student copy test bank income taxationpdf

WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-RPCPA A TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDE DISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE B THE STATE CAN HAVE TH

TEST BANK-INCOME TAXATION

CHAPTER 1-GENERAL PRINCIPLES AND CONCEPTS OF TAXATION

D) GENERALLY PROSPECTIVE IN APPLICATION

3 IN CASE OF CONFLICT BETWEEN THE TAX LAWS AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)-(RPCPA)

A) BOTH TAX LAWS AND GAAP SHALL BE ENFORCED

B) GAAP SHALL PREVAIL OVER TAX LAWS

C) TAX LAWS SHALL PREVAIL OVER GAAP

D) THE ISSUE SHALL BE RESOLVED BY THE COURT

4 WHICH OF THE FOLLOWING HAS NO POWER OF TAXATION?(RPCPA)

A) PROVINCES

B) CITIES

C) BARANGAYS

D) BARRIOS

5 “SCHEDULAR SYSTEM OF INCOME TAXATION” MEANS(RPCPA)

A) ALL TYPES OF INCOME ARE ADDED TOGETHER TO ARRIVE AT GROSS INCOME

B) SEPARATE GRADUATED RATES ARE IMPOSED ON DIFFERENT TYPES OF INCOME

C) CAPITAL GAINS ARE EXCLUDED IN DETERMINING GROSS INCOME

D) COMPENSATION INCOME AND BUSINESS/PROFESSIONAL INCOME ARE ADDED TOGETHER IN ARRIVING AT GROSS INCOME

6 ONE OF THE FOLLOWING IS A PRIMARY PURPOSE OF TAXATION

A)PROTECTION OF LOCAL INDUSTRIES AGAINST FOREIGN COMPETITION THROUGH IMPOSITION OF HIGH CUSTOMS DUTIES ON IMPORTED GOODS

B)REDUCTION OF INEQUALITIES IN WEALTH AND INCOME BY IMPOSING PROGRESSIVELY HIGHER TAX RATES

C) TO SECURE REVENUE FOR THE SUPPORT OF THE GOVERNMENT

D) STRENGTHENING OF ANEMIC ENTERPRISES BY GIVING TAX EXEMPTION

7 WHICH OF THE FOLLOWING IS NOT A SECONDARY PURPOSE OF TAXATION?

A) TO SERVE AS KEY INSTRUMENT OF SOCIAL CONTROL

B) TO EFFECT A MORE EQUITABLE DISTRIB UTION OF WEALTH AMONG PEOPLE

C) TO ACHIEVE SOCIAL AND ECONOMIC STABILITY

D) TO RAISE REVENUE TO DEFRAY THE NECESSARY EXPENSE OF THE GOVERNMENT

8 WHICH IS THE BEST ANSWER? A TAX REFORM AT ANY GIVEN TIME UNDERSCORES THE FACT THAT-(RPCPA)

A) TAXATION IS AN INHERENT POWER OF THE STATE

B) TAXATION IS ESSENTIALLY A LEGISLATIVE POWER

C) TAXATION IS A POWER THAT IS VERY BROAD

D) THE STATE CAN AND SHOULD ADOPT PROGRESSIVE TAXATION

9 THE LEGISLATIVE BODY CAN IMPOSE A TAX AT ANY AMOUNT UNDERSCORES THE LEGAL DICTUM THAT TAXATION IS –(RPCPA)

A) AN INHERENT POWER OF THE TAX

B) A VERY BROAD POWER OF THE STATE

C) ESSENTIALLY A LEGISLATIVE POWER

D) FOR PUBLIC PURPOSE

10 ALL OF THE FOLLOWING, EXCEPT ONE, ARE BASIC PRINCIPLES OF THE SOUND TAX SYSTEM

A) FISCAL ADEQUACY

D) NONE OF THE ABOVE

12 THE FOLLOWING, EXCEPT ONE, ARE BASIC PRINCIPLES OF A SOUND TAX SYSTEM

A) IT SHOULD BE CAPABLE OF BEING EFFECTIVELY ENFORCED

B) IT MUST BE PROGRESSIVE

C) SOURCES OF REVENUE MUST BE SUFFICIENT TO MEET GOVERNMENT EXPENDITURES AND OTHER PUBLIC NEEDS

D) IT SHOULD BE EXERCISED TO PROMOTE PUBLIC WELFARE

13 WHICH OF THE FOLLOWING IS NOT ONE OF THE CANONS OF A SOUND TAX SYSTEM?

A) SUBJECT TO CONSTITUTIONAL AND INHERENT LIMITATIONS

B) EQUALITY OR THEORETICAL JUSTICE

C) LEGISLATIVE IN CHARACTER

D) INHERENT IN SOVEREIGNTY

15 THE PRESIDENT OF THE PHILIPPINES AND THE PRIME MINISTER OF JAPAN ENTERED INTO AN EXECUTIVE AGREEMENTIN RESPECT OF A LOAN FACILITY TO THE PHILIPPINES FROM JAPAN WHEREBY IT WAS STIPULATED THAT INTEREST ON LOANS GRANTED BY PRIVATE JAPANESE FINANCIAL INSTITUTIONS IN THE PHILIPPINES SHALL NOT BE SUBJECT TO PHILIPPINE INCOME TAXES WHAT BASIC CHARACTERISTIC OF TAXATION HAS BEEN VIOLATED BY THIS AGREEMENT?

BE ALTERNATIVE SITES OF BUSINESS BECAUSE-(RPCPA)

A) PROVINCES, CITIES AND MUNICIPALITIES MUST HAVE UNIFORM TAXES BETWEEN AND AMONG THEMSELVES

B) THE LOCAL TAXES OF A POLITICAL SUBDIVISION NEED NOT BE UNIFORM WITH THE LOCAL TAXES OF ANOTHER POLITICAL SUBDIVISION

C) BUSINESSES THAT ARE SUBJECT TO NATIONAL TAXES ARE EXEMPTED FROM LOCAL BUSINESS TAXES

D) LOCAL BUSINESS TAXES MAY BE CREDITED AGAINST NATIONAL BUSINESS TAXES

17 STATE,MENT 1:THE POWER OF TAXATION IS INHERENT IN SOVEREIGNTY BEING ESSENTIAL TO THE EXISTENCE OF EVERY GOVERNMENT HENCE, EVEN IF NOT MENTIONED IN THE CONSTITUTION, THE STATE CAN STILL EXERCISE THE POWER

STATEMENT 2:IT IS ESSENTIALLY A LEGISLATIVE FUNCTION EVEN

IN THE ABSENCE OF ANY CONSTITUTIONAL PROVISION, TAXATION POWER FALLS TO CONGRESS AS PART OF THE GENERAL POWER OF LAWMAKING.-(RPCPA)

A) THEORETICAL JUSTICE

B) LEGISLATIVE IN CHARACTER

C) INHERENT LIMITATIONS

D) CONSTITUTIONAL LIMITATIONS

19 WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)

A) TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDE DISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE

B) THE STATE CAN HAVE THE POWER OF TAXATION EVEN IF THE CONSTITUTION DOES NOT NECESSARILY GIVE IT THE POWER TO TAX

C) FOR THE EXERCISE OF THE POWER OF TAXATION, THE STATE CANJ TAX ANYTHING AT ANY TIME

D) THE POWER OF TAXATION IN THE PHILIPPINE CONSTITUTION ARE GRANTS OF POWER AND NOT LIMITATIONS ON TAXING POWERS

20 ONE OF THE FOLLOWING IS NOT AN INHERENT LIMITATION ON THE EXERCISE OF THE POWER OF TAXATION-

A) THE CONTENTION OF CONDE IS TENABLE

B) THE ORDINANCE IS UNCONSTITUTIONAL BECAUSE CONDE IS DENIED OF HIS RIGHT TO EQUAL PROTECTION OF LAW

C) THE CONTENTION OF CONDE IS NOT JUSTIFIED BECAUSE THE RULE ON UNIFORMITY IS NOT VIOLATED CONSIDERING THAT THE ORDINANCE WOULD ALSO IMPOSE ON ALL AIRCONDITIONING TECHNICIAN WHO MAY COME WITHIN THE JURISDICTION OF THE CITY

D) THE ISSUE ON VALIDITY OR INVALIDITY OF THE ORDINANCE SHOULD BE SET ASIDE

22 TREATING PERSONS WHO ARE SIMILARLY SITUATED IN THE SAME MANNER-

A) UNIFORMITY OF TAXATION

B) EQUALITY OF TAXATION

C) DUE PROCESS OF LAW

D) NON-DELEGATION OF LEGISLATIVE POWER

23 WHICH OF THE FOLLOWING IS VIOLATIVE OF THE UNIFORMITY RULE IN TAXATION?

A) DIFFERENT TAX RATES ON BOARDING STABLES FOR RACEHORSES AND BOARDING HORSES THAT ARE NOT FOR RACING

B) WHOLESALE DEALERS IN OIL ARE SUBJECT TO OCCUPATION TAX WHILE WHOLESALE DEALERS IN OTHER ARTICLES SCU AS SUGAR, BACON, COAL, IRON AND OTHER THINGS ARE NOT SO SUBJECT

C) A ROAD USERS’ TAX IMPOSED ON ALL MOTOR VEHICLES REGISTERED AND OPERATING IN THE CITY OF MANILA BUT DOES NOT SUBJECT VEHICLES NOT REGISTERED THEREIN BUT ALSO OPERATING TEMPORARILY IN SAID CITY

D) A TAX OF P2 PER SQM OR FRACTION THEREOF IS IMPSED ON EVERY BILLBOARD OR SIGN ANYWHERE IN THE COUNTRY

24 THE LUNG CENTER OF THE PHILIPPINES, A CHARITABLE INSTITUTION, IS ERECTED IN THE MIDDLE OF A 12-HECTARE LOT:

I A BIG SPACE AT ITS GROUND FLOOR IS BEING LEASED TO

PRIVATE PARTIES, FOR CANTEEN AND SMALL STORE SPACES, AND TO MEDICAL OR PROFESSIONAL PRACTITIONERS WHO USE THE SAME AS THEIR PRIVATE CLINICS FOR THEIR PATIENTS WHOM THEY CHARGE FOR THEIR PROFESSIONAL FEES

II THE REST OF THE PORTIONS OF THE BUILDING ARE USED FOR

ITS PATIENTS, WHETHER PAYING OR NON-PAYING III ALMOST ½ OF THE ENTIRE AREA OF THE LOT ON THE LEFT

SIDE OF THE BUILDING IS VACANT AND IDLE

IV A BIG PORTION ON THE RIGHT SIDE IS BEING LEASED FOR

COMMERCIAL PURPOSES TO A PRIVATE ENTERPRISE KNOWN

AS THE ELLIPTICAL ORCHIDS & GARDEN CENTER

WHICH PORTION IS SUBJECT TO REAL PROPERTY TAX?

A) I ONLY

B) I AND II

C) III AND IV

D) I, III AND IV

25 STATEMENT 1:THE CONSTITUTIONAL EXEMPTION ON INCOME TAXES, PROPERTY TAXES AND CUSTOMS DUTIES IS ALLOWED ON NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTIONS ONLY

STATEMENT 2: A BUILDING BEING LEASED BY ITS OWNER TO A PRIVATE EDUCATIONAL INSTITUTION FOR USE AS CLASSROOMS IS EXEMPT FROM PROPERTY YAX

STATEMENT 3: INCOME OF A NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTION RUN BY THE ARCHDIOCESE IS EXMEPT FROM TAX PROVIDED THAT INCOMES ARE ACTUALLY, DIRECTLY AND EXCLUSIVELY USED FOR EDUCATIONAL PURPOSES

WHICH OF THE STATEMENTS ARE CORRECT?

A) STATEMENT 1 ONLY

B) STATEMENTS 1 AND 2

C) STATEMENT 2 ONLY

D) ALL OF THEM

26 WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-(RPCPA)

A) AN INHERENT LIMITATION OF TAXATION MAY BE DISREGARDED BY THE APPLICATION OF A CONSTITUTIONAL LIMITATION

B) THE PROPERTY OF AN EDUCATIONAL INSTITUTION OPERATED BY A RELIGIOUS ORDER IS EXEMPT FROM PROPERTY TAX, BUT ITS INCOME IS SUBJECT TO INCOME TAX

C) THE PROHIBITION OF DELEGATION BY THE STATE OF THE POWER OF TAXATION WILL STILL ALLOW THE BIR TO MODIFY THE RULES ON TIME FOR FILING OF RETURNS AND PAYMENT OF TAXES

D) THE POWER OF TAXATION IS SHARED BY THE LEGISLATIVE AND EXECUTIVE DEPARTMENTS OF GOVERNMENT

27 ST BARNABAS COLLEGE (SBC) IS A NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTION IT OWNS A 5-HECTARE LOT ½ OF WHICH IS BEING USED AS ITS SCHOOL CAMPUS WHILE THE OTHER HALF IS VACANT TO COPE WITH THE INCREASING OPERATING COSTS AND TO UPGRADE ITS FACILITIES, SBC PLANS TO DO THE FOLLOWING EFFECTIVE JANUARY 1, 2006; 1) RENT OUT TO A MARKETING FIRM THE VACANT PORTION OF THE LAND; 2) INJCREASE TUITION FEES BY 10% IN ACCORDANCE WITH GOVERNMENT REGULATIONS;.3)IMPORT 20 SETS OF COMPUTERS FOR USE IN ITS COMPUTER COURSES

WHICH OF THE FOLLOWING QUESTIONS IS ANSWERABLE BY “YES.”? A) IS SBC SUBJECT TO REAL ESTATE TAX ON THE ½ PORTION TO

BE RENTED OUT TO A BUSINESS ESTABLISHMENT?

B) WILL IT BE EXEMPT FROM INCOME TAX ON ITS RENTAL TO THE MARKETING FIRM?

C) WILL THE INCREASE IN TUITION FEES BE SUBJECT TO INCOME TAX IF IT RESULTS TO NET INCOME FROM SCHOOL OPERATIONS?

D) WILL IT BE SUBJECT TO CUSTOMS DUTIES ON THE IMPORTATION OF THE COMPUTERS?

28 THE QUEZON SCHOOL OF BUSINESS AND ARTS, A PROPRIETARY EDUCATIONAL INSTITUTION WHICH IS OFFERING PRIMARY, SECONDARY AND TERTIARY EDUCATIONB, IS REGISTERED AND ACCREDITED BY DEPED AND CHED

WHICH OF THE FOLLOWING IS EXEMPT FROM TAX? WHAT KIND OF TAX?

A) THE IMPORTATION OF LABORATORY EQUIPMENTS-FROM CUSTOMS DUTIES

B) THE SCHOOL BEING RENTED BY THE SCHOOL-FROM REAL PROPERTY TAX

C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO A FASTFOOD CHAIN-FROM REAL PROPERTY TAX

D) THE INCOME FROM OPERATION-FROM INCOME TAX

29 IN RELATION TO NO 28 ABOVE, ASSUMING THAT THE SCHOOL IS A NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTION, WHICH OF THE FOLLOWING IS SUBJECT

TO TAX ? WHAT KIND OF TAX?

A) THE SCHOOL BUILDING OWNED BY THE SCHOOL-FROM REAL ESTATE TAX

B) THE SCHOOL BUILDING BEING RENTED BY THE FROM REAL ESTATE TAX

SCHOOL-C) A PORTION OF THE SCHOOL BUILDING BEING LEASED TO A FASTFOOD CHAIN-FROM REAL PROPERTY TAX

D) THE INCOME FROM OPERATION-FROM INCOME TAX

30 THE MUNICIPALITY OF SAN FRANCISCO HAS A HECTARE CEMETERY OF 4 DIFFRRENT CEMETERIES WHICH ARE OWNED BY DIFFERENT ENTITIES WHICH OF THE FOLLOWING IS SUBJECT TO REAL ESTATE TAX?

10-A) CEMENTERIO MUNICIPAL DEL SAN FRANCISCO-A GOV’T CEMETERY OWNED BY THE MUNICIPALITY WHICH WAS ESTABLISHED FOR THE PURPOSE OF USING IT AS BURIAL GROUND OF THE PAUPERS OF SAN FRANCISCO

B) SAN FRANCISCO CATHOLIC CEMETERY-OWNED BY THE CATHOLIC CHURCH; PAYMENTS ARE REMITTED TO THE CATHOLIC CHURCH AND FOR THE IMPROVEMENT OF THE CEMETERY

C) LAST TRIP MEMORIAL PARK-OWNED BY A CORPOR5ATION WHERE DIVIDENDS ARE DISTRIBUTED TO THE SHAREHOLDERS

AT THE END OF THE YEAR D) QUITA-QUITA MEMORIAL PARK-OWNED BY AN ASSOCIATION CONSISTING OF 100 DIFFERENT FAMILIES; EACH FAMILY OWNS SEVERAL SQUARE METERS OF LOT; NOT A SINGLE PORTION IS HELD FOR SALE TO EITHER MEMBER OR NON-MEMBERS OF THE ASSOCIATION

31.ALL APPROPRIATIONS, REVENUE OR TARIFF BILLS, BILLS AUTHORIZING INCREASE OF PUBLIC DEBT, BILLS OF LOCAL APPLICATION, AND BILLS SHALL ORIGINATE EXCLUSIVELY IN THE-(RPCPA)

A) OFFICE OF THE PRESIDENT

B) HOUSE OF REPRESENTATIVES

C) SENATE

D) SUPREME COURT

32 WHICH STATEMENT IS WRONG? TAX LAWS-(RPCPA)

A) MUST ORIGINATE FROM THE HOUSE OF REPRESENTATIVES AND ON WHICH SAME BILL THE SENATE MAY PROPOSE AMENDMENTS

B) MAY ORIGINATE FROM THE SENATE AND ON WHICH SAME BILL THE HOUSE OF REPRESENTATIVES MAY PROPOSE AMENDMENTS

C) MAY HAVE A HOUSE VERSION AND SENATE VERSION APPROVED SEPARATELY

D) MAY BE RECOMMENDED BY THE PRESIDENT TO CONGFRESS

33.CONGRESSMAN ERIN TANADA OF QUEZON AND SENATOR JUAN PONCE ENRILE SPONSORED A BILL IN THE HOUSE OF REPRESENTATIVES AND THE SENATE, RESPECTIVELY, INCREASING THE PERSONAL EXEMPTIONS OF INDIVIDUAL TAXPAYERS AS WELL AS GRANTING TAX EXEMPTION TO MINIMUM WAGE EARNERS WHICH OF THE FOLLOWING IS CORRECT?

A) THE SENATE BILL SHOULD BE DISCUSSED AHEAD OF THE HOUSE BILL

B) THE SENATE AND HOUSE BILLS MAY BE DISCUSSED AT THE SAME TIME IN BOTH HOUSES

C) THE HOUSE BILL SHOULD BE DISCUSSED AHEAD NOF THE SENATE BILL

D) NO PRIORITY; EACH BILL CAN BE DISCUSSED AHEAD OF THE OTHER

34.NO LAW GRANTING ANY TAX EXEMPTION SHALL BE PASSED WITHOUT THE CONCURRENCE OF-(RPCPA)

A) MAJORITY OF ALL MEMBERS OF THE CONGRESS

B) 2/3 VOTE OF ALL MEMBERS OF THE CONGRESS

C) ¾ VOTE OF ALL MEMBERS OF THE CONGRESS

D) UNANIMOUS VOTE OF ALL MEMBERS OF THE CONGRESS

35.WHICH OF THE FOLLOWING STATEMENTS IS INCORRECT?

A) NO PERSON SHALL BE IMPRISONED FOR NON-PAYMENT OF DEBT OR NON-PAYMENT OF TAXES

B) THE PASSAGE OF LAWS GRANTING TAX EXEMPTIONS REQUIRES THE CONCURRENCE BY A MAJORITY OF ALL THE MEMBERS OF CONGRESS

C) THE SUPREME COURT’S JURISDICTION OVER TAX CASES CAN NOT

BE IMPAIRED

D) THE REVENUES AND ASSETS OF NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTIONS AND DONATIONS FFOR EDUCATIONAL PURPOSES ARE EXEMPTED FROM TAXES AND DUTIES

36.THEY RESTRICT THE EXERCISE OF THE POWER OF TAXATION ALTHOUGH THEY ARE NOT EMBODIED IN THE CONSTITUTION

C) IMPROVEMENT OF SUGAR INDUSTRY

D) NONE OF THE ABOVE

38 A FUNDAMENTAL RULE IN TAXATION IS THAT “THE PROPERTY OF ONE COUNTRY MAY NOT BE TAXED BY ANOTHER COUNTRY” THIS IS KNOWN AS-(RPCPA)

D) EXEMPTION IN THE TAX CODE

41 DEALS WITH THE PROVISION OF THE LAW WHICH DETERMINES THE PERSON OR PROPERTY TO BE TAXED, THE SUM OR SUMS TO BE RAISED, THE RATE THEREOF, AND THE TIME AND MANNER OF LEVYINGM RECEIVING AND COLLECTING OF TAXES

43.THE AMOUNT REQUIRED IS DICTATED BY THE NEEDS OF THE GOVERNMENT-(RPCPA)

A) LICENSE FEE

B) TAX

C) TOLL

D) TARIFF

44 ONE OF THE CHARACTERISTICS OF A TAX IS

A) A TAX IS A PECUNIARY BURDEN AND THE LAW MAY NOT ALLOW PAYMENT IN KIND

B) IT IS DEPENDENT UPON THE WILL OR CONTRACTUAL ASSENT, EXPRESS OR IMPLIED, OF THE PERSON TAXED

C) IT IS LEVIED BY THE STATE BY VIRTUE OF ITS SOVEREIGNTY

D) IT IS COLLECTED FOR PUBLIC AND PRIV ATE PURPOSE

45 ONE OF THE CHARACTERISTICS OF A TAX IS THAT-(RPCPA)

A) IT IS GENERALLY BASED ON CONTRACT

B) IT IS GENERALLY PAYABLE IN MONEY

48 AN EXAMPLE OF A PROPERTY TAX IS

A) ADDITIONAL COMMUNITY TAX ON INCOME OF REAL PROPERTIES B) REAL ESTATE TAX ON REAL PROPERTIES

C) ESTATE TAX ON INHERITED PERSONAL AS WELL AS REAL PROPERTIES

D) DONOR’S TAX ON DONATION OF PROPERTY

49 WHICH OF THE FOLLOWING IS NOT AN EXAMPLE OF EXCISE TAX?

54 STATEMENT 1: THE VALUE-ADDED TAX IS A PROPERTRY TAX

STATEMENT 2: THE ESTATE TAX IS A DIRECT TAX-(RPCPA)

A) THE 2 STATEMENTS ARE CORRECT

B) THE 2 STATEMENTS ARE WRONG

C) STATEMENT 1 IS CORRECT; STATEMENT 2 IS WRONG

D) STATEMENT 1 IS WRONG; STATEMENT 2 IS CORRECT

55.FORMS PART OF THE PURCHASE PRICE OF THE COMMODITY OR SERVICE AND PASSED ON TO CUSTOMERS

A) DIRECT TAX

B) INDIRECT TAX

C) PROPERTY TAX

D) NONE OF THE ABOVE

56 A TAX ON BUSINESS IS-(RPCPA)

A) DIRECT TAX

B) INDIRECT TAX

C) PROPERTY TAX

D) NONE OF THE ABOVE

57 FELIX IS A MINING OPERATOR HIS MINERAL LANDS ARE NOT COVERED

BY ANY LEASE CONTRACT THE TAX FELIX HAS TO PAY BASED ON THE ACTUAL VALUE OF THE GROSS OUTPUT OR MINERAL PRODUCTS EXTRACTED IS-(RPCPA)

59.TAX LEVIED FOR PARTICULAR OR SPECIFIC PURPOSE IRRESPECTIVE

OF WHETHER REVENUE IS ACTUALLY RAISED OR NOT

C) PROPORTIONAL TAX

D) GENERAL TAX

61 TAXES IMPOSED BY A POLITICAL SUBDIVISION OF THE STATE AND

IS EFFECTIVE ONLY WITHIN THE TERRITORIAL BOUNDARIES THEREOF

TO THE OWNER A JUST COMPENSATION

A) POWER OF EMINENT DOMAIN

A) POWER OF EMINENT DOMAIN

B) POLICE POWER

C) POWER OF TAXATION

D) PEOPLE POWER

66 THE FOLLOWING ARE SIMILARITIES OF THE INHERENT POWER OF TAXATION, EMINENT DOMAIN AND POLICE POWER EXCEPT ONE-(RPCPA)

A) ARE NECESSARY ATTRIBUTES OF SOVEREIGNTY

B) INTERFERES WITH PRIVATE RIGHTS AND PROPERTY

C) AFFECTS ALL PERSONS OR THE PUBLIC

D) ARE LEGISLATIVE IN THEIR IMPLEMENTATION

67 WHICH STATEMENT REFERS TO POLICE POWER AS DISTINGUISHED FROM TAXATION?-(RPCPA)

A) IT CAN ONLY BE IMPOSED ON SPECIFIC PROPERTY OR PROPERTIES B) THE AMOUNT IMPOSED DEPENDS ON WHETHER THE ACTIVITY IS USEFUL OR NOT

C) IT INVOLVES THE TAKING OF PROPERTY BY THE GOVERNMENT D) THE AMOUNT IMPOSED HAS NO LIMIT

68.POLICE POWER AS DISTINGUISHED FROM TAXATION

A) JUST COMPENSATION IS RECEIVED BY THE OWNER OF THE PROPERTY

B) MAYBE EXERCISED BY PRIVATE INDIVIDUALS

C) SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTION

D) PROPERTY IS TAKEN BY THE GOV’T FOR PUBLIC PURPOSE

69 AFTER HAVING BEEN INFORMED THAT SOME MASSAGE PARLORS ARE BEING USED AS FRONTS FOR PROSTITUTION, THE SANGGUNIANG PANLUNGSOD OF MANILA PASSED A TAX ORDINANCE SUBJECTING MASSAGE PARLORS WITHIN ITS JURISDICTION TO SUCH ONEROUS TAXES THAT LEAVE THEM NO OTHER ALTERNATIVE BUT TO STOP OPERATING THE PASSAGE OF THE ORDINANCE IS A VALID EXERCISE OF-

A) TAXATION

B) EMINENT DOMAIN

C) POLICE POWER

D) POLICE POWER AND POWER OF TAXATION

70 STATEMENT 1: THE CONGRESS CAN ENACT TAX LAWS EVEN IN THE ABSENCE OF A CONSTITUTIONAL PROVISION GRANTING SAID BODY THE POWER TO TAX

STATEMENT 2: A TAX MAY BE VALIDLY IMPOSED IN THE EXERCISE OF POLICE POWER AND NOT THE POWER TO TAX

C) POWER OF EMINENT DOMAIN

D) PRIVATIZATION OF GOVERNMENT’S CAPITAL ASSETS

72 IN THIS POWER OF THE STATE, THE PERSON WHO IS PARTING WITH HIS MONEY OR PROPERTY IS PRESUMED TO RECEIVE A BENEFIT-(RPCPA)

A) TAXATION

B) POLICE POWER

C) EMINENT DOMAIN

D) FORFEITURE POWER

73 WHICH OF THE INHERENT POWERS OF THE GOVERNMENT IS INFERIOR

TO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTION?

A) TAXATION

B) POLICE POWER

C) EMINENT DOMAIN

D) NONE

74 TAX IS DISTINGUISHED FROM LICENSE FEE-(RPCPA)

A) NON-PAYMENT DOES NOT NECESSARILY RENDER THE BUSINESS ILLEGAL

B) A REGULATORY MEASURE

C) IMPOSED IN THE EXERCISE OF POLICE POWER

D) LIMITED TO COVER COST OF OBLIGATION

75 THE DISTINCTION OF A TAX FROM PERMIT OR LICENSE FEE IS THAT A TAX IS-(RPCPA)

A) IMPOSED FOR REGULATION

B) ONE WHICH INVOLVES EXERCISE OF POLICE POWER

C) ONE IN WHICH THERE IS GENERALLY NO LIMIT ON THE AMOUNT THAT MAY BE IMPOSED

D) ANSWER IS NOT GIVEN

76 WHICH OF THE FOLLOWING TERMS DESCRIBES THIS STATEMENT

“THAT THE STATE HAS COMPLETE DISCRETION ON THE AMOUNT TO BE IMPOSED AFTER DISTINGUISHING BETWEEN A USEFUL AND NON-USEFUL ACTIVITY?”-(RPCPA)

A) IMPOSED NFOR REGULATION

B) INVOLVES EXERCISE OF POLICE POWER

C) NON-PAYMENT MAKES THE BUSINESS ILLEGAL

D) LEGAL COMPENSATION OR REWARD OF AN OFFICER FOR SERVICES

78 ALL OF THE FOLLOWING, EXCEPT ONE, ARE CHARACTERISTICS OF A TOLL

A) DEMAND OF PROPRIETORSHIP

B) COMPENSATION FOR THE USE OF ANOTHER’S PROPERTY

C) MAY BE IMPOSED BY PRIVATE INDIVIDUALS

D) LEVIED FOR THE SUPPORT OF THE GOVERNMENT

79 THIS IS A DEMAND OF OWNERSHIP-(RPCPA)

B) IT IS LEVIED ONLY ON LAND

C) MAY BE LEVIED ON BUSINESS

D) BASED WHOLLY ON BENEFITS

81 WHICH STATEMENT IS WRONG?-(RPCPA)

A) A TAX IS A DEMAND OF SOVEREIGNTY

B) A TOLL IS A DEMAND OF OWNERSHIP

C) A SPECIAL ASSESSMENT IS A TAX

D) CUSTOMS DUTY IS A TAX

82.WHICH OF THE FOLLOWING IS NOT A CHARACTERISTIC OF DEBT?

A) GENERALLY ARISES FROM CONTRACT

B) PAYABLE ONLY IN MONEY

C) ASSIGNABLE

D) IMPRISONMENT IS NOT A SANCTION FOR NON-PAYMENT

83 ALL FUNDS OR INCOME DERIVED BY THE GOVERNMENT FROM ANY OTHER SOURC E

D) A TAX OF 1% IS IMPOSED FOR BANK RESERVE DEFICIENCY WHILE A PENALTY OF 1/10 OF 1% IS ALSO IMPOSED AS A CONSEQUENCE OF SUCH RESERVE DEFICIENCY

86 WHICH OF THE FOLLOWING IS NOT AN ELEMENT OF DIRECT DUPLICATE TAXATION WHICH IS VIOLATIVE OF THE EQUAL PROTECTIONAND UNIFORMITY CLAUSES IN THE CONSTITUTION?

A) SAME PROPERTY IS TAXED TWICE

B) SAME TAXING AUTHORITY

C) SAME AMOUNT

D) SAME PURPOSE

87 THE FOLLOWING CONSTITUTE DOUBLE TAXATION EXCEPT (RPCPA)

ONE-A) BOTH TAXES ARE IMPOSED IN THE SAME AMOUNT

B) BOTH TAXES ARE LEVIED FOR THE SAME PURPOSE

C) BOTH TAXES ARE IMPOSED BY THE SAME TAXING AUTHORITY

D) BOTH TAXES ARE IMPOSED UPON THE SAME PERSON

88 STATEMENT 1: OUR CONSTITUTION DOES NOT PROHIBIT DOUBLE TAXATION

STATEMENT 2: IF DOUBLE TAXATION OCCURS, THE TAXPAYER MAY SEEK RELIEF UNDER THE UNIFORMITY CLAUSE OR THE EQUAL PROTECTION GUARANTEE-(RPCPA)

A) REAL ESTATE TAX ON THE LAND AND BUILDING

B) VALUE-ADDED TAX ON THE GROSS RECEIPTS FROM RENT

C) COMMUNITY TAX BASED ON THE ASSESSED VALUE OF THE APARTMENT HOUSE

D) INCOME TAX ON INCOME FROM RENT

90 ONE OF THE FOLLOWING IS A FALSE STATEMENT ABOUT DOUBLE TAXATION WHICH IS IT?

A) THERE IS NO CONSTITUTIONAL PROHIBITION ON DOUBLE TAXATION

B) DIRECT DUPLICATE TAXATION IS A VALID DEFENSE AGAINST A TAX MEASURE IF IT IS VIOLATIVE OF THE EQUAL PROTECTION CLAUSE C) ABSENCE OF ANY OF THE ELEMENTS OF DIRECT DOUBLE TAXATION MAKES IT INDIRECT DUPLICATE TAXATION

D) A 20% FINAL WITHHOLDING TAX ON INTEREST INCOME ON BANK DEPOSITS AND A 5% GROSS RECEIPTS TAX ON BANKS IS A DIRECT DUPLICATE TAXATION

91 TRANSFER OF THE TAX BURDEN BY ONE ON WHOM THE TAX IS ASSESSED TO ANOTHER

C) CHANGING THE TERMS OF THE SALE LIKE FOB SHIPPING POINT IN THE PHILIPPINES TO FOB DESTINATION ABROAD, SO THAT THE TITLE PASSES ABROAD INSTEAD OF IN THE PHILIPPINES

D) THE MANUFACTURER TRANSFERS THE SALES TAX TO THE DISTRIBUTOR, THEN IN TURN TO THE WHOLESALER, TO THE RETAILER AND FINALLY TO THE CONSUMER

93 THE REDUCTION IN THE SELLING PRICE OF INCOME-PRODUCING PROPERTY BY AN AMOUNT EQUAL TO THE CAPITALIZED VALUE OF FUTURE TAXES THAT MAY BE PAID BY THE PURCHASER

A) SHIFTING

B) CAPITALIZATION

C) TRANSFORMATION

D) TAX EXEMPTION

95 THE GRANT OF IMMUNITY TO PARTICULAR PERSONS OR CORPORATION

OR TO PERSONS OR CORPORATIONS OF A PARTICULAR CLASS FROM A TAX WHICH PERSONS AND CORPORATIONS GENERALLY WITHIN THE SAME TAXING DISTRICT ARE OBLIGED TO PAY

STATEMENT 2: A TAX EXEMPTION MAY BE WITHDRAWN ANYTIME AT THE PLEASURE OF THE TAXING AUTHORITY

WHICH OF THE ABOVE STATEMENTS IS TRUE?

100 WHICH OF THE FOLLOWING FACTS PERTAIN/S TO TAX AVOIDANCE?

I.AFTER STUDYING HIS TAX PROBLEMS, MATALINO DECIDED TO WITHDRAW HIS BANK DEPOSITS AND TO BUY TAX-EXEMPT SECURITIES II.TUSO WHO WISHES TO AVOID THE PAYMENT OF TAXES ASSESSABLE

ON THE TRANSACTION MADE IT APPEAR ON THE DEED OF SALE THAT THE SELLING PRICE WAS ONLY P200,000 ALTHOUGH IT WAS ACTUALLY P300,000

III.REFRAINING FROM ENGAGING IN ACTIVITES SUBJECT TO TAX

IV.ABUSADO INSURANCE CORPORATION SOLD ITS OFFICE BUILDING TO ADAN FOR P100 MILLION, WHO IN TURN, SOLD THE SAME PROPERTY TO DUGONG-BUGHAW, INC FOR P200 MILLION THESE 2 TRANSACTIONS WERE EVIDENCED BTY DEEDS OF ABSOLUTE SALE NOTARIZED ON THE SAME DAY BY THE SAME NOTARY PUBLIC

A) I ONLY

B) I AND III ONLY

C) I AND IV

D) I, III AND IV

101 IN CASE OF AMBIGUITY, TAX LAWS SHALL BE INTERPRETED

A) STRICTLY AGAINST THE TAXPAYER

B) LIBERALLY AGAINST THE POWER

C) LIBERALLY IN FAVOR OF THE TAXPAYER

D) LIBERALLY IN FAVOR OF THE GOVERNMENT

102 IN CASES OF DEDUCTIONS AND EXEMPTIONS ON INCOME TAX RETURNS, DOUBTS SHALL BE RESOLVED-(RPCPA)

A) STRICTLY AGAINST THE TAXPAYER

B) STRICTLY AGAINST THE GOVERNMENT

C) LIBERALLY IN FAVOR OF THE TAXPAYER

D) LIBERALLY AGAINST THE GOVERNMENT

103 THE FOLLOWING, EXCEPT ONE, ARE EXCEPTIONS TO THE RULE THAT TAX EXEMPTIONS MUST BE STRICTLY CONSTRUED AGAINST THE TAXPAYER

A) WHERE THE STATUTE GRANTING THE EXEMPTION PROVIDES FOR LIBERAL INTERPRETATION THEREOF

B) IF THE TAXPAYER DOES NOT FALL WITHIN THE PURVIEW OF THE EXCEPTION BY CLEAR LEGISLATIVE INTENT

C) IN CASE OF SPECIAL TAXES RELATING TO SPECIAL CASES AND AFFECTING ONLY SPECIAL CLASSES OF PERSONS

D) IF EXMPTIONS REFER TO PUBLIC PROPERTY

104 A FRANCHISE CAN BE AMENDED BY-(RPCPA)

A) AN AMENDMENT OF SPECIAL LAW, WHICH GRANTED THE FRANCHISE

B) AN AMENDMENT OF A LAW OF GENERAL APPLICATION

C) AN AMENDMENT OF A REVENUE REGULATION

D) AN AMENDMENT OF TAX LAWS

105 SOME FRANCHISE HOLDERS WHO ARE PAYING THE FRANCHISE TAX ARE BEING REQUIRED BY AN AMENDATORY LAW TO PAY THE VALUE-ADDED TAX, WHILE OTHERS REMAIN SUBJECT TO FRANCHISE TAX WHICH

OF THE FOLLOWING CONSTITUTIONAL PROVISION MAKES THE LAW UNCONSTITUTIONAL?-(RPCPA)

A) NO LAW SHALL BE PASSED IMPAIRING THE OBLIGATION OF CONTRACT

B) THE RULE OF TAXATION SHALL BE UNIFORM

C) NO PERSON SHALL BE DEPRIVED OF PROPERTY WITHOUT DUE PROCESS OF LAW

D) NONE OF THE ABOVE

106 STATEMENT 1: THE POINT ON WHICH A TAX IS ORIGINALLY IMPOSED

D) PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION

108 STATEMENT 1: IN CASE OF CONFLICT BETWEEN A REVENUE REGULATION AND THE PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, THE LATTER SHALL PREVAIL

STATEMENT 2: THE REVOCATION OF A REVENUE REGULATION CAN NOT

BE MADE RETROACTIVE EVEN IF THE REASON FOR ITS REVOCATION IS THAT IT IS ERRONEOUS OR CONTRARY TO LAW

A) CORRECT, WRONG

B) CORRECT, CORRECT

C) WRONG, CORRECT

D) WRONG, WRONG

109 ALL OF THE FOLLOWING, EXCEPT ONE, ARE SOURCES OF TAX LAWS-

A) LEGISLATIONS, TAX TREATIES AND TAX ORDINANCES

B) JUDICIAL DECISIONS

C) OPINIONS OF AUTHORS

D) ADMINISTRATIVE RULES AND REGULATIONS

110 THE LEAST SOURCE OF TAX LAW IS-

BE SET-OFF WITH EACH OTHER THIS DOCTRINE IS CALLED

A) CORRECT, WRONG

B) CORRECT, CORRECT

C) WRONG, CORRECT

D) WRONG, WRONG

113 THE PLACE OR AUTHORITY THAT HAS THE RIGHT TO IMPOSE AND COLLECT TAXES-

C) THE FUNDS SOUGHT TO BE DISBURSED MUSTB HAVE BEEN RAISED THROUGH TAXATION

D) IT MUST NOT REFER TO AN ENACTMENT OF A TAX LAW

3 A LAW GRANTING TAX EXEMPTION SHOULD BE CONCURRED IN BY A MAJORITY OF ALL MEMBERS OF THE CONGRESS PRESENT

4 THE PRESIDENT CAN VETO ANY PARTICULAR ITEM IN A REVENUE OR TARIFF BILL, BUT THE VETO SHALL NOT AFFECT THE ITEMS OR ITEMS

TO WHICH HE DOES NOT OBJECT

5 THE POWER TO TAX CAN BE DELEGATED TO LOCAL GOVERNMENT UNITS, SUBJECT TO LIMITATIONS THAT MAY BE SET BY LAW

6 THE POWER OF TAXATION CAN BE DELEGATED TO THE PRESIDENT OF THE PHILIPPINES

7 THE PRESIDENT OF THE PHILIPPINES IS EMPOWERED TO GRANT TAX EXEMPTION ON CERTAIN CLASS OF TAXPAYERS

8 NON-PAYMENT OF TAX AND DEBT IS GROUND FOR IMPRISONMENT

9 THE POWER TO TAX MAY INCLUDE THE POWER TO DESTROY

10 PROVISIONS IN THE PHILIPPINE CONSTITUTION ARE GRANTS OF POWER

11 LANDS AND BUILDINGS BEING USED ACTUALLY, DIRECTLY AND EXCLUSIVELY FOR RELIGIOUS AND CHARITABLE PURPOSES BY CHURCHES AND CHARITABLE INSTITUTIONS ARE EXEMPT FROM INCOME AND PROPERTY TAXES

12 A PORTION OF A SCHOOL BUILDING WHICH IS BEING LEASED TO A MARKETING FIRM FOR COMMERCIAL PURPOSES IS EXEMPT FROM PROPERTY TAX

13 A NON-STOCK, NON-PROFIT EDUCATIONAL INSTITUTION IS EXEMPT FROM INCOME TAX ON ITS REVENUES AND FROM REAL PROPERTY TAX ON ASSETS USED ACTUALLY, DIRECTLY AND EXCLUSIVELY FOR EDUCATIONAL PURPOSES

14 TAX LAWS CAN NEVER HAVE A RETROACTIVE EFFECT

15 THE GOVERNMENT CAN NOT TAX ITS AGENCIES AND INSTRUMENTALITIES

16 A TAXPAYER’S SUIT CAN BE FILED BY ANY TAXPAYER IN ANY INSTANCE AGAINST THE GOVERNMENT

17 IN THE PHILIPPINES, THERE MAY BE DOUBLE TAXATION

18 A TAX IS GENERALLY UNLIMITED BECAUSE IT IS BASED ON THE NEEDS OF THE STATE

19 AS A RULE, TAXES ARE SUBJECT TO SET-OFF OR COMPENSATION

20 RECIPROCITY RULE APPLIES TO CITIZENS OF THE PHILIPPINES AND RESIDENT ALIEN ONLY

21 THE INHERENT POWERS ARE EXERCISED PRIMARILY BY THE LEGISLATURE

22 THE RULE OF TAXATION SHALL BE UNIFORM AND EQUITABLE

23 TAXATION MAY BE USED TO IMPLEMENT THE POLICE POWER OF THE STATE

24 POLICE POWER IS SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTION

25 THE THREE INHERENT POWERS ARE METHODS BY WHICH THE STATE INTERFERES WITH PRIVATE RIGHT

26 THE SALARY OF THE PRESIDENT OF THE PHILIPPINES AND OF THE JUSTICES OF THE SUPREME COURT IS EXEMPT FROM INCOME TAX

27 OPINIONS OF LEGAL LUMINARIES ARE SOURCES OF TAX LAWS

28 THE CONSTITUTION GRANTS EXEMPTION FROM ALL KINDS OF TAXES

TO RELIGIOUS AND CHARITABLE ORGANIZATIONS

29 BECAUSE THE POWER TO TAX IS UNLIMITED, COMPREHENSIVE, PLENARY AND SUPREME, THE POWER TO TAX CAN REACH OVER INTO ANY JURISDICTION TO SEIZE UPON PERSON OR PROPERTY

30 A PERSON CAN OBJECT OR RESIST THE PAYMENT OF TAXES SOLELY BECAUSE NO PERSONAL BENEFIT TO HIM CAN BE POINTED AS ARISING FROM THE TAX

31 THE “BENEFIT-PROTECTION THEORY” IS THE SOURCE OF THE

“DOCTRINE OF SYMBIOTIC RELATIONSHIP”

32 A TAXPAYER COMMITS TAX AVOIDANCE WHEN HE DELIBERATELY OMITS TO DECLARE ALL HIS TAXABLE INCOME

33 THE THEORY OF TAXATION IS BASED ON THE LIFEBLOOD DOCTRINE

34 A DIRECT TAX CAN BE SHIFTED DIRECTLY TO THE CONSUMERS

35 A TAX IS A VOLUNTARY PAYMENT OR DONATION TO THE GOVERNMENT

36 TAXES ARE CONTRACTUAL DEBTS, HENCE A TAXPAYER CANNOT BE IMPRISONED FOR NON-PAYMENT THEREOF

37 AS A POWER, TAXATION REFERS TO THE INHERENT POWER OF THE STATE TO DEMAND ENFORCED CONTRIBUTION FOR PUBLIC PURPOSE

OR PURPOSES

38 THE GOVERNMENT CANNOT SURVIVE WITHOUT TAXATION

39 INCOME TAX IS A PROGRESSIVE TAX

40 TAX LAW CANNOT BE IMPOSED FOR A SPECIAL PURPOSE FOR IT SHOULD ALWAYS BE AIMED AT REVENUE COLLECTION

41 THE POWER OF THE STATE TO TAX EXISTS BY VIRTUE OF AN EXPRESS PROVISION OF THE CONSTITUTION

42 AN EXEMPTION FROM TAXATION IS TRANSFERABLE

43 ADMINISTRATIVE FEASIBILITY MEANS ALSO THAT THE TAX MUST NOT BE DISCOURAGING TO BUSINESS ACTIVITY

44 FISCAL ADEQUACY MEANS THAT REVENUE SHOULD ALWAYS MEET THE DEMANDS OF PUBLIC EXPENDITURE EVEN DURING ADVERSE ECONOMIC CONDITION

45 STATUTORY TAX EXEMPTIONS MAY BE REVOKED BY THE CONGRESS

46 TAX EVASION IN ONE YEAR CAN BE OFFSET BY PAYING MORE TAXES THE FOLLOWING YEAR

47 NON-PAYMENT OF ADDITIONAL COMMUNITY TAX IS A GROUND FOR IMPRISONMENT

48 IN CASE OF CONFLICT BETWEEN A TAX LAW AND A REVENUE REGULATION, THE LATTER SHALL PREVAIL

49 A REVENUE REGULATION CAN EXPAND THE PROVISION OF LAW BY IMPOSING A PENALTY EVEN IF THE LAW THAT IT IMPLEMENTS DOES NOT IMPOSE A PENALTY

50 REVENUE BILLS SHALL ORIGINATE EXCLUSIVELY FROM THE SENATE

CHAPTER 11-INCOME TAX OF INDIVIDUALS

1.WHO AMONG THE FOLLOWING IS A NON-RESIDENT ALIEN?-(RPCPA)

A) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITE PURPOSE WHICH IN ITS NATURE MAY BE PROMPTLY ACCOMPLISHED

B) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITE PURPOSE WHICH IN ITS NATURE WOULD REQUIRE AN EXTENDED STAY

C) AN ALIEN WHO HAS ACQUIRED RESIDENCE IN THE PHILIPPINES D) AN ALIEN WHO LIVES IN THE PHILIPPINES WITH NO DEFINITE INTENTION AS TO HIS STAY

2 ARCHIE, A STAFF AUDITOR OF SGV & CO., TOOK AND PASSED THE EXAMINATION FOR CERTIFIED INTERNAL AUDITOR (CIA) THE FOLLOWING YEAR, HE RESIGNED FROM HIS JOB AND LEFT THE PHILIPPINES ON APRIL

10, 2006 TO WORK AS AN INTERNAL AUDITOR IN A BIG ESTABLISHMENT IN MELBOURNE, AUSTRALIA FOR INCOME TAX PURPOSES, WHICH OF THE FOLLOWING STATEMENTS IS CORRECT WITH RESPECT TO ARCHIE’S CLASSIFICATION?

A) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE WHOLE YEAR OF 2006

B) HIS CLASSIFICATION AS A NON-RESIDENT CITIZEN WILL START IN

2007

C) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE YEAR

2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCES WITHOUT FROM APRIL 10, 2006

D) HE SHALL BE CLASSIFIED AS NON-RESIDENT CITIZEN FOR THE YEAR

2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCES WITHOUT FROM APRIL 11,2006

3 WHO AMONG THE FOLLOWING INDIVIDUAL TAXPAYERS IS TAXABLE ON INCOME WITHIN AND WITHOUT THE PHILIPPINES?

A) ALEX, A NATIVE OF GENERAL SANTOS CITY, WORKING AS OVERSEAS CONTRACT WORKER IN IRAQ

B) PHILANDER RODOLFO, NATURALIZED FILIPINO CITIZEN AND MARRIED TO A FILIPINA HE HAD BEEN LIVING IN OLONGAPO CITY SINCE 1970

C) ALDREDO DE LA HOYA, SPANISH CITIZEN, A RESIDENT OF MADRID, SPAIN, SPENT A ONE WEEK VACATION TRIP IN BORACAY

D) MING HONG, TAIWANESE SINGER, HELD A 3-DAY CONCERT IN MANILA

4 WHICH OF THE FOLLOWING TAXPAYERS WHOSE PERSONAL EXEMPTION

IS SUBJECT TO THE LAW ON RECIPROCITY UNDER THE TAX CODE?-(RPCPA)

A) NON-RESIDENT CITIZEN WITH RESPECT TO HIS INCOME DERIVED FROM OUTSIDE THE PHILIPPINES

B) NON-RESIDENT ALIEN WHO SHALL COME TO THE PHILIPPINES AND STAY HEREIN FOR AN AGGREGATE PERIOD OF MORE THAN 180 DAYS DURING ANY CALENDAR YEAR

C) RESIDENT ALIEN DERIVING INCOME FROM A FOREIGN COUNTRY D) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS IN THE PHILIPINES WHOSE COUNTRY ALLOWS PERSONAL EXEMPTION TO FILIPINOS WHO ARE NOT RESIDING BUT ARE DERIVING INCOME FROM SAID COUNTRY

5 THE PERSONAL EXEMPTION OF THE NON-RESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS IN THE PHILIPPINES IS EQUAL TO THAT ALLOWED BY-(RPCPA)

A) THE INCOME TAX LAW OF HIS COUNTRY TO A RESIDENT CITIZEN OF THE PHILIPPINES NOT RESIDING THERE

B) THE INCOME TAX LAW OF HIS COUNTRY TO A CITIZEN OF THE PHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDED BY THE NIRC TO A CITIZEN OR RESIDENT, WHICHEVER IS LOWER

C) THE NATIONAL INTERNAL REVENUE CODE TO A CITIZEN OR RESIDENT

D) THE INCOME TAX LAW OF HIS COUNTRY ALLOWS TO A CITIZEN OF THE PHILIPPINES NOT RESIDING THERE OR THE AMOUNT PROVIDED

BY THE NIRC TO A CITIZEN OR RESIDENT ALIEN, WHICHEVER IS HIGHER

6 THE TAXPAYER IS A MARRIED NON-RESIDENT ALIEN ENGAGED IN BUSINESS IN THE PHILIPPINES WITH TWO QUALIFIED DEPENDENT CHILDREN HIS COUNTRY GIVES A NON-RESIDENT FILIPINO WITH INCOME FROM THEREFROM A BASIC PERSONAL EXEMPTION (IF MARRIED) OF P20,000 AND ADDITIONAL EXEMPTION OF P4,000 HE IS ENTITLED TO A PERSONAL EXEMPTION OF-(RPCPA)

A) P28,000

B) P26,000

C) P24,000

D) P20,000

7 THE FOLLOWING, EXCEPT ONE, MAY CLAIM PERSONAL (RPCPA)

EXEMPTIONS-A) NONRESIDENT ALIENS NOT ENGAGED IN TRADE OR BUSINESS IN THE PHILIPPINES

B) NONRESIDENT ALIEN ENGAGED IN TRADE OR BUSINESS IN THE PHILIPPINES

C) RESIDENT ALIEN

D) CITIZEN

8 AN EXEMPTION PROVIDED BY LAW TO TAKE CARE OF PERSONAL, LIVING AND FAMILY EXPENSES OF THE TAXPAYER AND THE AMOUNT OF WHICH IS DETERMINED ACCORDING TO THE STATUS OF THE TAXPAYERS ARE:-(RPCPA)

A) OPTIONAL STANDARD DEDUCTION

B) PERSONAL EXEMPTION

C) ADDITIONAL EXEMPTION

D) SPECIAL ADDITIONAL EXEMPTION

9 AN EXEMPTION ALLOWED TO A TAXPAYER WHO HAS QUALIFIED LEGITIMATE, ILLEGITIMATE, OR LEGALLY ADOPTED CHILDFREN-(RPCPA)

A) ADDITIONAL EXEMPTION

B) SPECIAL ADDITIONAL PERSONAL EXEMPTION

C) OPTIONAL STANDARD DEDUCTION

D) PERSONAL EXEMPTION

10.A MAN HAS THREE WIVES UNDER HIS TRIBAL CUSTOMS AND PRACTICE

HE IS ENTITLED TO PERSONAL EXEMPTION APPERTAINING TO-(RPCPA)

A) THE HUSBAND IF HIS INCOME IS HIGHER THAN THE INCOME OF THE WIFE

B) THE SPOUSE WHO HAS A HIGHER INCOME

C) THE HUSBAND

D) THE WIFE

12 THE WIFE CAN CLAIM ADDITIONAL EXEMPTION IF-(RPCPA)

A) THE HUSBAND’S INCOME IS LOWER THAN HER INCOME

B) THE HUSBAND IS A NONRESIDENT CITIZEN WITH INCOME FROM WITHIN AND WITHOUT THE PHILIPPINES

C) THE HUSBAND IS A PURE BUSINESS INCOME EARNER

D) THE HUSBAND HAS NO INCOME OF HIS OWN

13 THE HUSBAND CAN WAIVE HIS RIGHT TO CLAIM THE ADDITIONAL EXEMPTION IN FAVOR OF HIS WIFE IF-

A) HE IS A NONRESIDENT CITIZEN WHOSE INCOME IS PURELY WITHOUT THE PHILIPPINES

B) HE HAS NO INCOME OF HIS OWN

C) HE IS A COMPENSATION INCOME EARNER IN THE PHILIPPINES

D) HIS INCOME IS PURELY SUBJECT TO FINAL WITHHOLDING TAX

14 WHO AMONG THE FOLLOWING QUALIFIES AS A DEPENDENT FOR PURPOSES OF ADDITIONAL EXEMPTION?

SOCIAL SECURITY BENEFITS P24,000

CAROLINE, UNRELATED FRIEND 4,000

DOUGLAS, SON OF NENA 5,000

LALAINE, NENA’S SISTER 7,000

16 WHO OF THE FOLLOWING IS NOT A QUALIFIED DEPENDENT FOR PURPOSES OF CLAIMING ADDITIONAL EXEMPTION?

A) ILLEGITIMATE CHILD

B) LEGALLY ADOPTED CHILD

C) LEGITIMATE CHILD

D) CHILD BY NATURAL ADOPTION

17 MR MAASIKASO, SINGLE, HAS THE FOLLOWING DEPENDENTS WHO ARE LIVING WITH AND ENTIRELY DEPENDENT UPON HIM FOR CHIEF SUPPORT:

ANDREA, CHILD WITH HIS EX-GIRLFRIEND

BARBARA, LEGITIMATE CHILD OF HIS SISTER, LEGALLY ADOPTED BY MR MAASIKASO

CARIDAD, MOTHER, 85 YEARS OLD, WIDOW, BEDRIDDEN

DONATA, GODMOTHER, 80 YEARS OLD

MR MAASIKASO CAN CLAIM ADDITIONAL PERSONAL EXEMPTION ON-

A) ANDREA ONLY

B) ANDREA AND BARBARA

C) ANDREA, BARBARA AND CARIDAD

D) ANDREA, BARBARA, CARIDAD AND DONATA

18 A NATIVE OF LUCENA CITY, SUPPORTING HIS BROTHER, 18 YEARS OLD, UNMARRIED, NOT GAINFULLY EMPLOYED, STUDYING BS ACCOUNTANCY

AT ASIA PACIFIC COLLEGE AT MAKATI CITY, IS ENTITLED TO BASIC PERSONAL EXEMPTION OF-

20 REMY MARTIN, SINGLE, SUPPORTING THE FOLLOWING:

JOHNNY WALKER, ILLEGITIMATE SON, 16 YEARS OLD, STUDYING IN THE UNIVERSIDAD DE JEREZ, CADIZ, SPAIN, LIVING WITH REMY MARTIN’S DIPLOMATIC BROTHER IN ANDALUCIA, SPAIN

TORRES, FATHER, LIVING WITH HIM REMY MARTIN IS GIVING 60% OF THE ENTIRE SUPPORT NEEDED, THE OTHER 40% IS BEING FURNISHED BY HIS SISTER, CHEVAS REGAL

REMY MARTIN CAN CLAIM A TOTAL EXEMPTION OF-

CHILDREN AGES STATUS

B 22 MENTALLY RETARDED

C 19 STUDYING IN MANILA

D 10 STUDYING IN THEIR HOMETOWN

E 8 STUDYING IN THEIR HOMETOWN

F 6 STUDYING IN THEIR HOMETOWN

G 3 TAKEN BY THE GRANDPARENTS

AFTER THE DEATH OF THE FATHER

FOR PURPOSES OF TAXABLE YEAR 2009, HOW MUCH EXEMPTION WOULD LIZA BE ENTITLED TO?-(RPCPA)

A) P150,000

B) 57,000

C) 64,000

D) 73,000

NUMBERS 23 AND 24 ARE BASED ON THE FOLLOWING INFORMATION:

23 IN 2009, PIDOL’S WIFE DIED OF A CAR ACCIDENT HIS DEPENDENTS ARE

AS FOLLOWS:

CHILDREN STATUS

A 22 Y/O, EMPLOYED ON JULY 12, 2009

B 21 Y/O ON JANUARY 2, 2009

C 18 Y/O, MARRIED ON JANUARY 31, 2009

D 17 Y/O, GAINFULLY EMPLOYED ON OCTOBER 1, 2009

E 15 Y/O, AFFLICTED WITH SORE EYES ON MAY 6, 2009

F 13 DIED OF AN ACCIDENT IN 2009

G BROTHER, 28 Y/O PARALYTIC

FOR TAXABLE YEAR 2009, PIDOL CAN CLAIM ADDITIONAL EXEMPTIONS OF-

25 ANGIE, WIDOW, EARNING AN ANNUAL GROSS COMPENSATION INCOME

OF P300,000 HAS THE FOLLOWING DEPENDENT CHILDREN IN 2009:

AUBREY- BABY, BORN ON JANUARY 31;

BARBARA- CELEBRATED HER 21ST BIRTHDAY LAST JUNE 12;

CRISTETA- MARRIED ON JANUARY 1;

DIANA- GAINFULLY EMPLOYED EFFECTIVE JULY 1;

ELIZA- DIED OF DENGUE FEVER ON SEPTEMBER 30;

ASSUMING ANGIE HAS TWO EMPLOYERS, HER TAXABLE INCOME IN 2009 IS-

A) SALARY RECEIVED BY A MANAGING PARTNER OF A GENERAL PROFESSIONAL PARTNERSHIP

B) A PASSIVE INCOME IN THE FORM OF A PRIZE WON IN A RAFFLE AMOUNTING TO P4,000

C) A GAIN FROM SALE OF A MOTOR VEHICLE AS ANOTHER INCOME OF

A TAXPAYER WHO IS A COMPENSATION INCOME EARNER

D) A GAIN ON SALE OF A REAL PROPERTY FOR PRIVATE USE OF THE FAMILY OF THE TAXPAYER

28 WHICH OF THE FOLLOWING INCOME IS SUBJECT TO FINAL TAX IF RECEIVED BY AN INDIVIDUAL TAXPAYER?

I SHARE OF A PARTNER IN THE NET INCOME OF A BUSINESS

PARTNERSHIP

II CASH DIVIDEND RECEIVED BY A STOCKBROKER FROM A DOMESTIC

CORPORATION

III WINNINGS IN LOTTO

IV RAFFLE PRIZES AMOUNTING TO P6,000

A) I AND II

B) III AND IV

C) I, II AND IV

D) I, II, III AND IV

29 WHICH OF THE FOLLOWING IS NOT A REQUISITE FOR DEDUCTIBILITY

OF HEALTH INSURANCE?

A) THE TOTAL FAMILY INCOME IS NOT MORE THAN P250,000

B) THE MAXIMUM AMOUNT OF PREMIUM DEDUCTIBLE DURING THE YEAR IS P2,400 PER FAMILY OR P200 A MONTH

C) IN THE CASE OF MARRIED INDIVIDUAL, THE SPOUSE CLAIMING THE ADDITIONAL EXEMPTION SHALL BE ENTITLED TO CLAIM THE INSURANCE PREMIUMS PAID

D) THE TAXPAYER MUST BE A HEAD OF FAMILY

30.STATEMENT 1: HEALTH AND/OR HOSPITALIZATION INSURANCE PREMIUMS PAID BY AN INDIVIDUAL IS DEDUCTIBLE ONLY IF THE TAXPAYER IS A PURE COMPENSATION INCOME EARNER

STATEMENT 2: A TAXPAYER WHO HAS PAID A MONTHLY HEALTH INSURANCE OF P400 FOR SIX MONTHS IN A YEAR CAN CLAIM TOTAL DEDUCTIBLE AMOUNT OF P2,400

TO AN INSURANCE COMPANY FOR HIS HEALTH INSURANCE HOW MUCH IS HIS TAXABLE INCOME?

WHICH OF THE FOLLOWING STATEMENTS IS CORRECT?

A) FOR PHILIPPINE INCOME TAX PURPOSES, RUSTOM MAY DEDUCT FROM HIS GROSS INCOME HIS PERSONAL EXEMPTION

OF P50,000 OR THE AMOUNT ALLOWED IN THAT COUNTRY, WHICHEVER IS LOWER

B) FOR PHILIPPINE INCOME TAX PURPOSES, RUSTOM’S GROSS INCOME IS SUBJECT TO A CREDITABLE WITHHOLDING TAX OF 10%

C) RUSTOM’S GROSS INCOME OF P2 MILLION IS NOT TAXABLE IN THE PHILIPPINES

D) FOR PHILIPPINE INCOME TAX PURPOSES, HE IS NO LONGER ENTITLED TO CLAIM ADDITIONAL EXEMPTION ON ROBINA BECAUSE HE IS ALREADY CLASSIFIED AS A NON-RESIDENT ALIEN ENGAGED IN BUSINESS IN FOREIGN COUNTRY

34 CASE 1: PEPE, A CPA, HAD SIGNED A LEGALLY ENFORCEABLE AGREEMENT WITH HIS WIFE, PILAR, THAT THE EARNINGS FROM THE EXERCISE OF HIS PROFESSION WOULD BE SHARED EQUALLY BETWEEN THEM FOR PURPOSES OF COMPUTING THE INCOME TO BE REPORTED IN THEIR RESPECTIVE INDIVIDUAL INCOME TAX RETURN IS THE AGREEMENT VALID?

CASE 2: LORENZO ADVISED HIS DAUGHTER, LORENA THAT THE RENT INCOME ON THE DORMITORY OWNED BY LORENZO WILL ACCRUE TO THE LATTER LORENA COLLECTED THE INCOME AND REPORTED IT ON HER OWN RETURN WERE THE ACTIONS TAKEN BY LORENZO AND LORENA VALID?

A) YES, NO

B) YES, YES

C) NO, YES

D) NO, NO

ITEMS 35 TO 37 ARE BASED ON THE FOLLOWING INFORMATION:

BUSINESS INCOME, PHILIPPINES P300,000

BUSINESS INCOME, UNITED STATES 250,000

EXPENSES, PHILIPPINES 200,000

EXPENSES, UNITED STATES 125,000

INTEREST ON DEPOSIT WITH METROBANK 3,000

INTEREST ON DEPOSIT IN U.S.($1=P40) $500

CASH PRIZE WON IN A LOCAL CONTEST P6,000

CASH PRIZE WON IN A CONTEST IN U.S 10,000

WINNINGS IN LOTTO 20,000

WINNINGS IN LOTTO IN U.S 50,000

DIVIDENDS FROM SMC, A DOMESTIC COMPANY 25,000

35 THE TAXABLE INCOME IF SHARON IS A RESIDENT CITIZEN, SINGLE IS-

NUMBERS 38 TO 40 ARE BASED ON THE FOLLOWING INFORMATION:

ELVIS AND MADONNA, HUSBAND AND WIFE, HAVE THE FOLLOWING DATA

IN 2009:

ELVIS MADONNA COMPENSATION INCOME P125,000 P60,000

BY THE WIFE OR THE HUSBAND

38 THE INCOME TAX PAYABLE/OVERPAYMENT OF ELVIS IS-