MODULE 1

1. The levying and imposition of tax and the collection of tax are processes which
constitute the taxation system.
 Aspects of Taxation
2. Which of the following is not a characteristics of a tax?
 It is imposed not inside the state’s territory.
3. If a taxpayer owes something to the government by way of taxes, and the
government has a debt which it has to pay to the taxpayer, set-off or
compensation is allowed.
 False
4. The free exercise of religious profession and worship is superior to the power of
taxation.
 True
5. Which of the following theory justifies taxes being a preferred credit?
 Lifeblood Doctrine
6. Which statement is wrong?
 The power of taxation may be exercised by the government, its political
subdivisions, and public utilities.
7. The commissioner of internal revenue is granted certain powers under the tax
code. Which of the following is not a power granted to the commissioner under
the code?
 None of the choices (National Defense, Public education, Improvement of
sugar industry)
8. The commissioner of internal revenue is granted certain powers under the tax
code. Which of the following is not a power granted to the commissioner under
the code?
 Enact tax laws and make amendments
9. Which of the following taxes is a personal tax or a tax imposed on person?
 Community tax
10. The 30% corporate income tax is increased to 35% by the congress for the
purpose of raising revenue to be used for national road expansion project near
bonifacio global city, a private corporation. Is the exercise of the taxing power
unconstitutional?
 No, because it is exercised directly for public purpose and the benefit to a
private entity is only incidental.

11. A BIR ruling may be classified as a/an

  Administrative interpretation
12. Where does taxing power of the provinces, municipalities and cities precede
from?
 Constitutional grant
13. Being legislative in nature, the power to tax may not be delegated except:
 To local gov. or political subdivisions, when allowed by the constitution,
when delegations relates merely to administrative implementation that
may call for some degree of discretionary powers under a set of sufficient
standards expressed by law or implied from the policy and purpose of the
act (All of the choices)
14. On January 1, 2017, the congress enacted a law increasing the corporate income
tax from 30% to 40%. The law provides retroactive effect starting January 1, 2010.
The Philippine chamber of commerce questions the validity of the law. Is the law
constitutional?
 No, because the 405 interest rate is violation of due process of law for
being excessive and unreasonable.
15. One of the following is not a characteristics or element of tax.
 It is payable in money or in kind.
16. Eminent domain
 Is the power to take private property for public purpose after payment of
just compensation.
17. Taxpayers should be treated equally both in terms of rights conferred and
obligations imposed.
 Equal protection of law
18. Which of the following doctrine or theory is called “Doctrine of Symbiotic
Relationship?”
 Benefits-received theory
19. Which of the following statements is incorrect?
 Charitable institutions, churches, and parsonages, or converts appurtenant
thereto, mosques, non-profit cemeteries, and all lands buildings, and
improvements, actually, directly and exclusively used for religious,
charitable, or educational purposed shall be exempt from income taxation.
All revenues, and assets of educational institutions used actually, directly,
and exclusively for educational purposed shall be exempt from taxes and
duties. (Both A and B)
20. Which of the following is incorrect?
 None of the above (Taxes may be imposed retroactively by law by unless
so expressed by such law, these taxes must only be imposed
prospectively. Tax laws are neither political nor penal in nature. The “ex
post facto” rule is not applicable in taxation.)
21. Which of the following taxes is property classified as indirect tax?
 Value added tax
22. They exist independent of the constitution being fundamental power of the state,
except
 Power of recall
23. Which of the following statements is not correct?
 Interpretation of tax laws is done by the legislative branch of the
government
24. Levying of local government taxes may be exercised by:
 The legislative branch of the local government only
25. Without taxes, the government would be paralyzed for lack of the motive power
to activate and operate it.
 Lifeblood Doctrine
26. Below are some of the similarities among the three inherent powers of the state,
except
 They are superior to the non-impairment clause
27. How will the local government units be able to exercise their taxing powers?
 By local legislation
28. Which of the following is classified as a local tax?
 Professional tax
29. Which of the following is an example of the state’s exercise of police power?
 Congress’ prohibition of illegally copying pirated movies.
30. Which statement is wrong?
 A special assessment is a tax.
31. In this type of tax, non-payment is constitutionally exempted from
imprisonment.
 Poll tax
32. Which of the following inherent powers of the state is inferior to constitutional
right of non-impairment of obligation of contracts?
 Power of taxation
33. One of the principles of a sound tax system, the essence of which is
“convenience”.
 Administrative feasibility
34. Which of the following individual taxpayers is not covered by progressive tax?
 Non- resident alien not engaged in trade
35. Which of the following is a characteristics of tax? The amount to be collected is
limited to the cost of regulation.
 It is an enforced contribution.
36. The following are the secondary purpose of taxation, except;
 To raise revenue for the government to provide funds and property with
which to promote the general welfare and the protection of its citizen and
to enable it to finance its multifarious activities.
37. Tax the rate of which decreases as the tax base or bracket increases.
 Regressive
38. The following are remedies for double taxation, except
 Tax amnesty
39. The least source of tax laws.
 Revenue regulations
40. What is the primary purpose of taxation power?
 To raise revenues for the expenses of the state
41. Which of the following is incorrect description of taxation?
 Supreme and absolute power of the state
42. Tax dodging is commonly known as
 Tax evasion
43. No law granting any tax exemption shall be passed without the concurrence of
 Majority of all members of congress
44. Statement 1: The constitution is the source of the state’s taxing power.
Statement 2: The police power of the government may be exercised through
taxation.
 Only statement 2 is correct.
45. Assessment is one of the stages of taxation and is essentially legislative in
character.
 False
46. The power of taxation is comprehensive. It covers persons, businesses, activities,
professions, rights, and privileges.
 True
47. The congress consists of the senate (lower house) and the house of
representatives (upper house).
 False
48. The revenue and assets of non-stock, non-profit educational institutions are
exempted from both direct and indirect tax.
 False
49. Taxation is the act of collecting a tax to apportion the cost of government among
those who, in some measure, are privileged to enjoy its benefits and must
therefore bear its burden.
 False
 50. The power of taxation is inherent in sovereignty. It may be exercised although it
is not expressly granted by the constitution.
 True

MODULE 2
1. It is an official document that empowers a Revenue Officer (RO) to examine and
scrutinize a taxpayer’s books of accounts and other accounting records, in order
to determine the taxpayer’s correct internal revenue tax liabilities.
 Letter of Authority (LA)
2. Statement 1: A preliminary assessment notice (PAN) need not be in writing.
Statement 2: If voluntary payments are made prior to the issuance of PAN, then a
PAN need not be issued.
 Only statement 2 is true.
3. A Final Assessment Notice (FAN) shall be issued within ______ after the
expiration of the period to file the reply to the PAN or after receipt of the reply to
the PAN.
 15 days
4. In which of the following tax assessment cases is prior preliminary assessment
notice necessary for the validity of final assessment notice?
 When a non-VAT registered person issues a VAT-Official Receipt or sales
invoice in a VAT-exempt transaction.
5. Within how many days must additional supporting documents be submitted?
 60 das from filing of a request for reinvestigation.
6. When the administration and collection costs involved do not justify the
collection of the amount due, the tax due may be:
 Abated
7. What is the prescriptive period in cases of fraudulent filing?
 10 years from discovery of fraud.
8. What is the minimum compromise rate if the ground for compromise is financial
incapacity?
 10% of the basic assessed tax
9. Lea Company files its annual income tax return for the calendar year 2020 on
April 12, 2021. The BIR assessed Lea of deficiency taxes on April 14, 2024,
without alleging fraud. Lea, in its protest, contended that the period for BIR
assess has already been prescribed. Is Lea correct?
 No, the right of BIR to assess will only prescribed on April 15, 2024.

10. Statement 1: An assessment can be orally made.

 Statement 2: An assessment should contain the law and the facts on which the
assessment is based.
 Only statement 2 is true.
11. Which kind of protest requires the submission of additional supporting
documents?
 Request for reinvestigation
12. Statement 1: If the taxpayer cannot be located in the address given to him in his
return, the period of prescription is tolled.
Statement 2: If the taxpayer is out of the Philippines, the period of prescription is
tolled.
 Both statements are true.
13. It is defined as the contract between the government and the taxpayer to settle
the liability at a lower amount.
 Compromise
14. What is the prescriptive period for assessing taxes?
 3 years from due date or actual filing, whichever is later.
15. Upon notice of an adverse decision by the court of tax appeals division, the
taxpayer must file:
 A motion for reconsideration or motion for new trial within 15 days to the
court of tax appeals division.
16. Red Corp. received an assessment notice from the BIR on 9 April 2021, assessing
the corporation of deficiency income taxes for taxable year 2017. Red Corp.
follows the calendar year. and Red Corp. has filed its annual income tax return
for the year 2017 on 7 April 2018. The BIR has sent the assessment notice on 5
April 2021 but was only received by the taxpayer 9 April 2021. Has the
assessment prescribed?
 No. The assessment is set to prescribe on 15 April 2021, and the BIR was
able to send the assessment notice on 5 April 2021.
17. The computation of deficiency interest is reckoned from:
 Deadline for the payment of the tax due
18. This occurs when self-assessed tax per return filed by the taxpayer on the
prescribed date was not paid at all or only partially paid.
 Delinquency tax
19. Which of the following is a ground for compromise?
 A reasonable doubt as to the validity of the claim against the taxpayer
exists.
20. The rate of interest for late payment of taxes is set by the law at:
 12%
21. All of the following would necessitate the imposition of the 50% surcharge,
except
 Failure to file with the proper internal revenue officer
22. In which of the following cases will a PAN not be required?
 There is a mathematical error in the computation of taxes
23. The court of appeals is composed of a presiding justice and _____ associate
justices.
 Eight
24. When will tax surcharge amounting to 50% of tax due be imposed?
 In case of false or fraudulent return is willfully made.
25. What is the prescriptive period of assessment of tax in case of false or fraudulent
returns?
 Within 10 years from the discovery of falsity or fraud.
26. Which of the following can be the subject of a collection suit immediately,
without the need of a prior assessment?
 Delinquency tax
27. Which of the following is not an administrative remedy of BIR commissioner to
collect tax?
 Civil case to collect a sum of money
28. It refers to the pleading filed by the taxpayer in response to the preliminary
assessment notice issued by BIR Commissioner request for reconsideration.
 Reply
29. Which of the following tax cases may be the subject matter of compromise
agreement?
 Criminal tax case not yet filed in court
30. What are the two kinds of interest under the tax code?
 Deficiency and delinquency interest
31. In case the supreme court en banc denies the appeal, the taxpayer has no more
remedy.
 False
32. In which scenario is previous issuance of preliminary assessment notice
mandatory for the validity of the issued final assessment notice with formal letter
of demand?
 When the tax deficiency pertains to value added tax
33. Which of the following documents issued by BIR Commissioner must be duly
protested by the taxpayer to prevent the finality assessment?
 Final assessment notice with formal letter of demand
34. Which type of formal protest filed by a taxpayer before BIR Commissioner
requires the taxpayer to submit documentary evidence to BIR Commissioner?
 Request for reinvestigation
35. Which of the following is a ground for abatement of tax?
 The tax appears to be unjustly or excessively assessed
36. What is the prescriptive period for collection of national internal revenue taxes?
 Within 5 years from the finality of assessment of tax
37. Which court has the authority to issue injunction to enjoin collection of national
tax?
 Court of tax appeals
38. Which court may enjoin the collection of national internal revenue taxes?
 Neither A or B (court of tax appeals, supreme court)
39. Upon receipt of the protest in a request for reconsideration, within how many
days must the duly authorized representative of the commissioner of internal
revenue decide?
 180 days
40. Under the NIRC, which of the following government office has the power to
cancel a tax liability?
 BIR Commissioner
41. Where the basic tax involved exceeds 1M, who has the authority to approve the
tax compromise?
 NEB consisting of BIR Commissioner and 4 deputy commissioners
42. Notice of informal conference was previously called a notice of discrepancy.
 False
43. Within how many days should a taxpayer protest to the FAN?
 30 days
44. Within how many days should a taxpayer reply to the PAN?
 15 days
45. Which of the following may be subject to writ of garnishment by the BIR
Commissioner?
 Bank deposit
46. What is the minimum compromise rate equivalent if the ground for tax
compromise is based on reasonable doubt as to the validity of assessment?
 At least 40% of basic assessed tax
47. What is the remedy available to the taxpayer if the 180-day period given by law
to BIR Commissioner to decide on the formal protest filed by the taxpayer has
already lapsed without any action on the part of the BIR Commissioner?
 Either A or B (wait for the decision of BIR Commissioner. Appeal before
the CTA Division within 30 days from the lapse of the 180-day period.)
 48. Which of the following is a valid ground for tax abatement or cancellation by BIR
Commissioner?
 The administration and collection costs involved do not justify the
collection of the amount due.
49. Broadly defined, this informs the taxpayer that he or she has tax liabilities.
 Assessment
50. What is the prescriptive period for ordinary assessment by the BIR
Commissioner of NIRT?
 Within 3 years from the last date of filing of tax return required by law or
actual date of filing if tax return, whichever is later.

MODULE 3
1. Persons registering under E.O 98 are those individuals who are securing TIN to
be able to transact with other government offices such as LTO, NBI, DFA and
others.
 True
2. OCWs shall use the BIR Form No. 1904 when applying for BIR registration as a
ONETT taxpayer.
 False
3. A taxpayer who is engaged in vatable activities, but the gross sales or receipts
from business or practice of profession is 3M or below, is required to register as
Vat taxpayer.
 False
4. Taxpayers are required to register every year and pay the registration fee of 500
annually.
 False
5. Self-employed and mixed income individuals should use the BIR Form No. 1902
in filing their application for registration to BIR.
 False
6. A business arrangement in which two or more parties agreed to pool their
resources for the purpose of accomplishing a specific task. This task can be a new
project or any other business activity.
 Joint venture
7. Taxpayers are not allowed to pay the annual registration fee after January 31
every year.
 False
8. Non-resident aliens and non-resident foreign corporations receiving income
from sources within the Philippines are not required to register with the BIR.
 False
9. How much is the compromise penalty for the issuance of receipts that do not
truly reflect and/or contain all the information required to be shown therein?
 1,000 as first offense
10. Employees, ONETT taxpayers, and/or persons who have secured a TIN under
E.O 98, series of 1998 with the BIR are not required to have a certificate of
registration.
 True
11. The original copy of COR and the duly validated BIR Form 0605 as proof of
payment of ARF are required to be displayed in any suspicious place in the head
office and branch office.
 False
12. Technically, loose-leaf books of accounts are still a “manual” form of maintaining
company books in the Philippines.
 True
13. What is the compromise penalty (first offense) if the duplicate copy of the
invoices is blank but the original copy thereof is detached from the booklet?
 10,000
14. When registering loose-leaf books of accounts to BIR, a permit to use loose leaf
books of accounts is needed.
 True
15. Marginal income earners are not required to pay the annual registration fee.
 True
16. For subsequent registration or renewal of books, taxpayers shall accomplish BIR
Form No. 1905 and submit at the RDO or concerned office under the large
taxpayer service having jurisdiction over the place where the head office and
branch is located, respectively.
 True
17. It is necessary for a taxpayer to register/stamp a new set of manual books of
accounts each and every year.
 False
18. BIR Form No. 1905 is for application for registration information
update/correction/cancellation.
 True
19. Taxpayers transferring business addresses within the year either within the same
district or to another district are not required to pay an annual registration fee of
500.
 False
20. All persons who are engaged in business shall secure from the BIR an authority
to print receipts or sales or commercial invoices before a printer can print the
same.
 True
21. For printing or causing, aiding or abetting the printing of double or multiple sets
of receipts or invoices, the amount of compromise penalty for the first offense
and second offense, respectively, are ____________
 Not subject to compromise and not subject to compromise
22. The following are the documentary requirements for application for authority to
print, except
 Any booklet from the last issued ATP for initial application
23. Any person, whether natural or juridical, required under the authority of the IRC
to make, render or file to return, statement or other documents, shall be supplied
with or assigned a TIN to be indicated in the return, statement or document to
be filed with the BIR for his proper identification for tax purpose (Sec. 236 (i) of
the tax code).
 True
24. The amount of compromise penalty for failure to issue receipts or sales or
commercial invoices is
 10,000 as first offense
25. For those individuals who earn purely professional income, they shall submit an
accomplished BIR Form No. 1902 for their BIR registration application.
 False
26. For possession or use of unregistered receipts or invoices, what is the
compromise penalty for the second offense?
 20,000
27. A unique and permanent number issued by the BIR to an individual or
organization to ensure that they pay correct taxes on time. It’s used for properly
identifying the taxpayer when filing tax returns and tracking tax obligations and
payments.
 Tax identification number
28. The BIR Form No. 1900 is for
 Application for authority to use computerized accounting system or
components thereof/ loose leaf books of accounts
29. What tax form is needed for application for registration information
update/correction/cancellation is?
 BIR Form No. 1905
30. ____ is a legal document used in the Philippines which authorizes another
person to do things on an individual’s behalf.
 Special power of attorney
 31. Who will issue the COR?
 The RDO having jurisdiction of the head office or branch
32. BIR Form No. 1903 is the applicable tax form to use for applying for registration
for non-taxable partnerships.
 True
33. For failure of the printer o submit the required quarterly report under Sec. 238 of
the tax code as amended, the compromise penalty as first offense is,
 1,000
34. After registration, the BIR shall not issue a COR to the following, except
 Self-employed individuals
35. The following are required to register without paying the annual registration fee,
except
 Stock corporations
36. The use of unregistered cash register machines in lieu of invoices or receipts is
subject to what kind of penalty and how much?
 Compromise penalty of 25,000 as first offense and 50,000 as second offense
37. The following are the three types of books of accounts in the Philippines, except
 Excel books of accounts
38. Statement 1: The possession or use of multiple or double receipts or invoices is
not subject to compromise penalty.
Statement 2: The possession or use of multiple or double receipts or invoices is
not subject to any penalty, provided that such receipts or invoices are duly registered
with and approved by BIR.

 Both statements are true.

39. An organization in a subdivision, planned community or condominium building
that makes and enforces rules for the properties and residents.
 Homeowner’s association
40. In filing the application for BIR registration for estates under judicial settlement,
BIR Form No. 1901 shall be accomplished and submitted.
 True
41. One of the requirements for BIR registration is any identification issued by an
authorized government body that shows the ____, ____ and ___ of the applicant;
 Name; address; birthdate
42. In this kind of settlement, the court will appoint an administrator who, as the
term indicates, will administer the estate.
 Judicial settlement

43. Each branch, storage and production place with no sales operation is required to
pay the annual registration fee of 500.
  False
44. For government agencies and instrumentalities and LGUs. The tax form to use
when applying for BIR registration should be the BIR Form No. 1903.
 True
45. Fore refusal to issue receipts or sales or commercial invoices, the compromised
penalty on first offense amounts to ____
 25,000
46. The party who ultimately receives the assets, profit, benefit or advantage from
the trust.
 Beneficiary
47. When applying for BIR registration for trusts, the tax form to use should be the
BIR Form No. 1904.
 False
48. New employees shall accomplish and file the application for registration,
through their employees, within ___ days from the date of employment.
 10
49. One person corporation consists of how many director/s?
 1
50. OCW refer to Filipino citizens employed in foreign countries, commonly referred
to as OFWs, who are physically present in a foreign country as a consequence of
their employment thereat.
 True