Question

1.A taxpayer may legally avoid paying federal income tax by:

receiving income in kind, not in cash.

working for a non-profit organization.

collecting income only from non-labor sources (stock dividends, bank interest, etc.)

None of the above

2.Mr. Smith faces a federal marginal tax rate of 28 percent. His adjusted gross income in 1992 was $37,500. Which of the following statements is most likely to be correct, based on the information you have here?

Mr. Smith paid $10,500 federal income tax for 1991

Mr. Smith paid tax of an amount that cannot be computed from the data provided, but it must have been less than $10,500.

Mr. Smith paid an effective tax rate of 28 percent.

None of the above.

3.Under the current federal individual income tax law, which of the following would be an exclusion?

Wages paid by a non-profit organization, like the Red Cross.

Interest paid on a bond issued by a state government before 1986.

The value of an old car you received in exchange for painting a house.

All the above are exclusions.

4.The individual income tax became a permanent feature (at least so far) of the federal tax structure in:

1789, with the new Constitution.

1861, with the Civil War.

1913, just before WWI.

1940, just before U.S. participation in WWII.

5.The federal government may levy an individual income tax without the need to apportion among states because:

the U.S. Supreme Court has ruled that the individual income tax is not a direct tax.

individual income taxes are subject only to the requirement that they be uniform across states.

the sixteenth amendment allows such taxes without apportionment.

None of the above.

Answer 1

Ans-1- The correct option is d- None of the above

2- The correct option is-a-Mr. Smith paid $10,500 federal income tax for 1991

3- The correct option is-d-

All the above are exclusions

4- The correct option is -c. 1913, just before WWI.

5-The correct option is -c-the sixteenth amendment allows such taxes without apportionment.