

54.

A ta# i*$osed at e,ery stage of distribution $rocess on the sale barter or e#change of goods and ser,ices and transactions dee*ed sale as well as i*$ortation of goods and ser,ices. a. b. c. d. $ri,ilege ta# $ercentage ta# VAT e#cise ta#

55.

.ario dis$uted a deficiency ta# assess*ent and u$on recei$t of an ad,erse decision by the -o**issioner of 2nternal Re,enue filed an a$$eal with the -ourt of Ta# A$$eals. @hile the a$$eal is $ending the '2R ser,ed a warrant of le,y on the real $ro$erties of .ario to enforce the collection of the dis$uted ta#. 3ranting arguendo that the '2R can legally le,y on the $ro$erties what could .ario do to sto$ the $rocessA a. A$$eal the '2R=s action to the -ourt of A$$eals b. 6is$ute '2R=s le,y on the $ro$erties before the -ourt of Ta# A$$eals c. ;ile a *otion for injunction with the -ourt of Ta# A$$eals on the ground that such collection will jeo$ardi>e the interest of the ta#$ayer or the go,ern*ent. d. +ecure a te*$orary restraining order before the +u$re*e -ourt. e. 9one of the abo,e

57.

Additional e#e*$tion for each de$endent child $er RA 9100 a. b. c. d. & 10 000 & 9 000 & 7 000 & !1 000

59.

2nco*e ta# is not a a. b. c. d. e. $ersonal ta# national ta# e#cise ta# direct ta# $rogressi,e ta#

70.

Under RA70!0 the allowable deduction for *edical e#$enses of a resident decedent shall not e#ceed % a. b. c. d. & 10 000 & 110 000 & 1 000 & 100 000

11

71.

&er RA 9100 how *uch is the total $ersonal and additional e#e*$tion of .rs. A who beca*e a widow during the ta#able year and su$$orting her *other and one *entally retarded illegiti*ate !1 year)old childA a. b. c. d. & 51 000 & 00 000 & 100 000 & 07 000

7!.

The following is not a ta#able inco*e of a resident ;ili$ino citi>en% a. b. c. d. e. inco*e fro* an illegal business inco*e fro* a business abroad inco*e fro* casino winnings fro* lotto none of the abo,e

7".

@hich of the following are e#cluded fro* the gross estateA a. b. c. d. e. $roceeds of life insurance $olicy $ayable to an irre,ocable beneficiary re,ocable transfers transfer in conte*$lation of death clai*s against insol,ent $ersons none of the abo,e

70.

'asically $ower of ta#ation is e#ercised by a. b. c. d. e. the &resident the -ongress Judiciary '2R All of the abo,e

71.

The standard deduction of & 1 000 000 fro* the gross estate is% a. b. c. d. o$tional in addition to the ite*i>ed deductions not a,ailable to resident decedents in lieu of all ite*i>ed deductions

74.

The following are the re<uisites for inco*e to be ta#able e#ce$t% a. b. c. d. e. There *ust be gain or $rofit The gain *ust be recei,ed or reali>ed The gain *ust not be e#cluded by law or treaty fro* ta#ation The inco*e *ust e#ceed the $ersonal and additional e#e*$tions of the ta#$ayer 9one of the abo,e

75.

@ho a*ong the following are 9GT re<uired to file an inco*e ta# returnA a. b. c. d. ;ili$ino citi>en with business inco*e fro* the &hili$$ines. Resident alien on inco*e deri,ed within the &hili$$ines. 9on)resident alien engaged in trade or business An indi,idual whose sole inco*e has been subjected to final withholding ta#.

77.

@hich of the following are 9GT e#e*$t fro* inco*e ta#A a. b. c. d. e. &hili$$ine Cealth 2nsurance -or$oration &hili$$ine 9ational Gil -o*$any Uni,ersity of the &hili$$ines &A3-GR b and d

12

79.

@hich of the following is a <ualified de$endent for additional e#e*$tionA a. b. c. d. e. 01 years old *entally retarded son an illegiti*ate child legally ado$ted child all of the abo,e none of the abo,e

90.

@hich esca$e fro* ta#ation does not result in loss of re,enue to the go,ern*entA a. b. c. d. e. Ta# e,asion Ta# a,oidance Ta# e#e*$tion +hifting All of the abo,e

91.

The following fringe benefits are not ta#able e#ce$t% a. ;ringe benefits which are authori>ed and e#e*$ted fro* ta# under s$ecial laws. b. -ontributions of the e*$loyer for the benefit of the e*$loyee to retire*ent insurance and hos$itali>ation benefits. c. .e*bershi$ fees dues and other e#$enses borne by the e*$loyer in social or athletic clubs or other si*ilar organi>ations. d. 'enefits gi,en to ran( and file e*$loyees whether granted under a collecti,e bargaining agree*ent or not. e. 6e *ini*is benefits.

9!.

The final ta# on ca$ital gains fro* sale of real $ro$erty classified as ca$ital asset is% a. !0/ based on the gross selling $rice or current fair *ar(et ,alue whiche,er is higher. b. 5.1/ based on the gross $rofit. c. 4/ based on the gross selling $rice or >onal ,alue whiche,er is higher. d. 4/ of the $urchase $rice or the assessed ,alue whiche,er is higher. e. 9one of the abo,e

9".

+ale barter e#change or other dis$osition of shares of stoc(s which are traded in the local stoc( e#change is subject to% a. b. c. d. ca$ital gains ta# of 1/ and 10/ of ca$ital gain $ercentage ta# of D of 1/ of selling $rice 10/ VAT none of the abo,e

90.

6o*eng bought a $arcel of residential land for & 1 000 000 so*eti*e in 1970. Ce sold the sa*e to 9orbie for & 10 000 000 on Gctober 11 !000. The transaction is subject to 4/ ca$ital gains ta#. a. b. c. d. True ;alse if 6o*eng is engaged in the real estate business. ;alse it is subject to VAT if the sale is in the regular course of trade or business. b and c are correct.

91.

@ho *ay not a,ail of the ite*i>ed deductions fro* gross inco*eA a. b. c. d. Resident aliens 9on resident aliens engaged in trade or business in the &hili$$ines. Resident foreign cor$orations. -iti>ens and resident aliens whose inco*e is $urely co*$ensation inco*e.

94.

The following are re<uisites for the deductibility of bad debts e#ce$t%

13

a. There *ust be a ,alid and subsisting debt. b. The debt *ust be charged off during the ta#able year. c. The debt *ust be actually ascertained to be worthless and uncollectible during the ta#able year. d. 2t *ust be e,idenced by a closed and co*$leted transaction. 95. @hat is the nature of ta# lawsA a. b. c. d. e. 97. not $olitical $enal ci,il both a and b both a and c

Under the KBife)'lood doctrineL the *ain source of re,enue of the go,ern*ent is ta#es. The $ower to ta# includes the $ower to destroy in all cases. a. b. c. d. 'oth state*ents are true. 'oth state*ents are false. The first state*ent is true while the second state*ent is false The first state*ent is false while the second state*ent is true.

99.

@hich of the following is not a source of ta# lawsA a. Ad*inistrati,e regulations and rulings or o$inions of the +ecretary of Justice. b. Ad*inistrati,e regulations and rulings or o$inions of the +ecretary of 'udget and .anage*ent. c. Ad*inistrati,e regulations and rulings or o$inions of the -o**issioner of 2nternal Re,enue. d. Ad*inistrati,e regulations and rulings or o$inions of the +ecretary of ;inance.

100.

Ti$s and gratuities $aid directly to an e*$loyee by a custo*er and not re$orted to the e*$loyer a. b. c. d. Ta#able co*$ensation inco*e and subject to withholding ta#. 9ot ta#able. Ta#able co*$ensation inco*e but not subject to withholding ta#. +ubject to donor=s ta#.

101.

9o credit:refund of ta#es shall be allowed unless the ta#$ayer% a. b. c. d. ;iles a written clai* for credit:refund with the '2R within ! years fro* $ay*ent &ays the ta# under $rotest A$$eals to the -TA A*ends his ta# return

10!.

The oft)cited doctrine that ta#es are lifeblood of the go,ern*ent does not fa,or one of the following rules% a. b. c. d. Ta#es are not subject to set off Ta#es should be collected without unnecessary hindrance Ta# e#e*$tions should be s$aringly granted 6octrine of E<uitable Recou$*ent 2n our jurisdiction the following

10".

Ta#es are not enforced $ro$ortional contributions. state*ents are correct e#ce$t% a. b. c. d. Ta#es are obligations created by law. Ta#es are based on one=s ability to $ay. Ta#es are le,ied by authority of the law. The $ower to ta# is not unli*ited.

14

100.

@hich of the following judicial $ronounce*ents is *ost recent% a. U$on ta#ation de$ends the 3o,ern*ent=s ability to ser,e the $eo$le for whose benefit ta#es are collected. b. The '2R should be gi,en the necessary discretion to a,ail itself of the *ost e#$editious way to collect ta#es. c. Ta#es cannot be i*$osed by the e#ecuti,e de$art*ent not by the courts. d. The best e,idence obtainable under +ection 4 H'I of the 92R- does not include *ere $hotoco$ies of records:docu*ents.

101.

-ongress $assed a law allowing the $ay*ent of ta#es in (ind:ser,ices. This ,iolates the $rinci$le of% a. b. c. d. Econo*ic efficiency ;iscal ade<uacy Theoretical justice Ad*inistrati,e feasibility

104.

@hich of the following state*ents *ay not be untenable% a. b. c. d. The nature of the state=s $ower to ta# is two)fold. Begislati,e $ower to ta# in,ol,es the $ro*ulgation of rules. The rule of ta#ation should not be $ro$ortionate. Ta# e#e*$tions are liberally construed in fa,or of the go,ern*ent.

105.

The following $ro$ositions are erroneous e#e$t% a. b. c. d. &ublic $ur$ose includes indirect $ublic ad,antage. The $ower to ta# is inherent because it re<uires a set of rules. Ta#es are always based on the a*ount recei,ed by the ta#$ayer. Ta#$ayer *ust recei,e $ersonal benefit for the $ay*ent of ta#.

107.

The $ower to ta# in,ol,es the $ower to destroy said -hief Justice .arshall of the U+ +u$re*e -ourt. This should be construed to *ean that% a. The $ower of ta#ation is unli*ited b. The $ower to ta# *ay be used solely for the $ur$ose of raising re,enues. c. The $ower to ta# includes the $ower to regulate e,en to the e#tent of $rohibition or destruction. d. The $ower to ta# is su$erior to all other for*s of the go,ern*ent.

109.

The secondary or non)re,enue $ur$oses of ta#ation include the following e#ce$t% a. b. c. d. As an i*$le*ent of the $olice $ower of the +tate To encourage the growth of local industries. To reduce social ine<uality To $rotect our local industry against unfair foreign co*$etition.

110.

@hich of the following state*ents is true% a. b. c. d. &ay*ent signifies an act of co*$liance by the ta#$ayer. The act of assessing and collecting ta#es is ad*inistrati,e in character. +y*biotic relationshi$ theory is different fro* benefits recei,ed $rinci$le. All of the abo,e.

111.

@hich of the following $re,ents the occurrence of double ta#ationA a. b. c. d. Vanishing deduction Allowable deduction E#e*$tion *ethod 9one of the abo,e

15

11!.

The following ite*s are ta#able e#ce$t% a. b. c. d. e. 2llegal gains Ta# refund in,ol,ing deductible ta# Ta# refund in,ol,ing non)deductible ta# -ash di,idend Annuities

11".

3ross inco*e *eans all inco*e deri,ed fro* whate,er source including the following ite*s e#ce$t% a. b. c. d. &ensions &ri>es and winnings Rents +toc( di,idends

110.

E#clusions fro* gross inco*e under the Ta# -ode include the following e#ce$t% a. b. c. d. Veterans benefits -o*$ensation for injuries and sic(ness 3ifts be<uests and de,ises 3ains fro* rede*$tion of shares of stoc(

111.

;ringe benefit ta# shall be $aid by the e*$loyer because% a. b. c. d. The e*$loyee recei,ed the benefit net of ta# The Ta# -ode e#$ressly so states The e*$loyer relie,es the e*$loyee of the burden to $ay the ta# The e*$loyer is the agent of the e*$loyee for the $ay*ent thereof.

114.

Allowable deductions are distinguished fro* $ersonal e#e*$tions in that% a. The for*er *ay be a,ailed of only by cor$orate ta#$ayers whereas the latter *ay a$$ly to indi,idual ta#$ayers. b. The for*er a$$lies to cor$orate and indi,idual ta#$ayers engaged in business or are $racticing their $rofession whereas the latter co,ers only natural $ersons. c. The for*er *ay be found in +ection "0 while the latter is granted under +ection "1. d. The for*er is a $ri,ilege while the latter is a *atter of right.

115.

@hich of the following state*ents is not correctA a. b. c. d. 2nterest on go,ern*ent securities is not ta# e#e*$t effecti,e January 1 1997. +toc( di,idend is ta# e#e*$t. &re*iu* on life insurance *ay be ta#able to the e*$loyee. ;ringe benefit is subject to "!/ final ta# effecti,e January 1 !000.

117.

3ross estate includes the following ite*s e#ce$t% a. b. c. d. Transfer for insufficient consideration 6onations *ortis causa Re,ocable transfers Transfer under s$ecial $ower of a$$oint*ent.

119.

6onation to stranger is subject to "0/ of the net gift. +tranger includes% a. b. c. d. +econd cousin Calf brother Bineal descendant -ollateral relati,e within the fourth ci,il degree of relationshi$

16

1!0.

Ta#es are the lifeblood of the go,ern*ent and their $ro*$t and certain a,ailability is an i*$erious need. This $ronounce*ent was cite in se,eral decisions of the +u$re*e -ourt e#ce$t in the case of% a. b. c. d. -o**issioner ,s. &ineda !1 +-RA 101 Vera ,s. ;ernande> 79 +-RA 199 But> ,s. Araneta 97 +-RA 107 &hile# .ining ,s. -2R !90 +-RA 457

1!1.

KBest the collector (ill the hen that lays the golden egg.L This has been *eta$horically *entioned to justify a settled rule as laid down in the case of% a. b. c. d. 3o*e> ,s. &alo*ar !1 +-RA 7!5 &un>alan ,s. .anila 91 +-RA 04 Ro#as ,s. -TA !" +-RA !54 Villegas ,s. &ao 74 +-RA !50

1!!.

The sy*biotic relationshi$ theory as enunciated in the case of -2R ,s. Algue 2nc. 117 +-RA 9 is an a*$lification of% a. b. c. d. Ability to $ay $rinci$le &rogressi,e syste* of ta#ation Bifeblood doctrine 'enefit)$rotection theory

1!".

+ettled is the rule that in ta# *atters the go,ern*ent is not esto$$ed by the errors or *ista(es co**itted by its agents or officers. This should be construed to *ean that% a. b. c. d. The $ower to ta# is su$re*e and unli*ited. The $ower to ta# is $lenary and co*$rehensi,e. The state *ay still collect $rescribed ta#es. '2R can still $resent e,idence to $ro,e assess*ent.

1!0.

+rictissi*i juris *ay be a$$lied in the construction and inter$retation of ta# laws e#ce$t% a. b. c. d. Bocal ordinance i*$osing business ta#. Bocal ordinance granting ta# a*nesty. &ro,ision of the 92R- granting ta# credit. +$ecial law lowering ta# rate.

1!1.

.ay a ta#$ayer who has clai* for VAT in$ut credit or refund set)off said clai* against his other ta# liabilitiesA a. b. c. d. Fes Fes Fes Fes $ro,ided that the clai* is set)off against other un$aid inco*e ta#. $ro,ided that the clai* is set)off against other national internal re,enue ta#. $ro,ided that the clai*ant is a VAT)registered ta#$ayer. $ro,ided that the clai* is duly substantiated by recei$ts.

1!4.

The $olice $ower the $ower of ta#ation and the $ower of e*inent do*ain are co)e<ual and inherent $owers of go,ern*ent. .ay a ta# be ,alidly i*$osed in the e#ercise of the $olice $ower and not of the $ower to ta#A a. b. c. d. Fes because the $ower to ta# and $olice $ower ha,e so*e si*ilar objecti,es. Fes because the $olice $ower of the state includes the $ower to regulate Fes because ta#es *ay be i*$osed to regulate. Fes because ta#ation also in,ol,es the $ower to carry out the legiti*ate objects of go,ern*ent.

1!5.

Ta#es are not subject to set)off because% a. Ta#es are the lifeblood of the go,ern*ent. b. Ta#es are the sinews of the state.

17

c. Ta#es are enforced charges d. Ta#es should be collected without unnecessary hindrance e. Ta#es are not ordinary obligations. 1!7. .ay the collection of ta#es be barred by $rescri$tionA a. b. c. d. e. 1!9. Fes Fes Fes Fes Fes $ro,ided that they are inco*e ta#es. $ro,ided that they are local ta#es. $ro,ided that they are custo* duties. $ro,ided that the ta# law $ro,ides for $rescri$ti,e $eriods. $ro,ided that they are i*$osed by s$ecial laws.

.ay the courts enjoin the collection of re,enue ta#esA a. b. c. d. e. 9o because ta#es are the lifeblood of the go,ern*ent. 9o because ta#es are needed to carry out the legiti*ate objects of the go,ern*ent. 9o e#ce$t if the collection will jeo$ardi>e the interest of the ta#$ayer. 9o e#ce$t if the ta#$ayer is financially inca$able. 9one of the abo,e.

1"0.

@hat is the $ur$ose of the doctrine of constructi,e recei$t of inco*eA a. b. c. d. To ensure collection of ta#es. To co*$el ta#$ayers to re$ort their inco*e To $re,ent ta# e,asion. To $re,ent the ta#$ayer on the cash basis fro* $ost$oning the actual recei$t of ta#able inco*e. e. 9one of the abo,e.

1"1.

Any a*ount recei,ed under clai* of right is ta#able if% a. b. c. d. e. 2t arises fro* illegal transaction. 2t is recei,ed without restriction as to its dis$osition. 2t is decreed by the court The clai*ant dies The clai*ant donates the sa*e

1"!.

Ta#able rent inco*e includes the following ite*s e#ce$t% a. b. c. d. Value of $er*anent i*$ro,e*ent &re*iu*s $aid on the insurance of the leased $re*ises Royalties 2nterest on bond issued by the lessor

1"".

2nco*e fro* long)ter* contracts *ay not be re$orted under one of the following *ethods% a. b. c. d. e. Gutright *ethod +$read)out *ethod -o*$leted contract basis Accrual basis -ash basis

1"0.

Cow is co*$ensation $aid in $ro*issory note treated for inco*e ta# $ur$oseA a. b. c. d. e. +ubject to final ta# 2t is ta#ed at gross a*ount Ta#able to the a*ount of the fair *ar(et ,alue of the $ro*issory note 2t is deductible fro* gross co*$ensation inco*e 9one of the abo,e

18

1"1.

Ta# a$$licable to certain s$ecified goods or articles *anufactured or $urchased in the &hili$$ines for do*estic sale or consu*$tion. a. b. c. d. +$ecific ta# VAT &ercentage ta# E#cise ta#

1"4.

-ost of carabao used in far*ing is deductible as any ordinary e#$ense. a. b. c. d. True ;alse because carabao is a ca$ital e#$enditure ;alse because carabao is subject to de$reciation 'oth b and c

1"5.

Under RA 9""5 a $resu*$ti,e in$ut ta# credit is allowed to $rocessors:*anufacturers of *il( sardines *ac(erel refined sugar coo(ing oil and $ac(ed noodle)based instant *eals at the rate of% a. b. c. d. 1.1/ 0/ !/ 7/

1"7.

Ta# e,asion is% a. b. c. d. .eans of esca$e fro* ta# liability outside what is legal and $er*issible Ta# sa,ing de,ice within the *eans sanctioned by law 6eduction fro* foreign ta#es $aid a and c only

1"9.

The following are <ualified de$endents of a head of the fa*ily e#ce$t% a. b. c. d. Either or both $arents 'rother:+ister of whole or half)blood +enior citi>en 3randchildren

100.

@hich of the following is deductible for inco*e ta# $ur$oses% a. b. c. d. E*$loyer=s contribution to $ension trust &ersonal fa*ily li,ing e#$enses @agering losses Eic(bac(s

101.

;or ta# $ur$oses inco*e is synony*ous to% a. b. c. d. -a$ital Recei$ts Reali>ed $rofit 9one of the abo,e

10!.

The following can a,ail of the 2n$ut Ta# -redit e#ce$t% a. b. c. d. 2*$orter of goods:articles $re,iously subjected to VAT &urchaser of do*estic goods u$on consu**ation of the sale E#$orter of goods and ser,ices not registered under the VAT syste* &urchaser of ser,ices lessee or licensee u$on $ay*ent of co*$ensation rental royalty or fee

10".

Educational ser,ices rendered by $ri,ate educational institutions are e#e*$t fro* VAT if duly accredited by the following e#ce$t%

19

a. b. c. d. 100.

+ecurities and E#change -o**ission -o**ission on Cigher Education 6e$art*ent of Education -ulture and +$orts Technical Education and +(ills 6e,elo$*ent Authority

;or VAT $ur$oses in connection with deferred $ay*ent sale of real $ro$erty the ter* Kinitial $ay*entsL shall include% a. b. c. d. &ay*ents *ade in the year of sale in addition to the down $ay*ent .ortgage on the real $ro$erty sold not e#ceeding the cost thereof E,idence of indebtedness issued by the $urchaser to the seller at the ti*e of sale 6own $ay*ent only *ade at the ti*e of sale.

101.

2n our jurisdiction which of the following state*ents *ay be erroneous% a. Ta#es are $ecuniary in nature. b. Ta#es are enforced charges and contributions. c. Ta#es are i*$osed on $ersons and $ro$erty within the territorial jurisdiction of a +tate. d. Ta#es are le,ied by the e#ecuti,e branch of the go,ern*ent. e. Ta#es are assessed according to a reasonable rule of a$$ortion*ent.

104.

6eter*ine which of the following ite*s are ta#able% a. b. c. d. e. 2nco*e fro* jueteng 3ain arising fro* e#$ro$riation of $ro$erty Ta#es $aid and subse<uently refunded Reco,ery of bad debts $re,iously charged off All of the abo,e

105.

6eter*ine which of the following is HareI included in the $re$aration of annual inco*e ta# returns% a. b. c. d. e. &roceeds of life insurance recei,ed by a child as irre,ocable beneficiary 1"th *onth $ay and de *ini*is benefits 6i,idends recei,ed by a do*estic cor$oration fro* another do*estic cor$oration. 2nterest on de$osits with '&2 ;a*ily 'an( 9one of the abo,e

107.

JR was a $assenger of an airline that crashed. Ce sur,i,ed the accident but sustained serious $hysical injuries which re<uired hos$itali>ation for " *onths. ;ollowing negotiations with the airline and its insurer an agree*ent was reached under the ter*s of which JR was $aid so*e a*ounts. @hich of the following a*ounts constitute ta#able inco*eA a. b. c. d. &100 000 for his hos$itali>ation &!10 000 as *oral da*ages &"00 000 for loss of inco*e during the $eriod of his treat*ent and recu$eration JR recei,ed fro* his e*$loyer the a*ount of &!00 000 re$resenting the cash e<ui,alent of his earned ,acation and sic( lea,es.

109.

.AR got *arried to +ABBF last January !001. Gn 9o,e*ber "0 !001 +ABBF ga,e birth to twins. Unfortunately howe,er +ABBF died in the course of her deli,ery. 6ue to co*$lications one of the twins also died on 6ece*ber 11 !001. 2n $re$aring his 2nco*e Ta# Return H2TRI for the year !001 what should .AR indicate in the 2TR as his ci,il statusA a. b. c. d. +ingle .arried Cead of the fa*ily @idower

20

e. 9one of the abo,e 110. @hich of the following cases *ay not be co*$ro*ised% a. 6elin<uent accounts b. -ases under ad*inistrati,e $rotest after issuance of the final assess*ent notice to the ta#$ayer which are still $ending. c. -ri*inal ta# fraud cases d. 9one of the abo,e 111. A ta#$ayer recei,ed a ta# deficiency assess*ent of &1.! .illion fro* the '2R de*anding $ay*ent within 10 days otherwise it would collect through su**ary re*edies. The ta#$ayer re<uested for reconsideration stating the grounds therefore. 2nstead of resol,ing the re<uest for reconsideration the '2R sent a ;inal 9otice before +ei>ure to the ta#$ayer. @hich of the following re*edies can the ta#$ayer a,ailA a. b. c. d. 11!. ;ile an injunction before the Regional Trial -ourt A$$eal to the -ourt of Ta# A$$eals A$$eal to the -ourt of A$$eals &roceed with -ertiorari before the +u$re*e -ourt

The Ro*an -atholic -hurch owns a !)hectare lot in a town in Tarlac $ro,ince. The -hurch and a con,ent occu$y the southern side and *iddle $art. The southeastern side by so*e co**ercial establish*ents while the rest of the $ro$erty in $articular the northwestern side is idle or unoccu$ied. @hich of the following is correctA a. The -hurch *ay clai* ta# e#e*$tion on the entire land. b. The e#e*$tion co,ers only the southern side and *iddle $art occu$ied by the -hurch and a con,ent and the eastern side by a school run by the church. c. The ta# is i*$osable on the northwestern side which is idle or unoccu$ied. d. The entire $ro$erty is ta#able for real $ro$erty ta#ation

11".

MFN -olleges is a non)stoc( non)$rofit educational institution run by the Archdiocese of '& -ity. @hich of the following ite*HsI is included in its 2nco*e Ta# ReturnA a. b. c. d. e. Tuition fees Baboratory fees Rentals fro* canteen concessionaires 2nterest fro* *oney)*ar(et $lace*ents of the tuition fees 6onation of a lot and building by school alu*ni

110.

;ran( +inatra an A*erican -iti>en was a to$ e#ecuti,e of a U+ co*$any in the &hili$$ines until he retired in 1999. Ce ca*e to li(e the &hili$$ines so *uch that following his retire*ent he decided to s$end the rest of his life in the country. Ce a$$lied for and was granted a $er*anent resident status the following year. 2n the s$ring of !000 while ,acationing in Grlando ;lorida U+A he suffered a heart attac( and died. @hich of the following assets shall not be included in ta#able gross estate in the &hili$$inesA a. b. c. d. e. f. 'an( 6e$osits with -itiban( .a(ati and -itiban( Grlando ;lorida A condo*iniu* unit in .a(ati +hares of stoc( in the &hili$$ine subsidiary of the U+ -o*$any where he wor(ed. +hares of stoc( in +an .iguel -or$oration and &B6T. +hares of stoc( in 6isney @orld in ;lorida 9one of the abo,e

111.

An indi,idual client not engaged in realty business $aid in full the &10 000 attorney=s fees of his counsel in lot which he bought in 1990 for &1 000 and which has a fair *ar(et ,alue of &40 000. @hich of these is correctA a. The client)transferor is subject to final ca$ital gains ta# based on &40 000 b. The client)transferor is subject to final ca$ital gains ta# based on &10 000

21

c. The client)transferor is not subject to final ca$ital gains ta# d. The client)transferor is subject to inco*e ta# for the difference between &10 000 and &1 000 e. 9one of the abo,e 114. Gne of these is not the correct $eriod within which internal re,enue ta#es shall be assessed% a. b. c. d. 115. @ithin " days after the last day $rescribed by law for the filing of the return @ithin " years fro* the date the return was filed 2f no return was filed within 10 years fro* date of disco,ery of failure to file return 2f return is false or fraudulent within 10 years fro* date of disco,ery of the falsity or fraud.

Gne of these is not an e#ce$tion to the rule that for inco*e ta# $ur$oses the boo(s and records of a ta#$ayer shall be subject to e#a*ination and ins$ection only once in a ta#able year% a. b. c. d. e. @hen the ta#$ayer is outside the &hili$$ines @hen there is fraud irregularity or *ista(e Verification of co*$liance with withholding ta# laws @hen ta#$ayers re<uests rein,estigation Verification of ca$ital gains ta# liabilities

117.

@hich of the following cases is $re)assess*ent notice re<uiredA a. 2n a discre$ancy between the ta# withheld and the a*ount actually re*itted by the withholding agent b. @hen the e#cise ta# due has not been $aid c. Transfer by an e#e*$t $erson of articles to non)e#e*$t $erson d. @hen the co**issioner or his duly authori>ed re$resentati,e finds that $ro$er ta# should be assessed.

119.

To $re)e*$t the la$se of $rescri$ti,e $eriod within which the go,ern*ent can assess and:or collect in court without assess*ent a. The go,ern*ent *ay issue jeo$ardy assess*ent b. The go,ern*ent *ay re<uire wai,er of $rescri$ti,e $eriod c. The wai,er by the ta#$ayer *ust be acce$ted by the co**issioner or his duly authori>ed de$uty. d. The wai,er is a wai,er by the ta#$ayer of his right to in,o(e the defense of $rescri$tion. e. b c and d only

140.

Gne of these is true% a. @ai,er of $rescri$ti,e $eriod to last until the co*$letion of in,estigation is ,alid. b. @ai,er is a ta#$ayer=s concession to the state thus it *ust be construed strictly against the state c. @ai,er being unilateral the state need not e#$ress its acce$tance and when acce$ted the ta#$ayer need not be notified. d. @ai,er being unilateral acce$tance by the state need not obser,e the le,el of authority of the officials e*$owered to acce$t.

141.

Gne of these has no ti*e li*it within which to assess% a. b. c. d. 2nco*e ta# Transfer ta#es Hdonor or estateI Value Added Ta# &ri,ilege ta#

14!.

Gne of these is not a ty$e of local ta# and other i*$ositions O

22

a. b. c. d. 14".

.unici$al ta#es on business J occu$ations .unici$al fees J ser,ice charges Real $ro$erty ta#es Ta#es on gross recei$ts of trans$ortation businesses

;or casual sale of real $ro$erty you do not $ay O a. b. c. d. -a$ital gains ta# 6ocu*entary sta*$ ta# Bocal transfer ta# 2nco*e ta#

140.

2n local business ta#es the local go,ern*ent of one of these is $rohibited to collect O a. b. c. d. factory site &rinci$al office $laces thru which sales truc(s $ass none of the abo,e

141.

+$ecial classes of real $ro$erty do not include O a. b. c. d. Bocal water district &ublic $ower O generating co*$any Cos$itals +chools

144.

@hich is not a le,y on real $ro$erty O a. b. c. d. +$ecial education fund Ad ,alore* ta# on idle land +$ecial assess*ent Transfer ta# on sale or transfer

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ANSWER KEY TAXATION 1. 6 !. ' ". A 0. 6 1. A 4. 5. A 7. ' 9. A 10 .6 11. 6 1!. 6 1". 10. A 11. 6 14. 6 15. 6 17. 6 19. ' !0. 6 !1. !!. 6 !". A !0. ' !1. ' !4. A !5. 6 !7. !9. A "0. "1. 6 "!. 6 "". 6 "0. ' "1. 6 "4. ' "5. 6 "7. A "9. ' 00. 6 01. E 0!. ' 0". 6 00. 6 01. 6 04. 6 05. 6 07. ' 09. 6 10. E 11. 6 1!. ' 1". 10. 11. 6 14. 6 15. 17. 19. 6 40. 6 41. ' 4!. ' 4". 40. E 41. 6 44. ' 45. 47. 6 49. ' 50. ' 51. ' 5!. A 5". E 50. ' 51. 6 54. 55. 6 57. 6 59. 70. 6 71. A 7!. 6 7". A 70. ' 71. ' 74. 6 75. 6 77. E 79. 6 90. 6 91. 9!. 9". ' 90. A 91. 6 94. 6 95. E 97. 99. ' 100 .A 101. A 10!. 6 10". 6 100. 101. 6 104. 105.A 107. 109. ' 110. ' 111. 11!. 11". 6 110. 6 111. 6 114. ' 115. 117. 6 119. A 1!0. 1!1. 1!!. 6 1!". ' 1!0. A 1!1. ' 1!4.1!5. E 1!7. 6 1!9. 1"0. 1"1. ' 1"!. A 1"". E 1"0. E 1"1. 6 1"4. A 1"5. ' 1"7. A 1"9. 6 100. A 101. ' 10!. 10". A 100. A 101. 6 107. E 105. E 107. 109. ' 110. 111. ' 11!. ' 11". 110. ; 111 A 114. A 115. 117. 6 119. E 140. ' 141. 6 14!. 6 14". 6 140. 141. ' 144. 6

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