1. (TCO 1) Which, if any, is NOT one of Adam Smith’s canons of taxation? (Points : 2) • Economy• Neutrality• Equality• Convenience• None of the above2. (TCO 1) Which, if any, of the following is a typical characteristic of an ad valorem tax on personality? (Points : 2) • Taxpayer compliance is greater for personal use property than for business use property.• The tax on automobiles sometimes considers the age of the vehicle.• Most states impose a tax on intangibles.• The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid.• None of the above 3. (TCO 1) Federal tax legislation generally originates in what body? (Points : 2) • Internal Revenue Service• Senate Finance Committee• House Ways and Means Committee• Senate floor• None of the above 4. (TCO 8) Allowing excess capital losses to be carried over to other years can be justified (Points : 2) • on political considerations.• as mitigating the effect of the annual accounting period concept.• by social considerations.• as promoting administrative feasibility.• None of the above 5. (TCO 8) Which, if any, of the following items is a deduction for AGI? (Points : 2) • Moving expenses• Union dues• Child support payments• Tax return preparation fee• None of the above 6. (TCO 8) In 2012, Barney had the following transactions: Salary: $70,000 Capital loss from a stock investment: ($4,000) Moving expense to change jobs: ($10,000) Received repayment of an interest-free loan he made to his brother in 2003: $5,000 Property taxes on personal residence: $2,000 Barney’s AGI is (Points : 2) • $55,000.• $56,000.• $65,000.• $67,000.• None of the above 7. (TCO 8) In which, if any, of the following situations may the individual NOT be claimed as a dependent of the taxpayer? (Points : 2) • A former spouse who lives with the taxpayer (divorce took place two years ago)• A stepmother who does not live with the taxpayer and is a citizen and resident of Peru• A married daughter who lives with the taxpayer• A half brother who does not live with the taxpayer and is a citizen and resident of Canada• An unrelated party who lives with the taxpayer 8. (TCO 9) Aidan files his tax return 65 days after the due date. Along with the return, Aidan remits a check for $6,000, which is the balance of the tax owed. Disregarding the interest element, Aidan’s total failure to file and to pay penalties is (Points : 2) • $90.• $810.• $900.• $990.• None of the above 9. (TCO 11) In § 212(1), the number (1) stands for the (Points : 2) • section number.• subsection number.• paragraph designation.• subparagraph designation.• None of the above 10. (TCO 12) Which of the following is characteristic of the IRS audit procedure? (Points : 2) • The percentage of individual income tax returns that the IRS audits has significantly increased over the years.• An office audit takes place at the office of the taxpayer.• One of the factors that leads to an audit is the information provided by informants.• Only IRS special agents can conduct field audits.• None of the above

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