Test bank income taxation (1)

WHICH OF THE FOLLOWING STATEMENTS IS NOT CORRECT?-RPCPAA TAXES MAY BE IMPOSED TO RAISE REVENUE OR TO PROVIDEDISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATEB THE STATE CAN HAVE THE P

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 GENERALLYACCEPTED 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 ATGROSS INCOME

B) SEPARATE GRADUATED RATES ARE IMPOSED ON DIFFERENTTYPES OF INCOME

C) CAPITAL GAINS ARE EXCLUDED IN DETERMINING GROSSINCOME

D) COMPENSATION INCOME AND BUSINESS/PROFESSIONALINCOME ARE ADDED TOGETHER IN ARRIVING AT GROSSINCOME

6 ONE OF THE FOLLOWING IS A PRIMARY PURPOSE OF TAXATION

A)PROTECTION OF LOCAL INDUSTRIES AGAINST FOREIGNCOMPETITION THROUGH IMPOSITION OF HIGH CUSTOMS DUTIES ONIMPORTED GOODS

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

C) TO SECURE REVENUE FOR THE SUPPORT OF THE GOVERNMENT

D) STRENGTHENING OF ANEMIC ENTERPRISES BY GIVING TAXEXEMPTION

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

A) TO SERVE AS KEY INSTRUMENT OF SOCIAL CONTROL

B) TO EFFECT A MORE EQUITABLE DISTRIB UTION OF WEALTHAMONG PEOPLE

C) TO ACHIEVE SOCIAL AND ECONOMIC STABILITY

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

8 WHICH IS THE BEST ANSWER? A TAX REFORM AT ANY GIVEN TIMEUNDERSCORES 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 ANYAMOUNT 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 BASICPRINCIPLES OF THE SOUND TAX SYSTEM

A) FISCAL ADEQUACY

D) NONE OF THE ABOVE

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

A) IT SHOULD BE CAPABLE OF BEING EFFECTIVELY ENFORCED

B) IT MUST BE PROGRESSIVE

C) SOURCES OF REVENUE MUST BE SUFFICIENT TO MEETGOVERNMENT 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 ASOUND 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 OFJAPAN ENTERED INTO AN EXECUTIVE AGREEMENTIN RESPECT OF ALOAN FACILITY TO THE PHILIPPINES FROM JAPAN WHEREBY IT WASSTIPULATED THAT INTEREST ON LOANS GRANTED BY PRIVATEJAPANESE FINANCIAL INSTITUTIONS IN THE PHILIPPINES SHALL NOT

BE SUBJECT TO PHILIPPINE INCOME TAXES WHAT BASICCHARACTERISTIC OF TAXATION HAS BEEN VIOLATED BY THISAGREEMENT?

BE ALTERNATIVE SITES OF BUSINESS BECAUSE-(RPCPA)

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

B) THE LOCAL TAXES OF A POLITICAL SUBDIVISION NEED NOT BEUNIFORM WITH THE LOCAL TAXES OF ANOTHER POLITICALSUBDIVISION

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

D) LOCAL BUSINESS TAXES MAY BE CREDITED AGAINST NATIONALBUSINESS TAXES

17 STATE,MENT 1:THE POWER OF TAXATION IS INHERENT INSOVEREIGNTY BEING ESSENTIAL TO THE EXISTENCE OF EVERYGOVERNMENT HENCE, EVEN IF NOT MENTIONED IN THECONSTITUTION, THE STATE CAN STILL EXERCISE THE POWER

STATEMENT 2:IT IS ESSENTIALLY A LEGISLATIVE FUNCTION EVEN INTHE ABSENCE OF ANY CONSTITUTIONAL PROVISION, TAXATIONPOWER FALLS TO CONGRESS AS PART OF THE GENERAL POWER OFLAWMAKING.-(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 PROVIDEDISINCENTIVES TO CERTAIN ACTIVITIES WITHIN THE STATE

B) THE STATE CAN HAVE THE POWER OF TAXATION EVEN IF THECONSTITUTION DOES NOT NECESSARILY GIVE IT THE POWER TO TAXC) FOR THE EXERCISE OF THE POWER OF TAXATION, THE STATE CANJTAX ANYTHING AT ANY TIME

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

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

A) THE CONTENTION OF CONDE IS TENABLE

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

C) THE CONTENTION OF CONDE IS NOT JUSTIFIED BECAUSE THERULE ON UNIFORMITY IS NOT VIOLATED CONSIDERING THATTHE ORDINANCE WOULD ALSO IMPOSE ON ALLAIRCONDITIONING TECHNICIAN WHO MAY COME WITHIN THEJURISDICTION OF THE CITY

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

22 TREATING PERSONS WHO ARE SIMILARLY SITUATED IN THE SAMEMANNER-

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 FORRACEHORSES AND BOARDING HORSES THAT ARE NOT FORRACING

B) WHOLESALE DEALERS IN OIL ARE SUBJECT TO OCCUPATIONTAX WHILE WHOLESALE DEALERS IN OTHER ARTICLES SCU ASSUGAR, BACON, COAL, IRON AND OTHER THINGS ARE NOT SOSUBJECT

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

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

24 THE LUNG CENTER OF THE PHILIPPINES, A CHARITABLEINSTITUTION, 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 WHOUSE THE SAME AS THEIR PRIVATE CLINICS FOR THEIRPATIENTS WHOM THEY CHARGE FOR THEIR PROFESSIONALFEES

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

ITS PATIENTS, WHETHER PAYING OR NON-PAYINGIII 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 CENTERWHICH PORTION IS SUBJECT TO REAL PROPERTY TAX?

STATEMENT 2: A BUILDING BEING LEASED BY ITS OWNER TO A PRIVATEEDUCATIONAL INSTITUTION FOR USE AS CLASSROOMS IS EXEMPT FROMPROPERTY YAX

STATEMENT 3: INCOME OF A NON-STOCK, NON-PROFIT EDUCATIONALINSTITUTION RUN BY THE ARCHDIOCESE IS EXMEPT FROM TAX PROVIDEDTHAT INCOMES ARE ACTUALLY, DIRECTLY AND EXCLUSIVELY USED FOREDUCATIONAL PURPOSES

WHICH OF THE STATEMENTS ARE CORRECT?

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

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

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

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 BERENTED OUT TO A BUSINESS ESTABLISHMENT?

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

C) WILL THE INCREASE IN TUITION FEES BE SUBJECT TO INCOMETAX IF IT RESULTS TO NET INCOME FROM SCHOOLOPERATIONS?

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

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

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

A) THE IMPORTATION OF LABORATORY EQUIPMENTS-FROMCUSTOMS DUTIES

B) THE SCHOOL BEING RENTED BY THE SCHOOL-FROM REALPROPERTY TAX

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

D) THE INCOME FROM OPERATION-FROM INCOME TAX

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

TO TAX ? WHAT KIND OF TAX?

A) THE SCHOOL BUILDING OWNED BY THE SCHOOL-FROMREAL 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 AFASTFOOD 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 WHICHARE OWNED BY DIFFERENT ENTITIES WHICH OF THEFOLLOWING IS SUBJECT TO REAL ESTATE TAX?

10-A) CEMENTERIO MUNICIPAL DEL SAN FRANCISCO-A GOV’TCEMETERY OWNED BY THE MUNICIPALITY WHICH WAS

ESTABLISHED FOR THE PURPOSE OF USING IT AS BURIALGROUND OF THE PAUPERS OF SAN FRANCISCO

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

C) LAST TRIP MEMORIAL PARK-OWNED BY A CORPOR5ATIONWHERE DIVIDENDS ARE DISTRIBUTED TO THE SHAREHOLDERS

AT THE END OF THE YEAR

D) QUITA-QUITA MEMORIAL PARK-OWNED BY AN ASSOCIATIONCONSISTING OF 100 DIFFERENT FAMILIES; EACH FAMILY OWNSSEVERAL SQUARE METERS OF LOT; NOT A SINGLE PORTION ISHELD FOR SALE TO EITHER MEMBER OR NON-MEMBERS OFTHE ASSOCIATION

31.ALL APPROPRIATIONS, REVENUE OR TARIFF BILLS, BILLSAUTHORIZING INCREASE OF PUBLIC DEBT, BILLS OF LOCALAPPLICATION, 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 ONWHICH SAME BILL THE SENATE MAY PROPOSE AMENDMENTS

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

C) MAY HAVE A HOUSE VERSION AND SENATE VERSION APPROVEDSEPARATELY

D) MAY BE RECOMMENDED BY THE PRESIDENT TO CONGFRESS

33.CONGRESSMAN ERIN TANADA OF QUEZON AND SENATOR JUANPONCE ENRILE SPONSORED A BILL IN THE HOUSE OF REPRESENTATIVESAND THE SENATE, RESPECTIVELY, INCREASING THE PERSONALEXEMPTIONS OF INDIVIDUAL TAXPAYERS AS WELL AS GRANTING TAXEXEMPTION TO MINIMUM WAGE EARNERS WHICH OF THE FOLLOWING

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

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

34.NO LAW GRANTING ANY TAX EXEMPTION SHALL BE PASSED WITHOUTTHE 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 ORNON-PAYMENT OF TAXES

B) THE PASSAGE OF LAWS GRANTING TAX EXEMPTIONS REQUIRES THECONCURRENCE BY A MAJORITY OF ALL THE MEMBERS OFCONGRESS

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

BE IMPAIRED

D) THE REVENUES AND ASSETS OF NON-STOCK, NON-PROFITEDUCATIONAL INSTITUTIONS AND DONATIONS FFOR EDUCATIONALPURPOSES ARE EXEMPTED FROM TAXES AND DUTIES

36.THEY RESTRICT THE EXERCISE OF THE POWER OF TAXATION ALTHOUGHTHEY 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 OFONE COUNTRY MAY NOT BE TAXED BY ANOTHER COUNTRY” THIS ISKNOWN AS-(RPCPA)

A) INTERNATIONAL LAW

B) RECIPROCITY PROVISIONS

C) PRINCIPLE OF TERRITORIALITY

D) EXEMPTION IN THE TAX CODE

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

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 ALLOWPAYMENT 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 PROPERTIESB) REAL ESTATE TAX ON REAL PROPERTIES

C) ESTATE TAX ON INHERITED PERSONAL AS WELL AS REALPROPERTIES

D) DONOR’S TAX ON DONATION OF PROPERTY

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

A) TRANSFER TAX

B) SALES TAX

C) REAL PROPERTY TAX

D) INCOME TAX

50 SHARON, A CPA HAS JUST OBTAINED HER CPA LICENSE BEFORE SHECAN LAWFULLY PURSUE HER OCCUPATION, SHE SHOULD PAY-(RPCPA)

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 SERVICEAND 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 THEACTUAL VALUE OF THE GROSS OUTPUT OR MINERAL PRODUCTSEXTRACTED IS-(RPCPA)

59.TAX LEVIED FOR PARTICULAR OR SPECIFIC PURPOSE IRRESPECTIVE

OF WHETHER REVENUE IS ACTUALLY RAISED OR NOT

TO THE OWNER A JUST COMPENSATION

A) POWER OF EMINENT DOMAIN

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 DISTINGUISHEDFROM TAXATION?-(RPCPA)

A) IT CAN ONLY BE IMPOSED ON SPECIFIC PROPERTY OR PROPERTIESB) THE AMOUNT IMPOSED DEPENDS ON WHETHER THE ACTIVITY ISUSEFUL 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 THEPROPERTY

B) MAYBE EXERCISED BY PRIVATE INDIVIDUALS

C) SUPERIOR TO THE NON-IMPAIRMENT CLAUSE OF THE CONSTITUTIOND) PROPERTY IS TAKEN BY THE GOV’T FOR PUBLIC PURPOSE

69 AFTER HAVING BEEN INFORMED THAT SOME MASSAGE PARLORS AREBEING USED AS FRONTS FOR PROSTITUTION, THE SANGGUNIANGPANLUNGSOD OF MANILA PASSED A TAX ORDINANCE SUBJECTINGMASSAGE PARLORS WITHIN ITS JURISDICTION TO SUCH ONEROUS TAXESTHAT LEAVE THEM NO OTHER ALTERNATIVE BUT TO STOP OPERATING THEPASSAGE 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 THEABSENCE OF A CONSTITUTIONAL PROVISION GRANTING SAID BODY THEPOWER TO TAX

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

A) POWER OF TAXATION

B) POLICE POWER

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 HISMONEY 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 BUSINESSILLEGAL

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 ATAX 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 AMOUNTTHAT MAY BE IMPOSED

D) ANSWER IS NOT GIVEN

76 WHICH OF THE FOLLOWING TERMS DESCRIBES THIS STATEMENT “THATTHE STATE HAS COMPLETE DISCRETION ON THE AMOUNT TO BE IMPOSEDAFTER DISTINGUISHING BETWEEN A USEFUL AND NON-USEFULACTIVITY?”-(RPCPA)

A) TAX

B) LICENSE FEE

C) TOLL

D) CUSTOMS DUTY

77 WHICH OF THE FOLLOWING IS NOT A DISTINCTION OR SIMILARITY OFLICENSE FEE FROM TAX?-(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 ATOLL

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 ANYOTHER SOURC E

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

86 WHICH OF THE FOLLOWING IS NOT AN ELEMENT OF DIRECT DUPLICATETAXATION WHICH IS VIOLATIVE OF THE EQUAL PROTECTIONANDUNIFORMITY 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 ONE-(RPCPA)

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 DOUBLETAXATION

STATEMENT 2: IF DOUBLE TAXATION OCCURS, THE TAXPAYER MAY SEEKRELIEF UNDER THE UNIFORMITY CLAUSE OR THE EQUAL PROTECTIONGUARANTEE-(RPCPA)

OF THE FOLLOWING TAXES HAS BEEN WRONGLY IMPOSED ON HIM?

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 THEAPARTMENT HOUSE

D) INCOME TAX ON INCOME FROM RENT

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

A) THERE IS NO CONSTITUTIONAL PROHIBITION ON DOUBLE TAXATIONB) DIRECT DUPLICATE TAXATION IS A VALID DEFENSE AGAINST A TAXMEASURE IF IT IS VIOLATIVE OF THE EQUAL PROTECTION CLAUSEC) ABSENCE OF ANY OF THE ELEMENTS OF DIRECT DOUBLE TAXATIONMAKES IT INDIRECT DUPLICATE TAXATION

D) A 20% FINAL WITHHOLDING TAX ON INTEREST INCOME ON BANKDEPOSITS AND A 5% GROSS RECEIPTS TAX ON BANKS IS A DIRECTDUPLICATE TAXATION

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

A) THE MANUFACTURER TRANSFERS THE TAX TO THE CONSUMER BYADDING THE TAX TO THE SELLING PRICE OF THE GOODS SOLD

B) THE PURCHASER ASKS FOR A DISCOUNT OR REFUSE TO BUY ATREGULAR PRICE UNLESS IT IS REDUCED BY AN AMOUNT EQUAL TOTHE TAX HE WILL PAY

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

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

93 THE REDUCTION IN THE SELLING PRICE OF INCOME-PRODUCINGPROPERTY BY AN AMOUNT EQUAL TO THE CAPITALIZED VALUE OF FUTURETAXES 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 TAXWHICH PERSONS AND CORPORATIONS GENERALLY WITHIN THE SAMETAXING DISTRICT ARE OBLIGED TO PAY

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

WHICH OF THE ABOVE STATEMENTS IS TRUE?

ON THE TRANSACTION MADE IT APPEAR ON THE DEED OF SALE THATTHE SELLING PRICE WAS ONLY P200,000 ALTHOUGH IT WAS ACTUALLYP300,000

III.REFRAINING FROM ENGAGING IN ACTIVITES SUBJECT TO TAX

IV.ABUSADO INSURANCE CORPORATION SOLD ITS OFFICE BUILDING TOADAN FOR P100 MILLION, WHO IN TURN, SOLD THE SAME PROPERTY TODUGONG-BUGHAW, INC FOR P200 MILLION THESE 2 TRANSACTIONSWERE EVIDENCED BTY DEEDS OF ABSOLUTE SALE NOTARIZED ON THESAME 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 TAXRETURNS, 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 THATTAX EXEMPTIONS MUST BE STRICTLY CONSTRUED AGAINST THETAXPAYER

A) WHERE THE STATUTE GRANTING THE EXEMPTION PROVIDES FORLIBERAL INTERPRETATION THEREOF

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

C) IN CASE OF SPECIAL TAXES RELATING TO SPECIAL CASES ANDAFFECTING 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 THEFRANCHISE

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 TAXARE 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 LAWUNCONSTITUTIONAL?-(RPCPA)

A) NO LAW SHALL BE PASSED IMPAIRING THE OBLIGATION OFCONTRACT

B) THE RULE OF TAXATION SHALL BE UNIFORM

C) NO PERSON SHALL BE DEPRIVED OF PROPERTY WITHOUT DUEPROCESS OF LAW

D) NONE OF THE ABOVE

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

STATEMENT 2: AS A RULE, TAXES ARE SUBJECT TO SET-OFF ORCOMPENSATION

A) RECOMMENDATION BY THE COMMISSIONER OF INTERNAL REVENUE

TO THE SECRETARY OF FINANCE

B) APPROVAL BY THE SECRETARY OF FINANCE

C) LEGISLATION BY CONGRESS

D) PUBLICATION IN A NEWSPAPER OF GENERAL CIRCULATION

108 STATEMENT 1: IN CASE OF CONFLICT BETWEEN A REVENUEREGULATION AND THE PROVISIONS OF THE NATIONAL INTERNALREVENUE CODE, THE LATTER SHALL PREVAIL

STATEMENT 2: THE REVOCATION OF A REVENUE REGULATION CAN NOT BEMADE 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 A) LEGISLATIONS, TAX TREATIES AND TAX ORDINANCES

LAWS-B) JUDICIAL DECISIONS

C) OPINIONS OF AUTHORS

D) ADMINISTRATIVE RULES AND REGULATIONS

110 THE LEAST SOURCE OF TAX LAW

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

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

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

4 THE PRESIDENT CAN VETO ANY PARTICULAR ITEM IN A REVENUE ORTARIFF 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 GOVERNMENTUNITS, SUBJECT TO LIMITATIONS THAT MAY BE SET BY LAW

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

7 THE PRESIDENT OF THE PHILIPPINES IS EMPOWERED TO GRANT TAXEXEMPTION 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 OFPOWER.

11 LANDS AND BUILDINGS BEING USED ACTUALLY, DIRECTLY ANDEXCLUSIVELY FOR RELIGIOUS AND CHARITABLE PURPOSES BYCHURCHES AND CHARITABLE INSTITUTIONS ARE EXEMPT FROMINCOME AND PROPERTY TAXES

12 A PORTION OF A SCHOOL BUILDING WHICH IS BEING LEASED TO AMARKETING FIRM FOR COMMERCIAL PURPOSES IS EXEMPT FROMPROPERTY TAX

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

14 TAX LAWS CAN NEVER HAVE A RETROACTIVE EFFECT

15 THE GOVERNMENT CAN NOT TAX ITS AGENCIES ANDINSTRUMENTALITIES

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

17 IN THE PHILIPPINES, THERE MAY BE DOUBLE TAXATION

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

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

20 RECIPROCITY RULE APPLIES TO CITIZENS OF THE PHILIPPINES ANDRESIDENT ALIEN ONLY

21 THE INHERENT POWERS ARE EXERCISED PRIMARILY BY THELEGISLATURE

22 THE RULE OF TAXATION SHALL BE UNIFORM AND EQUITABLE

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

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

25 THE THREE INHERENT POWERS ARE METHODS BY WHICH THE STATEINTERFERES WITH PRIVATE RIGHT.

26 THE SALARY OF THE PRESIDENT OF THE PHILIPPINES AND OF THEJUSTICES 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 INTOANY JURISDICTION TO SEIZE UPON PERSON OR PROPERTY

30 A PERSON CAN OBJECT OR RESIST THE PAYMENT OF TAXES SOLELYBECAUSE NO PERSONAL BENEFIT TO HIM CAN BE POINTED ASARISING 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 DELIBERATELYOMITS 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 THEGOVERNMENT

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

37 AS A POWER, TAXATION REFERS TO THE INHERENT POWER OF THESTATE 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 ITSHOULD ALWAYS BE AIMED AT REVENUE COLLECTION.

41 THE POWER OF THE STATE TO TAX EXISTS BY VIRTUE OF AN EXPRESSPROVISION 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 MEETTHE DEMANDS OF PUBLIC EXPENDITURE EVEN DURING ADVERSEECONOMIC CONDITION

45 STATUTORY TAX EXEMPTIONS MAY BE REVOKED BY THE CONGRESS

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

47 NON-PAYMENT OF ADDITIONAL COMMUNITY TAX IS A GROUND FORIMPRISONMENT

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

49 A REVENUE REGULATION CAN EXPAND THE PROVISION OF LAW BYIMPOSING A PENALTY EVEN IF THE LAW THAT IT IMPLEMENTS DOESNOT 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 DEFINITEPURPOSE WHICH IN ITS NATURE MAY BE PROMPTLY ACCOMPLISHEDB) AN ALIEN WHO COMES TO THE PHILIPPINES FOR A DEFINITEPURPOSE WHICH IN ITS NATURE WOULD REQUIRE AN EXTENDEDSTAY

C) AN ALIEN WHO HAS ACQUIRED RESIDENCE IN THE PHILIPPINESD) AN ALIEN WHO LIVES IN THE PHILIPPINES WITH NO DEFINITEINTENTION AS TO HIS STAY

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

10, 2006 TO WORK AS AN INTERNAL AUDITOR IN A BIG ESTABLISHMENT INMELBOURNE, AUSTRALIA FOR INCOME TAX PURPOSES, WHICH OF THEFOLLOWING STATEMENTS IS CORRECT WITH RESPECT TO ARCHIE’SCLASSIFICATION?

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

B) HIS CLASSIFICATION AS A NON-RESIDENT CITIZEN WILL START IN2007

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

2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCESWITHOUT FROM APRIL 10, 2006

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

2006 WITH RESPECT TO HIS INCOME DERIVED FROM SOURCESWITHOUT FROM APRIL 11,2006

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

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

B) PHILANDER RODOLFO, NATURALIZED FILIPINO CITIZEN ANDMARRIED TO A FILIPINA HE HAD BEEN LIVING IN OLONGAPO CITYSINCE 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 INMANILA

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 DERIVEDFROM OUTSIDE THE PHILIPPINES

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

C) RESIDENT ALIEN DERIVING INCOME FROM A FOREIGN COUNTRY

D) NON-RESIDENT ALIEN NOT ENGAGED IN TRADE OR BUSINESS IN THEPHILIPINES WHOSE COUNTRY ALLOWS PERSONAL EXEMPTION TOFILIPINOS WHO ARE NOT RESIDING BUT ARE DERIVING INCOMEFROM SAID COUNTRY

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

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

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

C) THE NATIONAL INTERNAL REVENUE CODE TO A CITIZEN ORRESIDENT

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

BY THE NIRC TO A CITIZEN OR RESIDENT ALIEN, WHICHEVER ISHIGHER

6 THE TAXPAYER IS A MARRIED NON-RESIDENT ALIEN ENGAGED INBUSINESS IN THE PHILIPPINES WITH TWO QUALIFIED DEPENDENTCHILDREN HIS COUNTRY GIVES A NON-RESIDENT FILIPINO WITH INCOMEFROM THEREFROM A BASIC PERSONAL EXEMPTION (IF MARRIED) OFP20,000 AND ADDITIONAL EXEMPTION OF P4,000 HE IS ENTITLED TO APERSONAL EXEMPTION OF-(RPCPA)

8 AN EXEMPTION PROVIDED BY LAW TO TAKE CARE OF PERSONAL, LIVINGAND FAMILY EXPENSES OF THE TAXPAYER AND THE AMOUNT OF WHICH ISDETERMINED 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 QUALIFIEDLEGITIMATE, 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) A SINGLE INDIVIDUAL

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

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 FROMWITHIN 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 ADDITIONALEXEMPTION IN FAVOR OF HIS WIFE IF-

A) HE IS A NONRESIDENT CITIZEN WHOSE INCOME IS PURELY WITHOUTTHE 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 FORPURPOSES 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

D) CHILD BY NATURAL ADOPTION

17 MR MAASIKASO, SINGLE, HAS THE FOLLOWING DEPENDENTS WHO ARELIVING 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 A) ANDREA ONLY

ON-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 BASICPERSONAL EXEMPTION OF-

20 REMY MARTIN, SINGLE, SUPPORTING THE FOLLOWING:

JOHNNY WALKER, ILLEGITIMATE SON, 16 YEARS OLD, STUDYING IN THEUNIVERSIDAD DE JEREZ, CADIZ, SPAIN, LIVING WITH REMY MARTIN’SDIPLOMATIC BROTHER IN ANDALUCIA, SPAIN

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

REMY MARTIN CAN CLAIM A TOTAL EXEMPTION

CHILDREN AGES STATUS

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 FATHERFOR PURPOSES OF TAXABLE YEAR 2009, HOW MUCH EXEMPTION WOULDLIZA 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 EXEMPTIONSOF-

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 2009IS-

D) 87,000

27 WHICH OF THE FOLLOWING INCOME DERIVED FROM WITHIN THEPHILIPPINES BY A RESIDENT ALIEN IS NOT SUBJECT TO THE RATES INSECTION 24(A) OF THE NIRC?-(RPCPA)

A) SALARY RECEIVED BY A MANAGING PARTNER OF A GENERALPROFESSIONAL PARTNERSHIP

B) A PASSIVE INCOME IN THE FORM OF A PRIZE WON IN A RAFFLEAMOUNTING 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 THEFAMILY OF THE TAXPAYER

28 WHICH OF THE FOLLOWING INCOME IS SUBJECT TO FINAL TAX IFRECEIVED 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 THEYEAR IS P2,400 PER FAMILY OR P200 A MONTH

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

D) THE TAXPAYER MUST BE A HEAD OF FAMILY

30.STATEMENT 1: HEALTH AND/OR HOSPITALIZATION INSURANCEPREMIUMS PAID BY AN INDIVIDUAL IS DEDUCTIBLE ONLY IF THETAXPAYER IS A PURE COMPENSATION INCOME EARNER

STATEMENT 2: A TAXPAYER WHO HAS PAID A MONTHLY HEALTHINSURANCE OF P400 FOR SIX MONTHS IN A YEAR CAN CLAIM TOTALDEDUCTIBLE AMOUNT OF P2,400

AN INSURANCE COMPANY FOR HIS HEALTH INSURANCE HOW MUCH

IS HIS TAXABLE INCOME?

A) FOR PHILIPPINE INCOME TAX PURPOSES, RUSTOM MAYDEDUCT 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 GROSSINCOME IS SUBJECT TO A CREDITABLE WITHHOLDING TAX OF10%

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

D) FOR PHILIPPINE INCOME TAX PURPOSES, HE IS NO LONGERENTITLED TO CLAIM ADDITIONAL EXEMPTION ON ROBINABECAUSE HE IS ALREADY CLASSIFIED AS A NON-RESIDENTALIEN ENGAGED IN BUSINESS IN FOREIGN COUNTRY

34 CASE 1: PEPE, A CPA, HAD SIGNED A LEGALLY ENFORCEABLEAGREEMENT WITH HIS WIFE, PILAR, THAT THE EARNINGS FROM THEEXERCISE OF HIS PROFESSION WOULD BE SHARED EQUALLYBETWEEN THEM FOR PURPOSES OF COMPUTING THE INCOME TO BEREPORTED IN THEIR RESPECTIVE INDIVIDUAL INCOME TAX RETURN

IS THE AGREEMENT VALID?

CASE 2: LORENZO ADVISED HIS DAUGHTER, LORENA THAT THE RENTINCOME ON THE DORMITORY OWNED BY LORENZO WILL ACCRUE TO THELATTER LORENA COLLECTED THE INCOME AND REPORTED IT ON HEROWN RETURN WERE THE ACTIONS TAKEN BY LORENZO AND LORENAVALID?

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, SINGLEIS-

A) P261,000

B) 334,000

C) 291,000

D) 306,000

36.THE TAXABLE INCOME IF SHARON IS A NON-RESIDENT ALIEN ETB,MARRIED WITH FIVE(5) DEPENDENT CHILDREN-

NUMBERS 38 TO 40 ARE BASED ON THE FOLLOWING INFORMATION:

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

IN 2009:

ELVIS MADONNACOMPENSATION INCOME P125,000 P60,000

BY THE WIFE OR THE HUSBAND

38 THE INCOME TAX PAYABLE/OVERPAYMENT OF ELVIS