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Bar Examination Questionnaire for Taxation Law

Set A
(1) A municipality may levy an annual ad valorem tax on real property such as land, building, machinery, and
other improvement only if
(A) the real property is within the Metropolitan Manila Area.
(B) the real property is located in the municipality.
() the !"#$ authori%es it to do so.
(!) the power is delegated to it by the province.
(&) Anne #apada, a student activist, wants to impugn the validity of a tax on text messages. Aside from claiming
that the law adversely affects her since she sends messages by text, what may she allege that would
strengthen her claim to the right to file a taxpayer's suit(
(A) )hat she is entitled to the return of the taxes collected from her in case the court nullifies the tax
measure.
(B) )hat tax money is being extracted and spent in violation of the constitutionally guaranteed right to
freedom of communication.
() )hat she is filing the case in behalf of a substantial number of taxpayers.
(!) )hat text messages are an important part of the lives of the people she represents.
(*) )here is no taxable income until such income is recogni%ed. )axable income is recogni%ed when the
(A) taxpayer fails to include the income in his income tax return.
(B) income has been actually received in money or its e+uivalent.
() income has been received, either actually or constructively.
(!) transaction that is the source of the income is consummated.
(,) -eyrand, "nc., a .hilippine corporation, sold through the local stoc/ exchange 10,000 .#!) shares that it
bought & years ago. -eyrand sold the shares for .& million and reali%ed a net gain of .&00,000.00. 1ow shall it
pay tax on the transaction(
(A) "t shall declare a .& million gross income in its income tax return, deducting its cost of ac+uisition
as an expense.
(B) "t shall report the .&00,000.00 in its corporate income tax return ad2usted by the holding period.
() "t shall pay 34 tax on the first .100,000.00 of the .&00,000.00 and 104 tax on the remaining
.100,000.00.
(!) "t shall pay a tax of one5half of 14 of the .& million gross sales.
(3) Amaretto, "nc., imported 100 cases of Marula wine from 6outh Africa. )he shipment was assessed duties
and value5added taxes of .*00,000 which Amaretto, "nc. immediately paid. )he Bureau of ustoms did not,
however, issue the release papers of the shipment yet since the 7ood and !rug Administration (7!A) needed
to test the suitability of the wine for human consumption. "s the Bureau of ustoms at fault for refusing to
release the shipment 2ust as yet(
(A) 8es, because the importation was already terminated as a result of the payment of the taxes due.
(B) 8es, the Bureau of ustoms is estopped from holding the release of the shipment after receiving
the payment.
() 9o, if the amount paid as duties and value5added taxes due on the importation was insufficient.
(!) 9o, because the Bureau of ustoms has not yer issued the legal permit for withdrawal pending the
7!A:s findings.
(;) <hich theory in taxation states that without taxes, a government would be paraly%ed for lac/ of power to
activate and operate it, resulting in its destruction(
(A) .ower to destroy theory
(B) #ifeblood theory
() 6umptuary theory
(!) 6ymbiotic doctrine
(=) )he spouses 1elena and 7ederico wanted to donate a parcel of land to their son !ondon who is getting
married in !ecember, &011. )he parcel of land has a %onal valuation of .,&0,000.00. <hat is the most efficient
mode of donating the property(
(A) )he spouses should first donate in &011 a portion of the property valued at .&0,000.00 then spread
the .,00,000.00 e+ually for &01&, &01*, &01, and &013.
(B) 6pread the donation over a period of 3 years by the spouses donating .100,000.00 each year from
&011 to &013.
() )he spouses should each donate a .110,000.00 portion of the value of the property in &011 then
each should donate .100,000.00 in &01&.
(!) )he spouses should each donate a .100,000.00 portion of the value of the property in &011, and
another .100,000.00 each in &01&. )hen, in &01*, 1elena should donate the remaining .&0,000.00.
(>) Mia, a compensation income earner, filed her income tax return for the taxable year &00= on March *0,
&00>. ?n May &0, &011, Mia received an assessment notice and letter of demand covering the taxable year
&00= but the postmar/ on the envelope shows April 10, &011. 1er return is not a false and fraudulent return.
an Mia raise the defense of prescription(
(A) 9o. )he * year prescriptive period started to run on April 13, &00>, hence, it has not yet expired on
April 10, &011.
(B) 8es. )he * year prescriptive period started to run on April 13, &00>, hence, it had already expired
by May &0, &011.
() 9o. )he prescriptive period started to run on March *0, &00>, hence, the * year period expired on
April 10, &011.
(!) 8es. 6ince the *5year prescriptive period started to run on March *0, &00>, it already expired by
May &0, &011.
(@) !ouble taxation in its general sense means taxing the same sub2ect twice during the same taxing period. "n
this sense, double taxation
(A) violates substantive due process.
(B) does not violate substantive due process.
() violates the right to e+ual protection.
(!) does not violate the right to e+ual protection.
(10) )he payor of passive income sub2ect to final tax is re+uired to withhold the tax from the payment due the
recipient. )he withholding of the tax has the effect of
(A) a final settlement of the tax liability on the income.
(B) a credit from the recipient:s income tax liability.
() consummating the transaction resulting in an income.
(!) a deduction in the recipient:s income tax return.
(11) $uidant Aesources orporation, a corporation registered in 9orway, has a 30 M< electric power plant in
6an Bose, Batangas. Aside from $uidant:s income from its power plant, which among the following is
considered as part of its income from sources within the .hilippines(
(A) $ains from the sale to an "locos 9orte power plant of generators bought from the Cnited 6tates.
(B) "nterests earned on its dollar deposits in a .hilippine ban/ under the Dxpanded 7oreign urrency
!eposit 6ystem.
() !ividends from a two5year old 9orwegian subsidiary with operations in Eambia but derives ;04 of
its gross income from the .hilippines.
(!) Aoyalties from the use in Bra%il of generator sets designed in the .hilippines by its engineers.
(1&) )ong 6io/, a hinese billionaire and a anadian resident, died and left assets in hina valued at .>0
billion and in the .hilippines assets valued at .&0 billion. 7or .hilippine estate tax purposes the allowable
deductions for expenses, losses, indebtedness, and taxes, property previously taxed, transfers for public use,
and the share of his surviving spouse in their con2ugal partnership amounted to .13 billion. )ong:s gross estate
for .hilippine estate tax purposes is
(A) .&0 billion.
(B) .3 billion.
() .100 billion.
(!) .>3 billion.
(1*) An/tryd, "nc., bought a parcel of land in &00@ for .= million as part of its inventory of real properties. "n
&010, it sold the land for .1& million which was its %onal valuation. "n the same year, it incurred a loss of .;
million for selling another parcel of land in its inventory. )hese were the only transactions it had in its real estate
business. <hich of the following is the applicable tax treatment(
(A) An/tryd shall be sub2ect to a tax of ;4 of .1& million.
(B) An/tryd could deduct its .; million loss from its .3 million gain.
() An/tryd:s gain of .3 million shall be sub2ect to the holding period.
(!) An/tryd:s .; million loss could not be deducted from its .3 million gain.
(1,) Aplets orporation is registered under the laws of the Firgin "slands. "t has extensive operations in
6outheast Asia. "n the .hilippines, "ts products are imported and sold at a mar/5up by its exclusive distributor,
-im:s )rading, "nc. )he B"A compiled a record of all the imports of -im from Aplets and imposed a tax on Aplets
net income derived from its exports to -im. "s the B"A correct(
(A) 8es. Aplets is a non5resident foreign corporation engaged in trade or business in the .hilippines.
(B) 9o. )he tax should have been computed on the basis of gross revenues and not net income.
() 9o. Aplets is a non5resident foreign corporation not engaged in trade or business in the
.hilippines.
(!) 8es. Aplets is doing business in the .hilippines through its exclusive distributor -im:s )rading. "nc.
(13) "n &00@, 6prat%, "nc.'s net profit before tax was .*3 million while its operating expenses was .*1 million.
"n &010, its net profit before tax was .,0 million and its operating expenses was .*> million. "t did not declare
dividends for &00@ and &010. And it has no proposed capital expenditures for &011 and the immediate future.
May 6prat% be sub2ect to the improperly accumulated tax on its retained profits for &00@ and &010(
(A) 8es, since the accumulated amounts are reasonable for operations in relation to what it usually
needed annually.
(B) 8es, since the accumulation is not reasonably necessary for the immediate needs of the business.
() 9o, because there is no showing that the taxpayer:s &00@ and &010 net profit before tax exceeded
its paid5up capital.
(!) 9o, because the taxpayer is not shown to be a publicly5listed corporation, a ban/, or an insurance
company.
(1;) )he actual effort exerted by the government to effect the exaction of what is due from the taxpayer is
/nown as
(A) assessment.
(B) levy.
() payment.
(!) collection.
(1=) Although the power of taxation is basically legislative in character, it is 9?) the function of ongress to
(A) fix with certainty the amount of taxes.
(B) collect the tax levied under the law.
() identify who should collect the tax.
(!) determine who should be sub2ect to the tax.
(1>) .assive income includes income derived from an activity in which the earner does not have any
substantial participation. )his type of income is
(A) usually sub2ect to a final tax.
(B) exempt from income taxation.
() taxable only if earned by a citi%en.
(!) included in the income tax return.
(1@) "n &010, Buliet Clbod earned .300,000.00 as income from her beauty parlor and received .&30,000.00 as
hristmas gift from her spinster aunt. 6he had no other receipts for the year. 6he spent .130,000.00 for the
operation of her beauty parlor. 7or tax purposes, her gross income for &010 is
(A) .=30,000.00.
(B) .300,000.00.
() .*30,000.00.
(!) .;00,000.00.
(&0) Dxempted from donor's taxation are gifts made
(A) for the use of the barangay.
(B) in consideration of marriage.
() to a school which is a stoc/ corporation.
(!) to a for5profit government corporation.
(&1) 7ederico, a 7ilipino citi%en, migrated to the Cnited 6tates some six years ago and got a permanent
resident status or green card. 1e should pay his .hilippine income taxes on
(A) the gains derived from the sale in alifornia, C.6.A. of 2ewelry he purchased in the .hilippines.
(B) the proceeds he received from a .hilippine insurance company as the sole beneficiary of life
insurance ta/en by his father who died recently.
() the gains derived from the sale in the 9ew 8or/ 6toc/ Dxchange of shares of stoc/ in .#!), a
.hilippine corporation.
(!) dividends received from a two year old foreign corporation whose gross income was derived solely
from .hilippine sources.
(&&) An example of a tax where the concept of progressivity finds application is the
(A) income tax on individuals.
(B) excise tax on petroleum products.
() value5added tax on certain articles.
(!) amusement tax on boxing exhibitions.
(&*) A corporation may change its taxable year to calendar or fiscal year in filing its annual income tax return,
provided
(A) it see/s prior B"A approval of its proposed change in accounting period.
(B) it simultaneously see/s B"A approval of its new accounting period.
() it should change its accounting period two years prior to changing its taxable year.
(!) its constitution and by5laws authori%es the change.
(&,) <hat is the rule on the taxability of income that a government educational institution derives from its
school operations( 6uch income is
(A) sub2ect to 104 tax on its net taxable income as if it is a proprietary educational institution.
(B) Dxempt from income taxation if it is actually, directly, and exclusively used for educational
purposes.
() sub2ect to the ordinary income tax rates with respect to incomes derived from educational activities.
(!) Dxempt from income taxation in the same manner as government5owned and controlled
corporations.
(&3) <hich among the following reduces the gross estate (not the net estate) of a citi%en of the .hilippines for
purposes of estate taxation(
(A) )ransfers for public use
(B) .roperty previously taxed
() 6tandard deduction of .1 million
(!) apital of the surviving spouse
(&;) -a .edring Matibag, a sole proprietor, buys and sells G/umot at /ulamboG both of which are sub2ect to
value5added tax. 6ince he is using the calendar year as his taxable year, his taxable +uarters end on the last
day of March, Bune, 6eptember, and !ecember. <hen should -a .edring file the FA) +uarterly return for his
gross sales or receipts for the period of Bune 1 to 6eptember *0(
(A) <ithin &3 days from 6eptember *0
(B) <ithin ,3 days from 6eptember *0
() <ithin 13 days from 6eptember *0
(!) <ithin *0 days from 6eptember *0
(&=) "n Banuary &011, the B"A issued a ruling that lemen:s vod/a imports were not sub2ect to increased excise
tax based on his claim that his net retail price was only .&00 per =30 milliliter bottle. )his ruling was applied to
his imports for May, Bune, and Buly &011. "n 6eptember &011, the B"A revo/ed its ruling and assessed him for
deficiency taxes respecting his May, Bune and Buly &011 vod/a imports because it discovered that his net retail
price for the vod/a was .&30 per bottle from Banuary to 6eptember &011. !oes the retroactive application of
the revocation violate lemen:s right to due process as a taxpayer(
(A) 8es, since the presumption is that the B"A ascertained the facts before it made its ruling.
(B) 9o, because he acted in bad faith when he claimed a lower net retail price than what he actually
used.
() 9o, since he could avail of remedies available for disputing the assessment.
(!) 8es, since he had already ac+uired a vested right in the favorable B"A ruling.
(&>) !on 7ortunato, a widower, died in May, &011. "n his will, he left his estate of .100 million to his four
children. 1e named his compadre, !on Dpitacio, to be the administrator of the estate. <hen the B"A sent a
demand letter to !on Dpitacio for the payment of the estate tax, he refused to pay claiming that he did not
benefit from the estate, he not being an heir. 7orthwith, he resigned as administrator. As a result of the
resignation, who may be held liable for the payment of the estate tax(
(A) !on Dpitacio since the tax became due prior to his resignation.
(B) )he eldest child who would be reimbursed by the others.
() All the four children, the tax to be divided e+ually among them.
(!) )he person designated by the will as the one liable.
(&@) ?n Buly *1, &011, Dsperan%a received a preliminary assessment notice from the B"A demanding that she
pays .1>0,000.00 deficiency income taxes on her &00@ income. 1ow many days from Buly *1, &011 should
Dsperan%a respond to the notice(
(A) 1>0 days.
(B) *0 days.
() ;0 days.
(!) 13 days.
(*0) )he B"A could not avail itself of the remedy of levy and distraint to implement, through collection, an
assessment that has become final, executory, and demandable where
(A) the sub2ect of the assessment is an income tax.
(B) the amount of the tax involved does not exceed .100.00.
() the corporate taxpayer has no other uncollected tax liability.
(!) the taxpayer is an individual compensation income earner.
(*1) Alain !escartes, a 7rench citi%en permanently residing in the .hilippines, received several items during the
taxable year. <hich among the following is 9?) sub2ect to .hilippine income taxation(
(A) onsultancy fees received for designing a computer program and installing the same in the
6hanghai facility of a hinese firm.
(B) "nterests from his deposits in a local ban/ of foreign currency earned abroad converted to
.hilippine pesos.
() !ividends received from an American corporation which derived ;04 of its annual gross receipts
from .hilippine sources for the past = years.
(!) $ains derived from the sale of his condominium unit located in )he 7ort, )aguig ity to another
resident alien.
(*&) "ncome is considered reali%ed for tax purposes when
(A) it is recogni%ed as revenue under accounting standards even if the law does not do so.
(B) the taxpayer retires from the business without approval from the B"A.
() the taxpayer has been paid and has received in cash or near cash the taxable income.
(!) the earning process is complete or virtually complete and an exchange has ta/en place.
(**) <hich among the following circumstances negates the prima facie presumption of correctness of a B"A
assessment(
(A) )he B"A assessment was seasonably protested within *0 days from receipt.
(B) 9o preliminary assessment notice was issued prior to the assessment notice.
() .roof that the assessment is utterly without foundation, arbitrary, and capricious.
(!) )he B"A did not include a formal letter of demand to pay the alleged deficiency.
(*,) ?n March *0, &003 Miguel 7oods, "nc. received a notice of assessment and a letter of demand on its April
13, &00& final ad2ustment return from the B"A. Miguel 7oods then filed a re+uest for reinvestigation together
with the re+uisite supporting documents on April &3, &003. ?n Bune &, &003, the B"A issued a final assessment
reducing the amount of the tax demanded. 6ince Miguel 7oods was satisfied with the reduction, it did not do
anything anymore. ?n April 13, &010 the B"A garnished the corporation:s ban/ deposits to answer for the tax
liability. <as the B"A action proper(
(A) 8es. )he B"A has 3 years from the filing of the protest within which to collect.
(B) 8es. )he B"A has 3 years from the issuance of the final assessment within which to collect.
() 9o. )he taxpayer did not apply for a compromise.
(!) 9o. <ithout the taxpayer's prior authority, the B"A action violated the Ban/ !eposit 6ecrecy #aw.
(*3) <hich among the following taxpayers is re+uired to use only the calendar year for tax purposes(
(A) .artnership exclusively for the design of government infrastructure pro2ects considered as practice
of civil engineering.
(B) Boint5stoc/ company formed for the purpose of underta/ing construction pro2ects.
() Business partnership engaged in energy operations under a service contract with the government.
(!) Boint account (cuentas en participacion) engaged in the trading of mineral ores.
(*;) 6panflex "nt'l "nc. received a notice of assessment from the B"A. "t seasonably filed a protest with all the
necessary supporting documents but the B"A failed to act on the protest. )hirty days from the lapse of 1>0 days
from the filing of its protest, 6panflex still has not elevated the matter to the )A. <hat remedy, if any, can
6panflex ta/e(
(A) "t may file a motion to admit appeal if it could prove that its failure to appeal was due to the
negligence of counsel.
(B) "t may no longer appeal since there is no B"A decision from which it could appeal.
() "t may wait for the final decision of the B"A on his protest and appeal it to the )A within *0 days
from receipt of such decision.
(!) 9one. "ts right to appeal to the )A has prescribed.
(*=) $erardo died on Buly *1, &011. 1is estate tax return should be filed within
(A) six months from filing of the notice of death.
(B) sixty days from the appointment of an administrator.
() six months from the time he died on Buly *1, &011.
(!) sixty days from the time he died on Buly *1, &011.
(*>) "ncome from dealings in property (real, personal, or mixed) is the gain or loss derived
(A) only from the cash sales of property.
(B) from cash and gratuitous receipts of property.
() from sale and lease of property.
(!) only from the sale of property.
(*@) "n March &00@, )onette, who is fond of 2ewelries, bought a diamond ring for .=30,000.00, a bracelet for
.&30,000.00, a nec/lace for .300,000.00, and a brooch for .300,000.00. )onette derives income from the
exercise of her profession as a licensed .A. "n ?ctober &00@, )onette sold her diamond ring, bracelet, and
nec/lace for only .1.&3 million incurring a loss of .&30,000.00. 6he used the .1.&3 million to buy a solo
diamond ring in 9ovember &00@ which she sold for .1.3 million in 6eptember &010. )onette had no other
transaction in 2ewelry in &010. <hich among the following describes the tax implications arising from the above
transactions(
(A) )onette may deduct his &00@ loss only from her &00@ professional income.
(B) )onette may carry over and deduct her &00@ loss only from her &010 gain.
() )onette may carry over and deduct her &00@ loss from her &010 professional income as well as
from her gain.
(!) )onette may not deduct her &00@ loss from both her &010 professional income and her gain.
(,0) Anion, "nc. received a notice of assessment and a letter from the B"A demanding the payment of .* million
pesos in deficiency income taxes for the taxable year &00>. )he financial statements of the company show that
it has been suffering financial reverses from the year &00@ up to the present. "ts asset position shows that it
could pay only .300,000.00 which it offered as a compromise to the B"A. <hich among the following may the
B"A re+uire to enable it to enter into a compromise with Anion, "nc.(
(A) Anion must show it has faithfully paid taxes before &00@.
(B) Anion must promise to pay its deficiency when financially able.
() Anion must waive its right to the secrecy of its ban/ deposits.
(!) Anion must immediately deposit the .300,000.00 with the B"A.
(,1) Aeal property owned by the national government is exempt from real property taxation unless the national
government
(A) transfers it for the use of a local government unit.
(B) leases the real property to a business establishment.
() gratuitously allows its use for educational purposes by a school established for profit.
(!) sells the property to a government5owned non5profit corporation.
(,&) !ondon and 1elena were legally separated. )hey had six minor children, all +ualified to be claimed as
additional exemptions for income tax purposes. )he court awarded custody of two of the children to !ondon
and three to 1elena, with !ondon directed to provide full financial support for them as well. )he court awarded
the ;th child to !ondon:s father with !ondon also providing full financial support. Assuming that only !ondon is
gainfully employed while 1elena is not, for how many children could !ondon claim additional exemptions when
he files his income tax return(
(A) 6ix children.
(B) 7ive children.
() )hree children.
(!) )wo children.
(,*) .olitical campaign contributions are 9?) deductible from gross income
(A) if they are not reported to the ommission on Dlections.
(B) if the candidate supported wins the election because of possible corruption.
() since they do not help earn the income from which they are to be deducted.
(!) since such amounts are not considered as income of the candidate to whom given.
(,,) <hen a B"A decision affirming an assessment is appealed to the )A, the B"A:s power to garnish the
taxpayer:s ban/ deposits
(A) is suspended to await the finality of such decision.
(B) is suspended given that the )A can reverse B"A decisions when pre2udicial to the taxpayer.
() is not suspended because only final decisions of the B"A are sub2ect to appeal.
(!) is not suspended since the continued existence of government depends on tax revenues.
(,3) Aeal property taxes should not disregard increases in the value of real property occurring over a long
period of time. )o do otherwise would violate the canon of a sound tax system referred to as
(A) theoretical 2ustice.
(B) fiscal ade+uacy.
() administrative feasibility.
(!) symbiotic relationship.
(,;) )he power to tax is the power to destroy. "s this always so(
(A) 9o. )he Dxecutive Branch may decide not to enforce a tax law which it believes to be confiscatory.
(B) 8es. )he tax collectors should enforce a tax law even if it results to the destruction of the property
rights of a taxpayer.
() 8es. )ax laws should always be enforced because without taxes the very existence of the 6tate is
endangered.
(!) 9o. )he 6upreme ourt may nullify a tax law, hence, property rights are not affected.
(,=) Beopardy assessment is a valid ground to compromise a tax liability
(A) involving deficiency income taxes only, but not for other taxes.
(B) because of doubt as to the validity of the assessment.
() if the compromise amount does not exceed 104 of the basic tax.
(!) only when there is an approval of the 9ational Dvaluation Board.
(,>) Eygomite Minerals, "nc., a corporation registered and holding office in Australia, not operating in the
.hilippines, may be sub2ect to .hilippine income taxation on
(A) gains it derived from sale in Australia of an ore crusher it bought from the .hilippines with the
proceeds converted to pesos.
(B) gains it derived from sale in Australia of shares of stoc/ of .hilex Mining orporation, a .hilippine
corporation.
() dividends earned from investment in a foreign corporation that derived ,04 of its gross income
from .hilippine sources.
(!) interests derived from its dollar deposits in a .hilippine ban/ under the Dxpanded 7oreign
urrency !eposit 6ystem.
(,@) As a general rule, within what period must a taxpayer elevate to the ourt of )ax Appeals a denial of his
application for refund of income tax overpayment(
(A) <ithin *0 days from receipt of the ommissioner's denial of his application for refund.
(B) <ithin *0 days from receipt of the denial which must not exceed & years from payment of income
tax.
() <ithin & years from payment of the income taxes sought to be refunded.
(!) <ithin *0 days from receipt of the denial or within two years from payment.
(30) After the province has constructed a barangay road, the 6angguniang .anglalawigan may impose a
special levy upon the lands specifically benefitted by the road up to an amount not to exceed
(A) ;04 of the actual cost of the road without giving any portion to the barangay.
(B) 1004 of the actual pro2ect cost without giving any portion to the barangay.
() 1004 of the actual pro2ect cost, /eeping ;04 for the province and giving ,04 to the barangay.
(!) ;04 of the actual cost, dividing the same between the province and the barangay.
(31) elia donated .110,000.00 to her friend Fictoria who was getting married. elia gave no other gift during
the calendar year. <hat is the donor:s tax implication on elia's donation(
(A) )he .100,000.00 portion of the donation is exempt since given in consideration of marriage.
(B) A .10,000.00 portion of the donation is exempt being a donation in consideration of marriage.
() elia shall pay a *04 donor:s tax on the .110,000.00 donation.
(!) )he .100,000.00 portion of the donation is exempt under the rate schedule for donor:s tax.
(3&) #evox orporation wanted to donate .3 million as pri%e money for the world professional billiard
championship to be held in the .hilippines. 6ince the Billiard 6ports onfederation of the .hilippines does not
recogni%e the event, it was held under the auspices of the "nternational .rofessional Billiards Association, "nc.
"s #evox sub2ect to the donor:s tax on its donation(
(A) 9o, so long as the donated money goes directly to the winners and not through the association.
(B) 8es, since the national sports association for billiards does not sanction the event.
() 9o, because it is donated as pri%e for an international competition under the billiards association.
(!) 8es, but only that part that exceeds the first .100,000.00 of total #evox donations for the calendar
year.
(3*) A violation of the tariff and customs laws is the failure to
(A) pay the customs duties and taxes and to comply with the rules on customs procedures.
(B) pay the customs duties and taxes or to comply with the rules on customs procedures.
() pay the customs duties and taxes.
(!) comply with the rules on customs procedures.
(3,) <hat is the effect on the tax liability of a taxpayer who does not protest an assessment for deficiency
taxes(
(A) )he taxpayer may appeal his liability to the )A since the assessment is a final decision of the
ommissioner on the matter.
(B) )he B"A could already enforce the collection of the taxpayer:s liability if it could secure authority
from the )A.
() )he taxpayer:s liability becomes fixed and sub2ect to collection as the assessment becomes final
and collectible.
(!) )he taxpayer:s liability remains suspended for 1>0 days from the expiration of the period to protest.
(33) A non5stoc/, non5profit school always had cash flow problems, resulting in failure to recruit well5trained
administrative personnel to effectively manage the school. "n &010, !on #eon donated .100 million pesos to
the school, provided the money shall be used solely for paying the salaries, wages, and benefits of
administrative personnel. )he donation represents less than 104 of !on #eon:s taxable income for the year. "s
he sub2ect to donor:s taxes(
(A) 9o, since the donation is actually, directly, and exclusively used for educational purposes.
(B) 8es, because the donation is to be wholly used for administration purposes.
() 8es, since he did not obtain the re+uisite 9$? certification before he made the donation.
(!) 9o, because the donation does not exceed 104 of his taxable income for &010.
(3;) <hat is the tax base for the imposition by the province of professional taxes(
(A) )hat which ongress determined.
(B) )he pertinent provision of the local $overnment ode.
() )he reasonable classification made by the provincial sanggunian.
(!) )hat which the !ept. of "nterior and #ocal $overnment determined.
(3=) )here is prima facie evidence of a false or fraudulent return where the
(A) tax return was amended after a notice of assessment was issued.
(B) tax return was filed beyond the reglementary period.
() taxpayer changed his address without notifying the B"A.
(!) deductions claimed exceed by *04 the actual deductions.
(3>) )he proceeds received under a life insurance endowment contract is 9?) considered part of gross income
(A) if it is so stated in the life insurance endowment policy.
(B) if the price for the endowment policy was not fully paid.
() where payment is made as a result of the death of the insured.
(!) where the beneficiary was not the one who too/ out the endowment contract.
(3@) )he excess of allowable deductions over gross income of the business in a taxable year is /nown as
(A) net operating loss.
(B) ordinary loss.
() net deductible loss.
(!) 9?#?.
(;0) 9o action shall be ta/en by the B"A on the taxpayer's disputed issues until the taxpayer has paid the
deficiency taxes
(A) when the assessment was issued against a false and fraudulent return.
(B) if there was a failure to pay the deficiency tax within ;0 days from B"A demand.
() if the Aegional )rial ourt issues a writ of preliminary in2unction to en2oin the B"A.
(!) attributable to the undisputed issues in the assessment notice.
(;1) "s an article previously exported from the .hilippines sub2ect to the payment of customs duties(
(A) 8es, because all articles that are imported from any foreign country are sub2ect to duty.
(B) 9o, because there is no basis for imposing duties on articles previously exported from the
.hilippines.
() 8es, because exemptions are strictly construed against the importer who is the taxpayer.
(!) 9o, if it is covered by a certificate of identification and has not been improved in value.
(;&) .rior to the enactment of the #ocal $overnment ode, consumer:s cooperatives registered under the
ooperative !evelopment Act en2oyed exemption from all taxes imposed by a local government. <ith the #ocal
$overnment ode's withdrawal of exemptions, could these cooperatives continue to en2oy such exemption(
(A) 8es, because the #ocal $overnment ode, a general law, could not amend a special law such as
the ooperative !evelopment Act.
(B) 9o, ongress has not by the ma2ority vote of all its members granted exemption to consumers:
cooperatives.
() 9o, the exemption has been withdrawn to level the playing field for all taxpayers and preserve the
#$Cs: financial position.
(!) 8es, their exemption is specifically mentioned among those not withdrawn by the #ocal
$overnment ode.
(;*) Cnder the )ariff and ustoms ode, abandoned imported articles becomes the property of the
(A) government whatever be the circumstances.
(B) insurance company that covered the shipment.
() shipping company in case the freight was not paid.
(!) ban/ if the shipment is covered by a letter of credit.
(;,) -a )ato owns a parcel of land in 6an Bose, Batangas declared for real property taxation, as agricultural. "n
1@@0, he used the land for a poultry feed processing plant but continued to declare the property as agricultural.
"n March &011, the local tax assessor discovered -a )ato's change of use of his land and informed the local
treasurer who demanded payment of deficiency real property taxes from 1@@0 to &011. 1as the action
prescribed(
(A) 9o, the deficiency taxes may be collected within five years from when they fell due.
(B) 9o. )he deficiency taxes for the period 1@@0 up to &011 may still be collected within 10 years from
March &011.
() 8es. More than 10 years had lapsed for the period 1@@0 up to &000, hence the right to collect the
deficiency taxes has prescribed.
(!) 8es. More than 3 years had lapsed for the collection of the deficiency taxes for the period 1@@0 up
to &003.
(;3) .ierre de 6avigny, a 7renchman, arrived in the .hilippines on Banuary 1, &010 and continued to live and
engage in business in the .hilippines. 1e went on a tour of 6outheast Asia from August 1 to 9ovember 3,
&010. 1e returned to the .hilippines on 9ovember ;, &010 and stayed until April 13, &011 when he returned to
7rance. 1e earned during his stay in the .hilippines a gross income of .* million from his investments in the
country. 7or the year &010, .ierre's taxable status is that of
(A) a non5resident alien not engaged in trade or business in the .hilippines.
(B) a non5resident alien engaged in trade or business in the .hilippines.
() a resident alien not engaged in trade or business in the .hilippines.
(!) a resident alien engaged in trade or business in the .hilippines.
(;;) #ualhati Dducational 7oundation, "nc., a stoc/ educational institution organi%ed for profit, decided to lease
for commercial use a 1,300 s+. m. portion of its school. )he school actually, directly, and exclusively used the
rents for the maintenance of its school buildings, including payment of 2anitorial services. "s the leased portion
sub2ect to real property tax(
(A) 8es, since #ualhati is a stoc/ and for profit educational institution.
(B) 9o, since the school actually, directly, and exclusively used the rents for educational purposes.
() 9o, but it may be sub2ect to income taxation on the rents it receives.
(!) 8es, since the leased portion is not actually, directly, and exclusively used for educational
purposes.
(;=) Apparently the law does not provide for the refund of real property taxes that have been collected as a
result of an erroneous or illegal assessment by the provincial or city assessor. <hat should be done in such
instance to avoid an in2ustice(
(A) Huestion the legality of the no5refund rule before the 6upreme ourt.
(B) Dnact a new ordinance amending the erroneous or illegal assessment to correct the error.
() 6ubse+uent ad2ustment in tax computation and the application of the excess payment to future real
property tax liabilities.
(!) .ass a new ordinance providing for the refund of real property taxes that have been erroneously or
illegally collected.
(;>) <hat should the B"A do when the prescriptive period for the assessment of a tax deficiency is about to
prescribe but the taxpayer has not yet complied with the B"A re+uirements for the production of boo/s of
accounts and other records to substantiate the claimed deductions, exemptions or credits(
(A) all the taxpayer to a conference to explain the delay.
(B) "mmediately conduct an investigation of the taxpayer:s activities.
() "ssue a 2eopardy assessment coupled with a letter of demand.
(!) "ssue a notice of constructive distraint to protect government interest.
(;@) Money collected from taxation shall not be paid to any religious dignitary DID.) when
(A) the religious dignitary is assigned to the .hilippine Army.
(B) it is paid by a local government unit.
() the payment is passed in audit by the ?A.
(!) it is part of a lawma/er's por/ barrel.
(=0) !iscriminatory duties may 9?) be imposed upon articles
(A) wholly manufactured in the discriminating country but carried by vessels of another country.
(B) not manufactured in the discriminating country but carried by vessels of such country.
() partly manufactured in the discriminating country but carried by vessels of another country.
(!) not manufactured in the discriminating country and carried by vessels of another country.
(=1) )he taxpayer seasonably filed his protest together with all the supporting documents. "t is already Buly *1,
&011, or 1>0 days from submission of the protest but the B"A ommissioner has not yet decided his protest.
!esirous of an early resolution of his protested assessment, the taxpayer should file his appeal to the ourt of
)ax Appeals not later than
(A) August *1, &011.
(B) August *0, &011.
() August 13, &011.
(!) August 1, &011.
(=&) <hich of the following are 9?) usually imposed when there is a tax amnesty(
(A) ivil, criminal, and administrative penalties
(B) ivil and criminal penalties
() ivil and administrative penalties
(!) riminal and administrative penalties
(=*) <hich among the following concepts of taxation is the basis for the situs of income taxation(
(A) #ifeblood doctrine of taxation
(B) 6ymbiotic relation in taxation
() ompensatory purpose of taxation
(!) 6umptuary purpose of taxation
(=,) "n G?peration -andado,G the B"A temporarily closed business establishments, including 9ew !ynasty
orporation that failed to comply with FA) regulations. 9ew !ynasty contends that it should not be temporarily
closed since it has a valid and existing FA) registration, it faithfully issued FA) receipts, and filed the proper
FA) returns. )he contention may be re2ected if the B"A investigation reveals that
(A) the taxpayer has not been regularly filing its income tax returns for the past , years.
(B) the taxpayer deliberately filed a false and fraudulent return with deliberate intention to evade taxes.
() the taxpayer used falsified documents to support its application for refund of taxes.
(!) there was an understatement of taxable sales or receipts by *04 or more for the taxable +uarter.
(=3) )he head priest of the religious sect )res .ersonas 6olo !ios, as the corporation sole, rented out a 3,000
s+. m. lot registered in its name for use as school site of a school organi%ed for profit. )he sect used the rentals
for the support and up/eep of its priests. )he rented lot is
(A) not exempt from real property taxes because the user is organi%ed for profit.
(B) exempt from real property taxes since it is actually, directly, and exclusively used for religious
purposes.
() not exempt from real property taxes since it is the rents, not the land, that is used for religious
purposes.
(!) exempt from real property taxes since it is actually, directly, and exclusively used for educational
purposes.