REVIEWER: INCOME TAXATION 26.

In the exercise of taxation, the state can tax

anything at any time and any amount
TRUE OR FALSE 27. Taxation and power of eminent domain
may be exercised simultaneously
1. A person may refuse to pay a tax on the
28. Taxation and police power may be
ground that he receives no personal benefit
exercised simultaneously
from it
29. All of our tax laws are statutory law on
2. A taxpayer has a right to question illegal
taxation
expenditures of public funds
30. The non-impairment clause is statutory law
3. One of the essential characteristics of a tax
on taxation
is it unlimited in amount
31. Non-payment of tax makes the business
4. A tax is generally unlimited because it is
illegal
based on the needs of the state
32. The non-payment of license fee makes the
5. A license fee is charged imposed under the
business illegal
police power of the state
33. Margin fee is a tax
6. Penalty is imposed by the state only
34. Custom’s duty is a tax
7. Imposition of taxes is a legislative act
35. Territoriality is one of the Constitutional
8. Collection of taxes is an administrative act
limitations on the power of taxation
9. A state has the power to tax even if not
36. International comity is an inherent
granted by the Constitution
limitation in taxation
10. A state cannot exercise police power if not
37. Taxes may be used for sectarian purposes is
granted by the Constitution
allowed by an ordinance
11. There can only be tax if there is a law
38. The President can refuse to implement tax
imposing the tax
law if it appears to be unconstitutional
12. The power to tax is inherent
39. There can be double taxation in Philippines
13. A tax is based on law while debt is based on
40. Double taxation is illegal if it violates the
contract
uniformity of taxation
14. A tax is also a custom duty
41. Revenue Regional Director is allowed or
15. A person cannot be imprisoned for non-
authorized to issue Letter of Authority
payment of property tax
42. Revenue Officers have no authority to
16. A law may be passed violating uniformity
administer oaths and take testimony in any
to taxation
official matter or investigation conducted
17. The RDO is known as the alter ego of the
by them regarding any matters within the
BIR Commissioner
jurisdiction of the Bureau.
18. The BIR Commissioner is directly under the
43. Revenue Officers have no authority to make
President’ office
arrest or seizures for the violation of the
19. Provision in the Philippines Constitution
penal law, rule or regulation administered
on taxation are grants of power
by the BIR
20. Due process of law in taxation in the
44. Internal Revenue officers assigned to
Constitution is a grant power
perform assessment or collection functions
21. An excise tax is also called a privilege tax
shall not remain in the same assignment for
22. A tax which is neither personal tax nor
more than (2) years.
property is an excise tax
23. Estate tax is proportional tax
24. A Progressive tax is a tax, the rate of which
is directly proportional to tax base
25. Taxation without representation is not
tyranny
 MULTIPLE CHOICE 8. Levied only on hands:
1. All of the following is territoriality principle  Tax
doctrine except one:  Special Assessment
 Residence of the taxpayer  Toll
 Source of the income  License Fee
 Situs of the thing or property taxed 9. One of the following is not a source of tax
 International Organizations  Administrative rulings and
2. Taxation is equitable in all of the following, opinions
except:  Judicial decisions
 Its burden falls on those better to  1987 Constitution
pay
 Exert opinion on taxation
 It is based on ability 10. The government may not do all except one:
 It is based on benefits received  Tax itself
 It is based on uniformity rule.  Delegate its power to tax to private
3. The only tax where non-payment of which entities
will not result to imprisonment
 Imposed tax arbitrarily
 Excise tax
 Disregard uniformity in taxation
 Donor’s tax 11. A form of tax escape through which one is
 Personal tax given tax immunity wherein others are
 Property tax subjected to tax.
4. One of the following is not a major tax  Shifting
under the Tax Code:  Tax immunity
 Income tax  Tax exemption
 Donor’s tax  Tax avoidance
 Excise tax 12. A form of tax escape by a manufacture or
 Estate tax producer who improves his proceeds of
5. One of the following can be both be as production thereby minimizing his unit
progressive tax and a proportional tax: production cost.
 Donor’s tax  Tax avoidance
 Income tax on individuals  Capitulation
 Both a and b  Transformation
 Estate tax  Shifting
6. A tax which is both under taxation and 13. A waiver by the government right to collect
police power: tax:
 Compensatory tax  Tax exemption
 Regulatory tax  Tax amnesty
 National tax  Tax avoidance
 General tax  Tax evasion
7. A Demand on proprietorship 14. A tax imposed based on the number
 Tax  Income tax
 Special Assessment  Specific tax
 Toll  Ad valorem tax
 License fee  Custom duties
15. The theory which most justifies the
necessity of taxation:
 Protection and benefits theory
 Revenue purposes theory
 Lifeblood theory
 Ability to pay theory
16. One of the characteristics of internal
revenue laws is that they are:
 Criminal in nature
 Penal in nature
 Political nature
 Generally prospective in
application
17. Which of the following is not an example
of excise tax?
 Transfer tax
 Sales tax
 Real property tax
 Income tax
18. Taxation is an inherent power because:
 It is the life blood of the
government
 Protection and benefit theory
 It co-exist with the existence of the
state
 It is exercised for the general
welfare of the people
19. A tax is invalid, except:
 Theory of taxation and its purpose
are disregard
 Basis of taxation is not recognized
 Inherent and constitutional
limitations are not observed
 It results to double taxation
20. The following are similarities of the
inherent powers of the state, except one:
 Are necessary attributes of
sovereignty
 Interfere with private rights and
property
 Superior to the non-impairment
claims
 Are legislative in character
1. Which of the following powers and duties
of Bureau of international revenue(BIR) is
false?
 Assessment and collection of all
national internal revenue taxes,
fees, and charges
 Enforcement of all forfeitures,
penalties, and fines connected
with assessment and collection of
taxes.
 Execute judgments in all cases
decided by court of tax appeals
and ordinary courts.
 Give effect to and administer the
supervisory and eminent domain
power conferred by the Tax code
or other laws
2. The organization of BIR comprise of:
 One commissioner and 4 deputy
Commissioner
 One commissioner and 6 deputy
commissioner
 One commissioner and 5 deputy
commissioner
 One commissioner and 3 deputy
commissioner
3. Which of the following statement is true?
 The commissioner has the power
to interpret tax laws subject to
review of the President of the
Philippines
 The commissioner has the power
to decide disputed assessment,
refunds of internal revenue, taxes,
fees or charge, penalties imposed
in relation thereto, or other tax
matters, subject to exclusive
appellate jurisdiction of Regional
Trial courts.
 The commissioner has the power
to decide disputed assessment,
refunds of internal revenue taxes,
fees or charge, penalties imposed
in relation thereto, or other tax
matters, subject to exclusive
appellate jurisdiction of Court of
Tax Appeals.
  The commissioner has the power
to interpret tax laws about not to
decide on tax cases.
4. Any return, statement or declaration filed
in any office authorize to receive the same
shall not be withdrawn: Provided that ___
from the date of such filling, the same
shall be modified, changed, or amended,
provided further that no notice of audit or
investigation of such return, statement or
declaration has, in the meantime, been
actually served upon the tax payers
 Within 2 years
 Within 5 years
 Within 3 years
 Within 4 years
5. What evidence is needed for the
commissioner to assess the tax liability of
the tax payers in case the latter failed to
submit the required returns, statements,
reports and other documents or when
there is a reason to believe that such
report is false, incomplete or erroneous?
 Best evidence obtainable
 Probable evidence obtainable
 Reliable evidence obtainable
 Virtual evidence obtainable
6. Jeopardy assessment (termination of
taxable period) is necessary under the
following circumstances:
 The taxpayers is retiring from
business subject to tax
 The tax payers is intending to
leave the Philippines, or removing
his property therefrom
 The taxpayers is hiding or
concealing his property
 All of the above
7. For purposes of computing internal
revenue tax, the real property must be
valued.
 Fair market value as determined
by the Commissioner
 Fair market value as determined
by the Provincial or City Assessors
Office
 Fair market value under letter a or
letter be which is higher
 Fair market value under letter a or
letter b which is lower
8. The commissioners have the authority to
prescribe real property value subject to
limitations set by the law. Which of the
following limitations is invalid?
 There must be consultation with
competent appraisers both from
private and public sectors, with
prior notice affected taxpayers
 The adjustment in the FVM of the
property must be done once in
every three years through the
rules and regulations issued by the
Secretary of Finance based on the
current Philippine standards.
 The adjustment shall be published
in newspapers of general
circulation in the province, city or
municipality concerned.
 In the absence of provision stated
under letter C, the adjustments
must be posted in the provincial
capitol, city or municipal hall in
three (3) constitution public
places therein.
9. The commissioner can inquire into
taxpayers’ bank accounts without
violating the Bank Secrecy Law and
Foreign Currency Deposits Act under
which of the following reason/s:
 To determine the gross estate of
the decedent
 To determine the financial
incapability to the taxpayer, but a
prior approval to the taxpayer is
needed.
 Foreign tax authority requested for
such information
 All of the Above
10. Which of the following statement is False?
 One who has applied accreditation
and denied by the Commissioners,
he may appeal such denial to the
Secretary of finance, who shall
 rule on the appeal within What are the Sources of National Internal
sixty(60) days from the receipt of Revenue tax?
such appeal. Failure of the
secretary to rule on the appeal  Income taxation
within the prescribe period shall  Excise taxation
be deemed as approval of the  Transfer Taxation
application for accreditation of the  VAT
appellant.
 Doc Stamp
 The commissioner may prescribe
 Other percentage taxation
the manner of compliance with
any documentary or procedural  Others
requirement in connection with
the submission or preparation of
financial statement accompanying
tax returns.
 The commissioners shall delegate
his powers to his subordinate with
the rank equivalent to division
chief or higher, subject to
limitations and restrictions
 None of the Above
11. The following powers of the
Commissioners shall not be delegated
except:
 The power to recommend the
promulgations of rules and
regulations by the Secretary of
Finance
 The power to issue rulings of first
impression or to reverse, revoke,
or modify any existing ruling of
the Bureau.
 The power to assign or reassign
internal revenue officers to
establishment where articles
subject to excise tax produced or
kept.
 The power to compromise or abate
deficiency tax amounting to P
500,000 or less, and minor
criminal violations