TAX 1

1. The Supreme Court ruled that taxpayers owe honesty to government just as government owes fairness to taxpayers in the case of (Gen. Prin)a. Commissioner vs. Algue b. BPI Family Savings Bank vs. Court of Appealsc. Commissioner vs. Tokyo shipping Co. d. Philippine Guaranty Co. Inc. vs. Commissioner.

2. The principle on progressivity in taxation is premised on the following objective: (rephrase) (Gen. Prin)a. to avoid regressively in taxationb. encourage economic growthc. increased revenue d. reduced social inequality.

3. The ruled that while taxes are intended for general benefits, special benefits to taxpayers are not required is pursuant to (Gen. Prin)a. general welfare testb. purpose testc. benefit-protection theory d. lifeblood

4. The exercise of the power to tax by the government is so awesome, plenary, supreme, comprehensive and unlimited as cited in the case of (Gen. Prin)a. McCullough vs. Maryland b. Panhandle Oil Co. vs. Mississippic. Moor vs. Altond. Weaver vs. Scott

5. The jurisprudence that when the transaction itself is the one that is tax-exempt, but through error the seller pays the tax and shifts the same to the buyer, the seller gets the refund, but must hold it in trust for the buyers was established in the case of (Gen. Prin)a. Philippine Acetylene Co. vs. Comm. b. Commissioner vs. Gotano c. Maceda vs. Macaraigd. Collector vs. American Rubber Co.

6. When the classification for taxation is prompted by a spirit of hospitability or discrimination, the same is violativeof (Gen. Prin)a. due process of law b. equal protection of law c. uniformity of taxationd. public purpose

7. Condonation of taxes due and payable to the exclusion of taxes already collected complies with the rule on (Gen. Prin)

a. uniformity b. equal protection of lawc. tax exemption d. tax amnesty

8. If a jeopardy assessment is issued by the BIR, the recourse of the taxpayers is (Rem)a. to appeal to the Court of Tax Appeals. b. file a motion for reinvestigation.c. ask for abatement of the assessment .d. protest the assessment.

9. A party adversely affected by a resolution of a division of a CTA en banc can file Petition for Review on Certiorari before the Supreme Court pursuant to (Admin)a. Rule 45 of the Rules of Civil Procedure b. Rule 42 of RCPc. Rule 43 of RCPd. Section 7 of R.A. 9282

10. In the case of Commissioner of Internal Revenue vs. Union Shipping Co., the final decision which was appealable to the Court of Tax Appeals was (Rem)a. when the warrant of distraint and levy was served on taxpayer.b. when a civil action for collection was filed by the BIR against the taxpayers. c. when there was inaction on the part of the BIR as to the protest filed by the taxpayers.d. when the BIR denied the protest filed by the taxpayers.

11. The lien of the Government for unpaid internal revenue taxes arises when (Rem)a. the service of warrant of distraint of personal property was made. b. the tax became due and payable.c. the assessment becomes final and unappealable.d. there is a disputed assessment.

12. The remission of taxes due and payable to the exclusion of taxes already collected constitute (Gen Prin)a. class legislationb. valid classificationc. violative of due process of lawd. uniform classification

13. Whenever exemption are expressly granted by organic or statute law, they are called (Gen. Prin)a. statutory exemptionb. express exemption c. total exemptiond. absolute exemption

14. Deductions for income tax purposes partake the nature of (Gen. Prin)

a. fringe benefitsb. tax privilegec. tax exemption d. tax incentives

15. The confidentiality rule of BIR tax returns does not apply to (Admin)a. when inspection is authorized by the Secretary of Finance b. when required by Congress in aid of legislation c. when required by the Ombudsman d. in the case of tax compromise

16. If a criminal case is filed against a taxpayer for tax evasion, the pendency of the criminal case (Rem)a. suspends the running of the prescriptive period for collection of tax.b. does not suspend the prescriptive period for collection. c. suspends the prescriptive period for the civil action only.d. merely interrupts the prescriptive period.

17. An estate tax is computed on the basis on the basis of the aggregate value of the properties left by the testator at time of death. On what category of tax does estate tax fall? (Gen. Prin)a. real property tax b. property taxc. transfer tax d. excise tax

18. During the Marcos regime, the Fiscal Incentives Review Board was established to recommend the restoration of tax exemption previously abolished under presidential decrees and headed by the Secretary of Finance, said move is (Gen. Prin)a. violative of due process of law.b. violative of non-impairment of contract. c. complies with due process of law .d. unauthorized delegation of the power to grant tax exemption.

19. Forfeited property by the Bureau of Internal Revenue under Section 225 of the Tax Reform Code of 1997 shall not be destroyed until at least (Rem)a. 15 days. b. 20 day. c. 30 days.d. 6 months after seizure.

20. Internal revenue officers assigned to perform assessment or collection functions shall not remain in the same assignment for more than (Tax Admin)a. two years.b. five years. c. three years.

d. four years.

1. Stockholders may be held liable for the unpaid taxes of a dissolved corporation if it appears that the corporate assets have passed into their hands. TRUE

2. The jurisdiction of the tax court include cases involving the collection of the so-called compromises penalties. TRUE

3. The Term “ Other Matters” within the Tax Court’s jurisdiction on cases coming from the BIR includes question of unfair competition in the use of the simplified bookkeeping records under the Tax Code. FALSE

4. Mandamus to compel the Commissioner of Internal revenue to assess will result in judicial encroachment on executive functions. TRUE

5. There is no reasonable basis for exempting foreign-sourced income of non-resident citizen as compared to resident citizen who have pay the ordinary graduated rates. FALSE

6. It is possible that constructive distraint may be applied even if an actual tax delinquency on the part of the taxpayers already exist. TRUE

7. Payment of the tax due after apprehension shall constitute a valid defense in any prosecution for violation af ay provision of the Tax Code. FALSE

8. An assessment wherein the tax assessor has no power to act at all is an erroneous assessment FALSE

9. Estoppel does not apply to deprive the Government of its right to raise defenses even if those defenses are being raised only for the first time on appeal.TRUE

10. Indirect duplicate taxation is also known as obnoxious taxation. FALSE

11. The running of the prescriptive period is not interrupted by a request for reconsideration if the request does not advance new grounds not previously alleged. TRUE

12. While the right to appeal a decision of the Commissioner if Internal Revenue to the tax court is merely a statutory remedy, nevertheless the requirement that it must be brought within thirty days is jurisdictional. TRUE

13. The equalization of assessments by a central body is not within the realm of legislative power and may therefore be delegated to administrative body. TRUE

14. In the “Tolentino E-VAT” case, it was upheld that the imposition of the VAT on sales and leases of real estate by virtue of contracts entered into to the affectivity of the VAT law violated the non-impairment of contracts rule in the Constitution. FALSE

15. A BIR Memorandum Circular partakes the nature of regulation within the contemplation of the Tax Code and therefore needs publication in order to be effective. FALSE

TAX 2

1. An increase in the value of property is considered (Gen. Prin)a. incomeb. assessed valuec. economic benefitd. unrealized increase in capital

2. For income tax purposes, an alien is considered a resident or non-resident depending on (Income Tax)a. documents issued by the Bureau of Immigration.b. having relatives in the Philippines. c. being a student in a Philippines university.d. intention as to the length and nature to stay.

3. A Memorandum of Agreement was entered into between Active Land Realty Inc. (ALRI) and Active Properties Inc. (API) providing for the construction of an office tower at Buendia Avenue across Reposo Street, Makati to be jointly owned by them on a 60%-40% basis to be leased out between the two corporations on the basis of their corresponding contribution. The arrangement is (Income Tax) a. an informal partnershipb. corporate entityc. tax-exempt joint venture d. taxable joint venture

4. Under the NIRC, the Minimum Corporate Income Tax (MCIT) is payable on a (Income Tax)a. monthly basisb. quarterly basisc. taxable year basis d. semi-annual basis

5. Dividends remitted to the head office of a resident foreign corporation by a domestic corporation are considered (Income Tax)a. branch profits subject to branch profits remittance taxb. dividends subject to 30% final withholding tax under the Tax Code or a tax treatyc. dividends subject to regular income taxd. tax exempt dividend

6. Compensation for damages for personal injuries represents payment for loss of expected profits is (Income)a. taxable income b. tax-exempt incomec. income enjoying preferential tax treatmentd. an exclusion

7. Under Section 25(B.2), dividends received by a non-resident alien not engaged in trade or business in the Philippines are subject to (Income)a. regular income tax of 32%b. final tax of 10%c. final tax of 25% d. final tax of 15%

8. The law which provides tax exempt retirement pay to qualified private employees in the absence of any retirement plan in the establishment isa. R.A. No. 4917b. P.D. No. 220c. R.A. No. 7641 d. R.A. No. 8424

9. The senior citizen’s discount being granted to qualified to senior citizens on their purchase of medicines is treated by the drug store as (income)a. tax credit. b. deductible costc. input VAT for VAT purposesd. exclusion

10. Under the Tax Code, securities becoming worthless is treated as (income)a. ordinary asset transactionb. capital asset transaction c. wash sale transactiond. equity loss

11. Amounts paid for an agreement not to compete in trade or business where the taxpayer can prove the existence of such an agreement are considered (Income)a. ordinary and necessary business expensesb. cost of goods soldc. disturbance compensationd. capital expenditure

12. The premium of payment for health and/or hospitalization insurance which is the only deduction allowed for compensation earners applies only to families which has a gross annual income of not more than (Income)a. P250,000 b. P200,000c. P300,000d. P350,000

13. Real and other properties owned or acquired (ROPOA) by a bank which were acquired through foreclosure of properties of delinquent client-borrowers are considered (Income)a. capital assetsb. ordinary assets

c. banks’ property and equipmentd. banks fixed assets for operation

14. Distribution of liquidating dividends in liquidation of corporations is (income)a. an ordinary asset transactionb. a capital asset transaction c. sale of business assetsd. exchange of business assets

15. A method developed by the BIR to examine a taxpayer’s income is such method wherein the equivalent of a ration analysis of percentages considered typical of the business under investigation is being used to indicate potential sources of revenue where revenue records do not exist. This method is called (Tax Admin)a. benchmark methodb. ratio analysis methodc. industry code methodd. percentage method

16. The property, rights, and obligation of a person which are not extinguished by his death and also those which have accrued thereto since the opening of the succession is called (Estate Tax)a. estate b. assets and liabilitiesc. net worthd. liabilities and equities

17. The amount of interest on foreign loans contracted on or after August 1, 1986 is subject to (Income)a. regular income taxb. 15% final withholding taxc. 20% final withholding tax d. 10% final withholding tax

18. The amount of royalties on books as well as other literary works and royalties on musical compositions shall be subject to (Income)a. regular income taxb. tax exemptc. final tax of 20%d. final tax of 10%

19. If a holder of a long-term deposit or investment certificate preterminates the same and

gets the proceeds thereon whereby the remaining maturity thereof is 3 years to less than 4 years, a final be imposed on the entire income at the rate of (Income)a. 5%b. 20%c. 12%

d. 10%

20. In case of charitable contribution of property other than money, the basis of the deduction for income tax purposes is (Income)a. fair market valueb. assessed valuec. acquisition cost d. book value

21. Capital gains from the sale of shares of stock not traded in the stock exchange for gains not over P100,000 shall be taxed at (Income)a. 10%b. 5% c. 20%d. 7.5%

22. The Branch Profits Remittance Tax of 15% remitted by a branch to its head office is based on the total profits (Income)a. booked in the branchb. profit remaining in the branchc. profit actually remitted by the branchd. profits applied or earmarked for remittance for repatriation

23. The need to gross up the monetary value of the fringe benefit received in computing the fringe benefit tax due thereon is because (rephrase) (Income)a. the tax is an additional benefit to the employee b. to comply with the Withholding on Wages Regulationsc. to consolidate the benefit with the salaryd. of the absence of the convenience of the employer rule

24. XPL Corporation owns 100% of YTJL Corporation. YTJL Corporation in turn owns Zeta Corporation. Zeta Corporation has NOLCO. Zeta Corporation is merged into YTJL Corporation. The NOLCO of Zeta Corporation should be (Income)a. retained and transferred YTJL Corporation .b. considered forfeited due to the merger .c. utilized by Zeta Corporation.d. allowed to transfer if there is a BIR ruling on the merger

25. When a corporation is subject to the Minimum Corporate Income Tax (MCIT) in any taxabe year during the three-year period for NOLCO utilization, the running of the three-year period for the NOLCO expiry is (Income)a. interrupted b. suspendedc. not interrupted d. extended

26. A Filipino citizen who works in Brunei from Monday to Friday and spends his weekends and a 6-week vacation leave in the Philippines is considered a (Income)a. resident Filipino citizenb. Filipino Overseas Contract Workerc. non-resident Filipino citizen d. Filipino tourist

27. A system where the tax treatment views indifferently the tax base and generally treats in common all categories of taxable income of the taxpayer is called (Gen Prin)a. unitary tax treatment b. global treatment c. absolute income taxation systemd. modified income tax system

28. Cash prizes won by local players/participants in golf tournaments are considered (Income)a. business incomeb. regular income c. passive incomed. compensation income

29. Income derived by the taxpayer from the distribution of the licensed computer systems to Philippine banks and the performance of support service is considered (Income)a. passive incomeb. ordinary business incomec. royalty income d. Vatable income

30. A non-resident owner of vessel or lessor on their gross rentals, lease or charter fees from leases or charterers to Filipino citizens as approved by the Maritime Industry Authority is subject to a tax of (income) a. 7 ½% b. 4 ½% c. 2 ½%d. 31/2%

1. A reverse repurchase agreement between the Bangko Sentral ng Pilipinas and any authorized agent bank is a deposit substitute. TRUE

2. The allocation of the condominium units and the issuance of the corresponding Condominium Certificate of Title by the register of Deeds to the co-venturers covering their participating interests are taxable events. FALSE

3. A deed of reconveyance with assumption of mortgage is subject to capital gains tax. TRUE

4. An expropriation sale is not subject to capital gains tax. FALSE

5. The capital gains tax paid in a foreclosure sale cannot be deducted from the capital gains tax on the sale of the property where the mortgagor failed to exercise his right of redemption. TRUE

6. In case of expropriation by the Government, the actual consideration may be used as basis in determining the capital gains tax. TRUE

7. A partner’s share in the net profits of a general professional partnership is considered compensation income. FALSE

8. The provision on branch profit remittance tax had been interpreted by the BIR to mean that the tax base upon which the tax shall be imposed is the profit actually remitted abroad. FALSE

9. Under section 29, if the CIR determines that a corporation was formed for the purpose of avoiding the progressive rates of tax on individuals, the burden of proving the determination wrong is on the Commissioner. FALSE

10. For purposes of FBT, in case the employee is a resident alien, the gross monetary value is determined by dividing its actual monetary value by percentage factor of 67% effective year 2000. FALSE

11. Capital expenditures are not considered ordinary and necessary expenses. TRUE12. The electric energy consumption tax is a non-deductible expense. FALSE13. Shrinkage in value of securities is a deductible expense from gross income. FALSE14. Capital losses are allowed to be deducted from other income of the taxpayer. FALSE15. Under section 40 of the tax code, in case of property acquired for less than an adequate

consideration , the basis is the amount paid by the transferee for the property. TRUE16. For purposes of the imposition of the 6% capital gains tax under section 24(d) of the tax

code, the properties exchanged need not be essentially different from each other. TRUE17. Under the substituted filing rule, “substituted filing” is the same as “non-filing”. FALSE18. Interest payments for loans and other borrowings are subject to expanded withholding

tax. FALSE19. The duty to withhold tax is similar to the duty to pay income tax. FALSE20. Property dividends are subject to capital gains tax. FALSE

TAX 1

1. The official action of an examiner of the Bureau of Internal Revenue in determining the correctness of the tax due from a taxpayer is referred to as: (Tax Admin)a. Tax Examinationb. Tax Audit c. Tax Assessment d. Tax Mapping

2. When a taxpayer takes the initiative of preparing and filing his tax return with the Bureau of Internal Revenue, the same is referred to as: (Tax Admin)a. Tax compliance b. Tax initiative c. Internal assessmentd. Self assessment

3. If after a tax investigation, the BIR examiner found out that the tax paid by the taxpayer upon filing his tax return is short of what should have been paid under the law, the tax payer is liable for: (Tax Admin)a. Tax avoidance b. Tax evasion c. Deficiency assessment d. Delinquency assessment

4. When the BIR examiner issued an assessment which was not backed up by the full audit and only for the purpose of beating the prescriptive period, the assessment is called: (Tax Admin)a. Void assessment b. Illegal assessment c. Erroneous assessment d. Jeopardy assessment

5. When a tax assessment issued by the Bureau of Internal Revenue is administratively protested within thirty (30) days from the receipt of the assessment, the assessment is called: (Tax Admin)a. Administrative assessment b. Preliminary assessment c. Disputed assessment d. Final assessment

6. The rule of “No Estoppel Against the Government“ means that: (Tax Admin)a. the government is always presumed correct in performing its tax assessment

functions;b. the taxpayer failed to rebut the tax findings of the government uncovered during tax

examination c. the government is not liable for the neglect of its agents and officers

d. the government cannot be hampered in doing its tax collection duties.

7. The power of the commissioner of Internal Revenue to obtain information from third parties in determining the tax liability of a taxpayer covers information coming from: (Tax Admin)a. Other government offices b. Informers c. Tax returns filed by the taxpayer d. All persons both government and private

8. A material factor in resolving questions of prescription in the assessment of taxes is: (Tax Admin)a. Complete submission of all the attachments to the tax returns ;b. Filing of the tax return in the right venue c. Having the tax return stamped received by the BIR authorized receiving officer d. The date of the filing of the tax return.

9. An income tax return for taxable year 2009 was filed on January 15, 2010. The prescriptive period for assessment is: (Tax Admin)a. January 15, 2013 b. December 31, 2012c. April 25, 2013d. April 15, 2015

10. Forfeiture of property of a delinquent taxpayer is done by the Bureau of Internal Revenue when: (Tax Admin)a. Taxpayer did not file a protest against the tax assessment b. Taxpayer does not attend an informal conference arranged by the BIRc. Taxpayer retires from business or about to leave the Philippines d. In a public auction of the property of a delinquent taxpayer, no bidders bid for the

property

11. A tax evasion case discovered by the BIR examiner should be filed by the latter with: (Tax Admin)a. Fiscal’s Officeb. Court of Tax Appealsc. Department of Justice d. Office of the BIR Commissioner

12. If a tax or any portion thereof is unjustly assessed, the recourse of the taxpayer is: (Rem)a. To initiate an offer of compromise of the tax with the Commissioner of Internal

Revenue;b. The file a case against the BIR examiner in the Ombudsman c. To file a damage suit in the ordinary courts d. To request the Commissioner of Internal Revenue to abate the tax liability

13. A compromise for the payment of an Internal Revenue tax is: (Tax Admin)a. A unilateral act of the Commissioner of Internal Revenueb. An exclusive right of the taxpayerc. A mutual agreement between the Commissioner and the taxpayer d. A right mandated by the Tax Code

14. The minimum rate for the compromise settlement of a tax liability where the taxpayer is financially incapable is: (Tax Admin)a. 10% b. 40%c. 25%d. 5%

15. The prescriptive period for the collection of a previously assessed Internal Revenue tax is: (Tax Admin)a. Five (5) years fallowing the assessment of the tax b. Three (3) years following the filing of the tax return c. Five (5) years following the filing of the tax return d. Ten (10) years following the assessment of the tax

16. A request for reinvestigation by the taxpayer which is granted by the Commissioner has the following effect: (Tax Admin)a. Suspends the prescriptive period for assessment b. Puts an end to an assessment c. Prescriptive period for the assessment is not affected and continues to run d. Renders the assessment final executor

17. The prescriptive period for the filing of a claim for refund or tax credit of erroneously paid internal revenue tax is: (Tax Admin)a. Two (2) years from date of payment, regardless of any supervening event b. Six (6) years from date of paymentc. Two (2) years from date of payment but if there is a supervising event, two years

from the date of the supervising event.d. Three (3) years from the date of payment

18. The broad spectrum of taxation includes the rule that the collection of taxes could not be stopped by the courts pursuant to the following rule: (Tax Admin)a. Lifeblood Theory in Taxationb. Tax exemption policyc. No-Injunction rule d. Theory of Necessity

19. One of the canons of taxation is fiscal adequacy. A violation of this canon would fall under the following: (Gen Prin)a. The constitutional provision that all revenue bills should originate from the House of

Senate may concur with amendments

b. Dereliction of duties on the part of the Bureau of Internal Revenue c. No breach of any constitutional provision d. The Lateral Attrition Law

20. Whenever a violation of the Tax Reform Code of 1997 is committed by a taxpayer, an internal revenue officer can make an arrest. The legal basis for this is the: (Tax Admin)a. Revised Penal Codeb. Tax Code c. Rules of Courtd. Ombudsman Act

21. A property may be placed under constructive distraint by the Bureau of Internal Revenue when: (Tax Admin)a. The taxpayer becomes delinquent in the payment of internal revenue tax b. The taxpayer fails to file a protest against tax assessmentc. The taxpayer may not yet be delinquent d. The taxpayer fails to appeal to the Court of Tax Appeals

22. A taxpayer overpaid his income tax when he filed his income tax return on April 15, 2007. Realizing the overpayment, he filed a claim for refund with the BIR on June 15, 2007. He received the reply of the BIR denying his claim on May 3, 2009. What should he do with the adverse decision of the BIR? (Remedies)a. File a Motion for Reconsideration with the BIRb. Elevate the case to the Court of Tax Appeals within 30 days from May 3, 2009 given

the 30 days deadline to appeal adverse decision pursuant to RA 9282c. He has lost his right to appeal d. File an auction with the ordinary courts for undue payment (solutio indebiti)

23. Before a case for tax evasion against a client under the Tax Code is filed, the same must be approved by the: (Tax Admin)a. Solicitor General’s Officeb. Secretary of Financec. Commissioner of Internal Revenue d. Department of Justice

24. In case of doubt in a tax exemption law, which of the following rules shall govern? (Gen Prin)a. The doubt must be resolved in favor of the taxpayer since a tax is a deprivation of

hard-earned money of the taxpayer.b. No person shall be deprived of due process of law which is guaranteed by the

Constitution. c. The doubt must be resolved in favor of the government .d. The legislative intention must be determined first.

25. A taxpayer filed his income tax return on April 15, 2008. He received a Notice of Assessment on January 15, 2009 and shortly thereafter the BIR examiner started his

investigation of the return. Upon Receipt of the preliminary report of the result of the tax examination, taxpayer requested for investigation which was granted by the BIR on June 15, 2009 and reinvestigation was finished on December 15, 2009. The final assessment was only issued to the taxpayer on June 15, 2011 for which the taxpayer argued that assessment has prescribed since under the 3 years-prescriptive rule under Section 203 of the Tax Code, the final assessment should have been issue on or before April 15, 2011. The issue is: (Tax Admin)a. The assessment has already prescribed under section 203 of the Tax Code b. The assessment has prescribed because the BIR did not take the initiative of

requesting the taxpayer to file the Waiver of the Prescriptive Period c. The assessment has not yet prescribed because it falls within the grounds under

section 223 of the Tax Coded. The assessment has prescribed because the BIR did not offer to compromise the

assessment with the taxpayer.

TAX 1

1. The authority of the Commissioner of Internal Revenue to prescribed real property values is intended for the following purpose: (tax Admin)a. Assure collection of the correct real property taxes due from property owners b. To have uniform and standard valuation of real properties and assure transparency in

business transactionsc. Prevent undervaluation of real property values for tax purposes d. Avoid arbitrariness in the valuation of real properties.

2. The termination of a taxable period of a taxpayer is intended for the following purpose: (tax Admin)a. To address the internal accounting needs of the BIRb. The taxpayer is retiring from business or intending to leave the Philippines c. The taxpayer has requested the BIR for such move d. The business of the taxpayer necessitates such move

3. The powers vested on the Commissioner may be delegated to the following: (tax Admin)a. Division chief or higher b. Task Force of the Commissionerc. Commissioner’s confidential advisers d. External consultants

4. Whenever the Commissioner joins inventory–taking and surveillance job of taxpayers under Section 6 ( c ) of the Tax Code, he would need authority from: (tax Admin)a. Ordinary courts b. Court of Tax Appealsc. Secretary of Finance d. No need to get any authority

5. When a warrant of Garnishment is issued by the Commissioner of internal Revenue to garnish a taxpayer’s money in the custody of a bank, the same is a violative of: (tax Admin)a. Republic Act 1405 ( Secrecy of Bank Deposits)b. General Banking Laws of 2000c. Confidentiality of Banking Transactionsd. Not violative of the laws cited above

6. Laws and regulations issued by the government concerning collection of taxes are required to be published in newspapers of general circulation. Failure to do so violates: (Gen Prin)a. Inherent limitations on taxations b. Canons of taxations c. Private rights of taxpayerd. Theoretical justice

7. It has been said that in taxation, there is symbiotic relationship between the taxpayer and the government. The doctrine falls under: (Gen Prin)a. Basis of Taxation b. Aspects of Taxationc. The Court of Tax Appeals d. The Evaluation Board

8. In case of a compromise of a civil liability for taxes where the basic tax exceeds One Million Pesos or where the settlement offered is less than the minimum rate of 40% the compromise shall be approved by the : (tax Admin)a. Secretary of Financeb. Commissioner of Internal Revenuec. Court of Tax Appealsd. Evaluation Board

9. A refund check or warrant issued by the BIR in accordance with Section 204 of the Tax Code are claimable within the period of: (tax Admin)a. Two yearsb. Ten yearsc. Five years d. Three years

10. When the power of the Commissioner to compromise a tax case is delegated under Section 7 of the Tax Code on cases involving basic deficiency tax of P500,000 or less, the same may be delegated to the: (tax Admin)a. Regional Directorb. Assistant Regional Directorc. Revenue District Officerd. Regional Evaluation board

11. The Secrecy of Bank Deposits under Republic Act No. 1405 is automatically waived by operation of law examination of the following taxes: (tax Admin)a. Income Taxb. Value Added Taxc. Estate Tax d. Donor’s Tax

12. The Net Worth Method of investigation being utilized by the BIR in assessing taxpayers is based on the following: (Tax Admin)a. When a person is benefit economically in life, his net worth will increaseb. When the capital account of a person increases, there is presumed income c. All persons who have assets are presumed to have incomed. All persons who have source of income should have taxable income

13. One of the canons of taxation is theoretical justice. A violation of this canon is based on: (Gen Prin)

a. The rule of uniformity and equal protection of law in taxation.b. Theory of necessityc. Basis of taxation which is reciprocity d. Guarantee of due process of law

14. Acquittal in a criminal case for tax evasion does not carry with it the exoneration from civil obligation to pay tax is in the Tax Code (tax Admin)a. A criminal case is governed by the Revised Penal code while the civil obligation to

pay tax in the Tax Codeb. A different quantum of evidence is required in a criminal case vis-à-vis a civil

obligation to pay taxc. A criminal violation is sanctioned by fines and imprisonment whereas the civil

obligation is exposed only to the incremental penalties for deficiency and delinquencyd. There are two separate and distinct offenses involved.

15. Which of the following situations do not require a pre-assessment under the Tax Code? (tax Admin)a. When the taxpayer being examined request for the reinvestigation of his recordsb. When the taxpayer executes a waiver of the prescriptive periodc. When the excise tax due on excisable articles has not been paid d. When the taxpayer retires from business or leave the Philippines.

16. When the issue in controversy between the taxpayers and the Commissioner does not involve a difficult question of law or doubtful validity, the options opened to the Commissioner are as follows: (tax Admin)a. Accept the compromise offer from the taxpayer who invokes Commissioner’s right

under Section 204 of the Tax Code b. Commissioner should pursue collection of the tax c. Suggest that the taxpayer appeal the case to the Court of Tax Appealsd. Suggest that taxpayer hire a tax lawyer to assist him

17. An estate tax return was filed by the administrator of an estate on June 1, 2006. The estate tax return was examined by the BIR and after undertaking all the procedural steps for tax examination, a final assessment was issued on August 5, 2010. It was discovered later by the BIR that the estate tax return which filed was incomplete since a big real property of the testator was not reported in the estate tax return. The taxpayer argued that since the final assessment was only issued on August 5, 2010, the assessment is already prescribed being issued beyond the 3 years period for tax examination. Choose from the following the applicable jurisprudence in the case: (tax Admin)a. The assessment had already prescribed because the assessment was only received on

August 5, 2010 which beyond the prescriptive period of 3 years;b. The assessment had already prescribed in as much as there was nothing done by the

tax payer to suspend the prescriptive period like the filing of a Motion for Reinvestigation

c. The assessment had not yet prescribed because the return being incomplete the 3 years prescriptive period does not apply

d. The assessment had already prescribed because the BIR did not request the taxpayer to execute a Waiver of Prescriptive period

18. A taxpayer filed his income tax return on April 15, 2006. Sometime March 1. 2007, he discovered that he omitted a big income which should have been reported in the return filed on April 15, 2006. Hence, on March 2, 2007, he filed an amendment to his income tax return. The perspective period for assessment of the tax return shall expire on: (tax Admin)a. April 15, 2009 b. March 2, 2010c. March 1, 2010d. April 15, 2016

19. The “presumption of correctness” being enjoyed by the government in case of tax assessment cases means: (tax Admin)a. The government is not stopped from the mistakes of its agentsb. This is in conformity with the supremacy of the government in the collection of taxesc. The taxpayer has the burden of proof in arguing his case and prove that he is correct d. This is in line with the lifeblood theory in taxation

20. The 25% / 50% surcharge being imposed on a deficiency or delinquency assessment initiated by the BIR is based on the following rationale: (tax Admin)a. It is a way of compensating the government for lost revenue. b. It partakes the nature of liquidated damages which the government sufferedc. It is a form of exemplary damages to deter taxpayer from violating the Tax Coded. It is another form of raising revenue for the government

21. In tax evasion cases, it is a rule that a precise determination of civil liability for tax is not a condition precedent for the filing of a criminal case. The rationale for this is: (tax Admin)a. The civil and criminal liabilities are separate and distinct liabilitiesb. The civil liability is given preference over the criminal liability due to the lifeblood

theoryc. The quantum of evidence required in the criminal case is not the same as the one for

the civil cased. It takes time to determine the civil liability for tax of a taxpayer.

22. The Statute of Limitations in taxation (prescriptive rules) are being observed because of the following rationale: (tax Admin)a. To align it with others laws where there are also rues on prescriptionb. The tax laws of the United States from which the Philippine Tax Code was patterned

have rules governing prescriptionc. To make the government vigilant in complying with their duties of tax examination

and to give peace of mind to taxpayersd. Many of the tax laws of other countries in world have rules on prescription

23. The Warrant of distraint and levy being issued by the BIR to enforce collection of taxes can only be initiated b y the BIR under the following conditionsa. To align it with other laws where there also rules on prescriptionb. The tax laws of the united states from which the Philippine tax code was patterned

have rules governing prescriptionc. To make the government vigilant in complying with their duties of tax examination

and to give peace of mind to taxpayersd. Many of the tax laws of other countries in the world have rules on prescription.

24. Upon examination of an income tax return by a BIR examiner, the taxpayer requested for information on the items which had been disallowed by the BIR examiner which was granted by the latter. The effect of giving due course to taxpayer’s request is: (tax Admin)a. to suspend the running of the prescriptive period b. the prescriptive period shall continue to runc. the assessment will be suspendedd. there is no effect on the prescriptive period

25. One of the basic principles of a sound tax system is administrative convenience. If this is not complied with, the following rule is violated: (gen Prin)a. Doctrine of Exhaustion of Administrative Remediesb. Due process of law c. No violation committedd. Equal protection law