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INTEGRATED REVIEW 4: TAXATION

#2 | Principle of Taxation Part 2

1. The following are the powers of the BIR, except:


A. The assessment and collection of all internal revenue taxes.
B. The execution of all judgments in all cases decided in its favor by the CTA and
the ordinary courts.
C. The enforcement of all forfeitures, penalties and fines connected with national
internal revenue taxes
D. The assessment and collection of some customs duties
(De Vera, 2017)

2. What are the means employed in the assessment of taxes, EXCEPT?


A. Examination of tax returns
B. Inventory taking surveillance and use of presumptions gross sales or receipts
C. Prescription of real property values
D. Examination of bank deposits
(De Vera, 2017)

3. 1st Statement: The Commissioner, the Deputy Commissioners, the Revenue Regional
Directors, the Revenue District Officers and other internal revenue officers shall have
authority to make arrest and seizures for the violation of any penal law, rule or regulation
administered by the Bureau of Internal Revenue pursuant to the Tax Code.

2nd Statement: An internal revenue officer assigned to establishments where articles


subject to excise tax are produced or kept shall in no case stay in his assignment for more
than two (2) years.
A. True, False
B. True, True
C. False, True
D. False, False
(De Vera, 2017)

4. Tax as distinguished from special assessment:


A. not a personal liability of the person assessed
B. based wholly on benefits
C. exceptional as to time and place
D. based on necessity and the purpose is to raise revenues
(CPAR Reviewer, 2018)
5. What is required to make a BIR ruling of first impression a valid one, except?
A. Must be reasonable within the authority conferred.
B. Must be germane to the purpose of the law
C. Must be published
D. Must be prospective in application
(De Vera, 2017)

6. Which of the following may not raise money for the government?
A. Power of taxation
B. Police Power
C. Power of eminent domain
D. License Fees
(CPAR Reviewer, 2018)

7. Which of the following is not acceptable for legally refusing to pay the tax?
A. That the right of the state to collect the tax has prescribed
B. That there is no jurisdiction to collect the tax
C. That the tax law was declared as unconstitutional
D. That there is no benefit derived from the tax
(CPAR Reviewer, 2018)

8. Tax as distinguished from debt


A. No imprisonment for non-payment
B. may be paid in kind
C. Based on contract
D. Based on law
(CPAR Reviewer, 2018)

9. No person shall be imprisoned for debt or nonpayment of poll tax. This is a (an)
A. Inherent limitation
B. Constitutional limitation
C. International limitation
D. Territorial limitation
(CPAR Reviewer, 2018)
10. The Department of Finance thru its officers entered into a contract with foreign investors,
granting them exemption from all forms of taxes to encourage investments in the
Philippines. The contract is
A. Void, unless the President ratifies
B. Void, because the power to grant tax exemption is vested in Congress
C. Valid, if the President has authorized the officers to enter into such contract
D. Valid, because the purpose is to promote public welfare
(CPAR Reviewer, 2018)
11. -20. ALMODOVAR

21. Tax rulings are issued by the


A. Secretary of Fiance
B. Supreme Court
C. Court of Tax Appeals
D. Commissioner of Internal Revenue
(Banggawan, 2017)

22. The commissioner of Internal Revenue is not authorized to


A. Interpret the provisions of the national Internal revenue Code
B. Promulgate Revenue Regulations
C. Terminate an accounting period
D. Prescribe presumptive gross receipts
(Banggawan, 2017)

23. Which is not a power of the Commissioner of Internal Revenue?


A. To change tax periods of taxpayers
B. To refund internal revenue taxes
C. To prescribe assessed value of real properties
D. To inquire into bank deposits only under certain areas
(Banggawan, 2017)

24. Which of the following best describes the effect of tax condonation?
A. It only covers the unpaid balance of a tax liability
B. It is conditional on the taxpayer paying some portion of the unpaid tax
C. It generally applies to all taxpayers
D. All of these
(Banggawan, 2017)

25. By which principle of a sound tax system is the elasticity in tax rates justified?
A. Theoretical justice
B. Fiscal adequacy
C. Administrative feasibility
D. All of these
(Banggawan, 2017)

26. Which is true with tax amnesty?


A. It is unconditional
B. It covers both criminal and civil liability of the taxpayer
C. It applies for past and future non-compliance
D. All of these
(Banggawan, 2017)

27. The Commissioner of Internal Revenue is not empowered to


A. Make or amend a tax return for and in behalf of the taxpayer
B. Obtain information and to summon, examine, and take testimony of persons to
effect tax collections
C. Compromise tax liabilities of taxpayers
D. Grant amnesty for erring taxpayers
(Banggawan, 2017)

28. Which among the following powers of the Commissioner of Internal revenue can be
delegated?
A. To power to conduct inventory surveillance
B. The power to recommend promulgation of revenue obligations
C. The power to issue rulings of first impression
D. The power to reverse a ruling, amend or modify an existing ruling
(Banggawan, 2017)

29. Violation of this principle will make a tax law invalid


A. Fiscal adequacy
B. Theoretical justice
C. Administrative feasibility
D. Economic consistency
(Banggawan, 2017)

30. Which principle demands that tax should be just, reasonable, and fair?
A. Theoretical justice
B. Fiscal adequacy
C. Administrative feasibility
D. Economic consistency
(Banggawan, 2017)

31. A form of tax escape by a manufacturer or producer who improves his proceeds of
production thereby minimizing his unit production cost:
A. Tax Avoidance
B. Capitalization
C. Transformation
D. Shifting
(De Vera, 2016)

32. What kind of taxes, fees and charges are considered as National Internal Revenue Taxes
under the National Internal Revenue Code?
I. Income Taxes
II. Estate Taxes
III. Donor’s Taxes
IV. Value Added Taxes
V. Other Percentage Taxes
VI. Excise Taxes
VII. Documentary Stamp Taxes
VIII. Community Taxes or Poll Taxes
IX. Real Property Taxes

A. I, II, III, IV, V, VI


B. I, II, III, IV, V, VI, VII
C. I, II, III, IV, V, VI, VII, VIII
D. I, II, III, IV, V, VI, VII, VIII, IX
(De Vera, 2016)

33. I. In every case of doubt, tax statutes are construed strictly against the government and
liberally in favor of the taxpayer.

II. Where the intent to tax is clear and the taxpayer claims that he is exempt from the tax
obligation, the tax shall be construed against the taxpayer and in favor of the government
because the power of taxation is necessary to the existence of such government.
A. True, False
B. True, True
C. False, True
D. False, False
(De Vera, 2016)

34. Which of the following is not considered as one of the characteristics of special
assessments?
A. It is based solely on the benefit derived by the owners of the land
B. It is levied only on land
C. It is based on the government’s need of money to support its legitimate objectives
D. It is not personal liability of the person assessed
(De Vera, 2016)

35. This rule is not applicable on the construction of tax laws


A. If the law is repealed, taxes assessed before repeal of the law may no longer be
collected
B. If the intent of the tax is not clear as to whether the taxpayer is covered by the tax
obligation, the law shall be construed against the government
C. Where the intent to tax is clear and taxpayer claims he is exempt from the tax
obligation, the tax shall be construed against the taxpayer
D. Provisions intended for the security of the taxpayer or to insure equality or
uniformity of taxation are mandatory
(De Vera, 2016)

36. Which of the following is not an element of double taxation?


A. Two taxes
B. Same subject matter
C. Same Year
D. Same Amount
(De Vera, 2016)

37. The following reasons maybe given by taxpayer in refusing to pay his tax liability.
Which is not acceptable for legally refusing to pay the tax?
A. That he has been deprived of due process of law
B. That there is lack of territorial jurisdiction
C. That the prescription period for the collection of tax has lapsed
D. That he will derived no benefit from the tax
(De Vera, 2016)
38. Which statement is wrong?
A. A Tax is demand of sovereignty
B. A Toll is a demand of ownership
C. A Special Assessment is a tax
D. Customs Duty is a tax
(De Vera, 2016)

39. A Suit questioning the validity of a tax statute or laws is:


A. Taxpayer’s Suit
B. Derivative Suit
C. Class Suit
D. Representative Suit
(De Vera, 2016)

40. Although the power of taxation s basically legislative in character, it is NOT the function
of the congress to:
A. Fix with certainty the amount of taxes
B. Collect the tax levied under the law
C. Identify who should collect the tax
D. Determine who should be subject to the tax
(De Vera, 2016)

41. Also known as tax administration


A. Collection of taxes.
B. Levying of taxes.
C. Payment of taxes.
D. Incidence of taxation.
(De Vera, 2016)

42. Taxation is an inherent power because:


A. It is the life blood of the government.
B. Protection and benefit theory.
C. It co-exists with the existence of the state.
D. It is exercised for the general welfare of the people.
(De Vera, 2016)
43. All are secondary purposes of taxation EXCEPT:
A. Sumptuary purpose
B. Regulatory purpose
C. Compensatory purpose
D. Uniformity purpose
(De Vera, 2016)

44. All are similarities of taxation, police power, and power of eminent domain, EXCEPT
A. All are necessary attributes of the Constitution
B. All exist independently of the Constitution
C. All contemplate an equivalent benefit
D. All are superior to the non-impairment clause of the Constitution
(De Vera, 2016)

45. Taxation is equitable in all of the following, EXCEPT:


A. Its burden falls on those better to pay.
B. It is based on ability to pay.
C. It is based on benefits received.
D. It is based on uniformity rule.
(De Vera, 2016)

46. Which of the following is not a scheme of shifting the incidence of taxation?
A. The manufacturer transfers the tax to the consumer by adding the tax to the selling
price of the goods sold;
B. The tax forms part of the purchase price;
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, in turn to the retailer and finally to the consumer.
(De Vera, 2016)

47. Statement 1: Courts can review or inquire into the wisdom or advisability of a tax law.
Statement 2: Our constitution does not contain any provision granting tax exemption to
the government.
A. True, True
B. False, False
C. False, True
D. True, False
(De Vera, 2016)
48. Out tax laws are both:
A. Progressive and prospective
B. Civil and prospective
C. Penal and Regulatory
D. Personal and Regulatory
(De Vera, 2016)

49. The National Internal Revenue Code is also known as:


A. Republic Act 9337
B. Republic Act 8424
C. Presidential Decree 1158
D. Executive Order 464
(De Vera, 2016)

50. Which of the following is not an element of double taxation?


A. Two taxes
B. Same subject matter
C. Same year
D. Same amount
(De Vera, 2016)

51. A non-payment of a tax has a civil liability (payment of the tax) and a criminal liability
(fine and/or imprisonment).
Statement 1: A civil case has to be filed in court apart of a criminal case to be filed in
court;
Statement 2: A case filed with the Court of Tax Appeals covers both the civil and
criminal aspects of the case.
A. True; True
B. False; False
C. True; False
D. False; True
(Reyes, 2013)

52. Statement 1: A tax imposed by a law can be changed on its applicability to persons,
properties, etc., only by an amendment of the particular law that imposed it.

Statement 2: The applicability of a tax imposed by a law on certain persons, properties,


etc., may be changed by another or new law that makes reference to the original law that
imposed the tax.
A. True; True
B. False; False
C. True; False
D. False; True
(Reyes, 2013)

53. The City of Manila, claiming that it can impose taxes under the Local Government Code,
imposed a tax on banks (in addition to the percentage tax on banks imposed in the
National Internal Revenue Code). The banks within the City of Manila objected for the
various reasons given below. Which would justify the objection of the banks?
A. The power of taxation cannot be delegated.
B. The rule on double taxation
C. Uniformity on taxation
D. No double taxation, since there's national tax on banks while local tax on City of
Manila
(Reyes, 2013)

54. Which statement is true?


The prohibition in the Philippine Constitution on taxation of religious corporations is:
A. A prohibition on imposition of excise taxes on the corporation
B. A prohibition on imposition of property taxes on the corporation
C. A prohibition on imposition of any and all local taxes on the corporation
D. A prohibition on imposition of any and all national taxes on the corporation
(Reyes, 2013)

55. Statement 1: A revenue regulation must not be contrary to the provision of the law that it
implements.
Statement 2: A revenue regulation cannot expand the provision of the law that
implements by imposing a penalty when the law that authorizes the revenue regulation
does not impose a penalty.
A. True; True
B. False; False
C. True; False
D. False; True
(Reyes, 2013)

56. There can be no tax unless there is a law imposing the tax is consistent with the doctrine
or principle of:
A. Uniformity in taxation
B. Due process of law
C. Non-delegation of the power to tax
D. The power of taxation is very broad and the only limitation is the sense of
responsibility of the members of the legislature to their constituents.
(Reyes, 2013)

57. Which of the following is not an element of direct double taxation?


A. Two taxes
B. Same subject matter
C. Same year
D. Same amount
(Reyes, 2013)

58. Statement 1: A tax amnesty that forgives tax delinquency of prior years is a legislative act
of the Government.

Statement 2: A tax compromise that lowers the delinquent tax due from a taxpayer is an
executive act pursuant to a legislative grant of power to the Executive Department of the
Government.
A. True; True
B. False; False
C. True; False
D. False; True
(Reyes, 2013)

59. No person shall be imprisoned for non-payment of this:


A. Property tax
B. Excise tax
C. Poll tax
D. None of the above
(Reyes, 2013)

60. Statement 1: Direct double taxation involves two taxes by the same taxing authority. (e.g.
National Government)

Statement 2: Indirect double taxation involves two taxes by two different taxing
authorities. (e.g. National Government and LGU)
A. True; True
B. False; False
C. True; False
D. False; True
(Reyes, 2013)
61. -70. CHUA

71. A corporation may change its taxable year to calendar or fiscal year in filing its annual
income tax return, provided.
A. It seeks prior BIR approval of its proposed change in the accounting period
B. It should change its accounting period two years prior to changing its taxable year
C. It constitution and by-laws authorizes the change
(De Vera, 2016)

72. The Commissioner of Internal Revenue shall have authority to grant under meritorious
cases, a reasonable extension of not more than 30 days for filling the donor’s tax return.
In case of gifts made by nonresidents, the return may be filed with Philippine Embassy
or Consulate in the country where he is domiciled at the time of the transfer, or directly
with the Office of the Commissioner.
A. Only statement 1 is true
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
(De Vera, 2016)

73. The BIR Commissioner to suspend business operations for any of the following
violations, except
A. Failure to issue receipts or invoices
B. Failure to file a VAT return under Section 114 of NIRC
C. Understatement of taxable sale or receipts by 20 % of his correct taxable sales or
receipts for the taxable quarter
D. All are punishable violations.
(Valencia, 7th Edition)

74. The following are the powers of the Commissioner of Internal Revenue(CIR), except.
A. Delegate powers
B. Interpret tax laws
C. Compromise, abate and refund or credit taxes.
D. All are exercisable by the CIR.
(Valencia, 7th Edition)
75. Statement 1: Final decisions made by the Court of Appeals (CTA) shall be taken for
review to higher courts within 15 days from notice of ruling, decision, or judgment of the
CTA.

Statement 2: The tax assessments issued by the Regional Directors, Assistant


Commissioners, and Deputy Commissioners may be appealed administratively to the
CIR.
A. Only statement 1 is true
B. Only statement 2 is true
C. Both are true
D. Both are false
(Valencia, 7th Edition)

76. Statement 1: The Bureau of Internal Revenue shall have a chief and four (4) assistant
chiefs to be known as secretary and undersecretaries
Statement 2: Transformation is a form of tax escape by a manufacturer or producer who
improves his proceeds of production thereby minimizing his unit production cost:
A. Only statement 1 is true
B. Only statement 2 is true
C. Both are true
D. Both are false
(Valencia, 7th Edition)

77. Sources of tax laws include, except,


A. Constitutional laws
B. Statutes
C. Opinions of tax officials
D. All are sources.
(Valencia, 7th Edition)

78. Statement 1: The government can tax its agencies and instrumentalities.
Statement 2: Tax laws can never have a retroactive effect.
A. Only statement 1 is true
B. Only statement 2 is true
C. Both are true
D. Both are false
(Valencia, 7th Edition)
79. A PEZA registered entity are classified based on the following nature of activities,
except:
A. Export Enterprise
B. Ecozone Domestic Market Enterprise
C. Free Trade Enterprise
D. Outsourcing Enterprise
(IRR of RA 7916)

80. Statement 1: One of the tasks of PEZA is to grant incentives to and facilitate the business
operations of investors in export-oriented manufacturing and service facilities inside the
economic zones.

Statement 2: Philippine Economic Zone Authority (PEZA) is an agency not attached to


the Department of Trade and Industry.
A. Only statement 1 is true
B. Only statement 2 is true
C. Both are true
D. Both are false
(IRR of RA 7916)

81. I. Due process of law in taxation under the constitution is a grant of power.
II. Provisions in the Philippine constitution on taxation are grants of power.
A. True; True
B. True; false
C. False; true
D. False; false
(CPAR Special Notes, 2017)

82. I. In the Philippines, there may be double taxation.


II. Taxation may be used to implement the police power of the state.
A. True; True
B. True; false
C. False; true
D. False; false
(CPAR Special Notes, 2017)
83. The Bureau of Internal Revenue shall have a chief and four (4) assistant chiefs to be
known as
A. Secretary and Assistant Secretaries
B. Secretary and Undersecretaries
C. Commissioner and Assistant Commissioners
D. Commissioners and Deputy Commissioners
(CPAR Special Notes, 2017)

84. Congress can impose a tax at any amount and at anytime shows that
A. Taxation is an inherent power of the state.
B. Taxation is essentially a legislative power.
C. Taxation is a very broad power of the state.
D. Taxation is based on taxpayers’ ability to pay.
(CPAR Special Notes, 2017)

85. The Department of Finance thru its officers entered into a contract with foreign investors
granting them exemption from all forms of taxes to encourage investments in the Phils.
The contract is
A. Void, unless the President ratifies
B. Void, because the power to grant tax exemption is vested in Congress.
C. Valid, if the President has authorized the officers to enter into such contract.
D. Valid, because the purpose is to promote public welfare.
(CPAR Special Notes, 2017)

86. A law granting tax exemption requires the concurrence of


A. Majority vote of members of congress
B. 2/3 vote of members of Congress.
C. 3/4 vote of members of Congress.
D. Unanimous vote of members of Congress.
(CPAR Special Notes, 2017)
87. Which of the following statements is wrong? A revenue bill:
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 a Senate version approved separately, and then
consolidated, with both houses approving the consolidation version.
D. May be recommended by the President to Congress.
(CPAR Special Notes, 2017)

88. The following are the characteristics of our internal revenue laws except:
A. Political in nature.
B. Civil in nature.
C. Generally prospective in application.
D. May operate retrospectively if congress so provides.
(CPAR Special Notes, 2017)

89. As to scope of the legislative power to tax, which is not correct?


A. Where there are no constitutional restrictions, and provided the subjects are within
the territorial jurisdiction of the state, Congress has unlimited discretion as to the
persons, property or occupations to be taxed.
B. In the absence of any constitutional prohibition, Congress has the right to levy a
tax of any amount it sees fit.
C. The discretion of Congress in imposing taxes extends to the mode, method or kind
of tax, unless restricted by the constitution.
D. The sole arbiter of the purpose or which taxes shall be levied is Congress,
provided the purpose is public and the courts may not review the levy of the tax to
determine whether or not the purpose is public.
(CPAR Special Notes, 2017)

90. The National Internal Revenue Code of 1988 is


A. RA 9337
B. CA 466
C. RA 9504
D. RA 8424
(CPAR Special Notes, 2017)
91. There is no taxable income until such income is recognized. Taxable income is
recognized when the
A. taxpayer fails to include the income in his income tax return.
B. income has been actually received in money or its equivalent.
C. income has been received, either actually or constructively.
D. transaction that is the source of the income is consummated.
(NFJPIA Mock Board)

92. Keyrand, Inc., a Philippine corporation, sold through the local stock exchange 10,000
PLDT shares that it bought 2 years ago. Keyrand sold the shares for P2 million and
realized a net gain of P200,000.00. How shall it pay tax on the transaction?
A. It shall declare a P2 million gross income in its income tax return, deducting its
cost of acquisition as an expense.
B. It shall report the P200,000.00 in its corporate income tax return adjusted by the
holding period.
C. It shall pay 5% tax on the first P100,000.00 of the P200,000.00 and 10% tax on
the remaining 100,000.00.
D. It shall pay a tax of one-half of 1% of the P2 million gross sales.
(NFJPIA Mock Board)

93. The spouses Helena and Federico wanted to donate a parcel of land to their son Dondon
who is getting married in December, 2011. The parcel of land has a zonal valuation of
P420,000.00. What is the most efficient mode of donating the property?
A. The spouses should first donate in 2011 a portion of the property valued at
P20,000.00 then spread the P400,000.00 equally for 2012, 2013, 2014 and 2015.
B. Spread the donation over a period of 5 years by the spouses donating P100,000.00
each year from 2011 to 2015.
C. The spouses should each donate a P110,000.00 portion of the value of the
property in 2011 then each should donate P100,000.00 in 2012.
D. The spouses should each donate a P100,000.00 portion of the value of the
property in 2011, and another P100,000.00 each in 2012. Then, in 2013, Helena
should donate the remaining P20,000.00.
(NFJPIA Mock Board)
94. Mia, a compensation income earner, filed her income tax return for the taxable year 2007
on March 30, 2008. On May 20, 2011, Mia received an assessment notice and letter of
demand covering the taxable year 2007 but the postmark on the envelope shows April 10,
2011. Her return is not a false and fraudulent return. Can Mia raise the defense the
defense of prescription?
A. No. The 3-year prescriptive period started to run on April 15, 2008, hence, it has
not yet expired on April 10, 2011.
B. Yes. The 3-year prescriptive period started to run on April 15, 2008, hence, it had
already expired on April 10, 2011.
C. No. The prescriptive period started to run on March 30, 2008, hence, the 3-year
period expired on April 10, 2011.
D. Yes. Since the 3-year prescriptive period started to run on March 30, 2008, it
already expired by May 20, 2011.
(NFJPIA Mock Board)

95. Double taxation in its general sense means taxing the same subject twice during the same
taxing period. In this sense, double taxation
A. violates substantive due process.
B. does not violate substantive due process.
C. violates the right to equal protection.
D. does not violates the right to equal protection.
(NFJPIA Mock Board)

96. Guidant Resources Corporation, a corporation registered in Norway, has a 50 MW


electric power plant in San Jose, Batangas. Aside from Guidant’s income from its power
plant, which among the following is considered as part of its income from sources within
the Philippines?
A. Gains from the sale to an Ilocos Norte power plant of generators bought from the
United States.
B. Interests earned on its dollar deposits in a Philippine bank under the Expanded
Foreign Currency Deposit System.
C. Dividends from a two-year ol Norwegian subsidiary with operations in Zambia
but derives 60% of its gross income from the Philippines.
D. Royalties from the use in Brazil of generator sets designed in the Philippines by
its engineers.
(NFJPIA Mock Board)
97. Anktryd, Inc., bought a parcel of land in 2009 for P7 million as part of its inventory of
real properties. In 2010, it sold the land for P12 million which was its zonal valuation. In
the same year, it incurred a loss of P6 million for selling another parcel of land in its
inventory. These were the only transactions it had in its real estate business. Which of the
following is the applicable tax treatment?
A. Anktryd shall be subject to a tax of 6% of P12 million.
B. Anktryd could deduct its P6 million loss from its P5 million gain.
C. Anktryd’s ain of P5 million shall be subject to the holding period.
D. Anktryd’s P6 million loss could not be deducted from its P5 million gain.
(NFJPIA Mock Board)

98. Aplets Corporation is registered under the laws of the Virgin Islands. It has extensive
operations in Southeast Asia. In the Philippines, its products are imported and sold at a
mark-up by its exclusive distributor, Kim’s Trading, Inc. The BIR compiled a record of
all the imports of Kim from Aplets and imposed a tax on Aplets net income derived from
its exports to Kim. Is the BIR correct?
A. Yes. Aplets is a non-resident foreign corporation engaged in trade or business in
the Philippines.
B. No. The tax should have been computed on the basis of gross revenues and not
net income.
C. No. Aplets is a non-resident foreign corporation not engaged in trade or business
in the Philippines.
D. Yes. Aplets is doing business in the Philippines through its exclusive distributor
Kim’s Trading, Inc.
(NFJPIA Mock Board)

99. The actual effort exerted by the government to effect the exaction of what is due from the
taxpayer is known as
A. assessment.
B. levy.
C. payment.
D. collection.
(NFJPIA Mock Board)
100. Passive income includes income derived from an activity in which the earner does
not have any substantial participation. This type of income is
A. usually subject to a final tax.
B. exempt from income taxation.
C. taxable only if earned by a citizen.
D. included in the income tax return.
(NFJPIA Mock Board)

101. In case of conflict between the Tax Code and the Philippine Accounting
Standards (PAS).
A. PAS shall prevail over the Tax Code.
B. Tax Code shall prevail over PAS.
C. PAS and Tax Code shall be both disregarded.
D. The taxpayer may choose between the PAS or the Tax Code.
(CPAR, 2016)

102. Our National Internal Revenue Laws are


A. Political in nature
B. Penal in nature
C. Criminal in nature
D. Civil in nature
(CPAR, 2016)

103. A tax wherein both the incidence of or the liability for the payment of the tax as
well as the burden of the tax falls on the same person.
A. Direct tax
B. Value added tax
C. Indirect tax
D. Percentage tax
(CPAR, 2016)

104. The power of taxation is exercised by


A. The President
B. The Supreme Court
C. Bureau of Internal Revenue
D. Congress
(CPAR, 2016)
105. Which of the following statements is not correct?
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 in time for filing of returns and payment of taxes.
D. The power of taxation is shared by the legislative and executive departments of
the government.
(CPAR, 2016)

106. Tax imposed upon performance of an act, the enjoyment of privilege or the
engaging in an occupation.
A. Personal, poll or capitation
B. Property
C. Excise
D. Regressive
(CPAR, 2016)

107. Which of the following statements is correct?


A. The Marshall Doctrine is not used in practice since it is unconstitutional
B. An ex post facto tax law violates the constitution
C. A tax bill personally drafted by the president shall become a law after approval by
congress
D. It is in the public interest that errors of public officials should bind the
government to limit government abuse
(Banggawan, 2017)

108. Which is not an ad valorem tax?


A. Real property tax
B. Excise tax on cigar
C. Income tax
D. Donor’s tax
(Banggawan, 2017)
109. In terms of financial measures, which of the following threshold for qualification
as large taxpayers is incorrect?
A. Gross receipts exceeding P1B
B. Net worth exceeding P300M
C. Gross purchase exceeding P800M
D. Gross Sales exceeding P1.5B
(Banggawan, 2017)

110. As to tax payment measures, which of the following threshold for the
qualification as large taxpayer is incorrect?
A. Annual income tax payments of P1M
B. Annual value added tax payments of P1M
C. Quarterly percentage tax payments of P200,000
D. Annual documentary stamp tax of P1M
(Banggawan, 2017)

111. Tax law, in general, is composed of three elements, except


A. The Code
B. Decisions of various courts that hear tax cases.
C. Regulations and rulings
D. Ordinances
(Ballada, 2015)
112. Sources of tax laws:
1. Constitution
2. Statutes and Presidential Decrees
3. Revenue Regulations by the Department of Finance
4. Rulings issued by the Commissioner of Internal Revenue and Opinions by the
Secretary of Justice
5. Decisions of the Supreme court and the Court of Tax Appeals
6. Provincial, city , municipal, and barangay ordinances subject to limitations set
forth in the Local Government Code
7. Treaties or international agreements the purpose of which is to avoid or minimize
double taxation.

A. 1, 2, 5, and 6
B. 1, 2, 3, 4, and 5
C. 1, 2, 3, 4, 5, and 6
D. 1, 2, 3, 4, 5, 6, and 7
(Ballada, 2015)
113. National taxes includes:
1. Income taxes 5. Excise tax
2. Estate and Donor’s Taxes 6. Documentary stamp tax
3. Value-added Tax 7. Real property tax
4. Other Percentage Tax 8. Professional tax

A. 1, 2, 3, 4, 5, and 6
B. 1, 2, 3, 5, 6, 7, and 8
C. 1, 2, 3, 5, 6, and 8
D. 1, 2, 3, 4, 5, 6, and 7
(Ballada, 2015)

114. Local taxes include:


1. Real property tax
2. Business taxes fees and charges
3. Professional tax institutions
4. Community tax
5. Tax on banks and other financial

A. 1, 2, 3, 4, and 5
B. 1, 2, 3, and 4
C. 2, 3, 4, and 5
D. 1, 2, and 3
(Ballada, 2015)

115.
I. Revenue law is a law passed for the purpose of authorizing the levy and collection of
taxes in some form to raise revenue.

II. Internal revenue laws are either political or penal in nature although there are penalties
in case of violations.
A. True; True
B. False; True
C. True ; False
D. False; False
(Ballada, 2015)

116.
I. For married individuals, the husband and wife shall compute separately the tax due on
their respective taxable income.

II. If any income cannot be definitely attributed to or identified as income exclusively


earned or realized by either spouses, the same shall be divided in any ratio between the
spouses for the purpose of determining their respective taxable income.
A. True; True
B. False; True
C. True; False
D. False; False
(Ballada, 2015)

117.
I. In computing for the taxable income, fraction of a peso is disregarded.

II. For the tax due, a fraction amounting to fifty centavos or more is rounded off to a
peso, while a fraction amounting to less than fifty centavos is disregarded.
A. True; True
B. False; True
C. True ; False
D. False; False
(Ballada, 2015)

118.
I. Total family income includes primary income and other income from sources received
by all members of the nuclear family.

II. A single person living alone is considered as a nuclear family.

III. For married taxpayers, both spouse are entitled to claim for additional exemption.
A. True; True; False
B. False; True; True
C. True ; False; True
D. False; False; True
(Ballada, 2015)

119. Allowable deductions from business income includes:


1. Basic personal and /or additional exemptions.
2. Premium payments on health and/or hospitalization insurance
3. Itemized deductions under the Tax Code
4. Optional Standard Deduction.

A. 1, 2, 3, and 4
B. 1, 2, and 3
C. 1, 3, and 4
D. 1, 2, and 4
(Ballada, 2015)

120.
I. If the employee should have additional dependents during the taxable year, he may
claim not claim the corresponding additional exemption in full for such year.

II. If the taxpayer dies during the taxable year, his death shall affect the amount of
personal and additional exemptions his estate may claim.

III. If the spouse dies or any dependents dies or if any such dependent marries, becomes
twenty-one years of age, or gets gainfully employed during the taxable year, the taxpayer
may still claim the same exemption as if the change occurred at the end of the year.
A. True; True; False
B. False; True; True
C. True ; False; True
D. False; False; True
(Ballada, 2015)

121. -130. GUILLERMO

131. Where does taxing power of the provinces, municipalities and cities precede
from?
A. Constitutional grant
B. Legislative enactment.
C. Presidential decree or Executive act.
D. Local legislation.
(Tabag, 2018)
132. An annual tax of P1,000 was imposed upon all residents of the Philippines, who
are above 21 years of age, with a gross income of P250,000, whether or not they send
their children to public schools, for the purpose of raising funds in order to improve
public school buildings. The tax is:
A. Violative of the equal protection clause of the Constitution.
B. Confiscatory.
C. For public purpose.
D. Contradicts the inherent limitations.
(RESA Lecture, 2017)

133. The President of the Philippines and the Prime Minister of Japan entered into an
executive agreement in 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 tax laws. What basic
characteristic of taxation has been violated by this agreement?
A. Inherent limitation
B. Theoretical justice
C. Legislative in character
D. Administrative feasibility
(RESA Lecture, 2017)

134. This tax law must be capable of convenient, just and effective administration
A. Theoretical justice
B. Fiscal adequacy
C. Administrative feasibility
D. Rule of apportionment
(Tabag, 2018)

135. The following constitute double taxation, except one


A. Both taxes are imposed in the same amount
B. Both taxes are levied for the ame purpose
C. Both taxes are imposed by the same taxing authority
D. Both taxes are imposed upon the same person
(PRTC Lecture, 2017)
136. Which is not a double taxation?
A. A lessor of property pays a real estate tax and income tax on the same property
B. Imposition of tax on the finished products and the raw materials used in the
production of the said finished products
C. Imposition of tax on corporate income and shareholders dividends from the same
corporation
D. All of the above
(Tabag, 2018)

137. One of the following is not a manifestation of lifeblood theory:


A. Imposition of tax even in the absence of constitutional grant.
B. Right to select objects and subjects of taxation.
C. No injunction to enjoin tax collection.
D. Equal protection of law.
(CRC-ACE Lecture, 2017)

138. The usual mode(s) of avoiding the occurrence of double taxation is/are:
A. Reciprocal exemption, either by law or treaty
B. Tax credit of foreign taxes paid
C. Deduction for foreign taxes paid
D. All of the above
(Tabag, 2018)

139. Which is the best answer? A tax reform at any given time underscores the fact
that:
A. Taxation is inherent power of the state
B. Taxation is a power that is very broad
C. Taxation is essentially a legislative power
D. The State can and should adopt progressive taxation
(CRC-ACE Lecture, 2017)

140. The strongest of all inherent powers of the government is


A. Power of taxation
B. Police power
C. Power of eminent
D. Power of recall
(Tabag, 2018)
141. The power to impose taxes is exercised by the
A. President
B. Supreme Court
C. BIR
D. Congress
(CPAR Reviewer, 2017)

142. One of the characteristics of internal revenue laws is that they are:
A. Criminal in nature
B. Penal in nature
C. Political in nature
D. Generally, prospective in application
(CPAR Reviewer, 2017)

143. Which statement is true?


The prohibition in the Philippine Constitution on taxation of religious corporation is
A. A prohibition on imposition of excise taxes on the corporation
B. A prohibition on imposition of property taxes on the corporation
C. A prohibition on imposition of any and all local taxes on the corporation
D. A prohibition on imposition of any and all national taxes on the corporation.
(CPAR Reviewer, 2017)

144. Which of the following statements is not correct?


A. Taxes may be imposed to raise revenues or to provide disincentives to certain
activities within the state.
B. The state can have the power to taxation even if the Constitution does not
expressly give it the power to tax.
C. For the exercise of the power of taxation, the state can tax anything at any time.
D. The provisions of taxation in the Philippine Constitution are grants of power and
not limitations on taxing powers.
(CPAR Reviewer, 2017)

145.
I. 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.

II. 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 law-making
A. True, true:
B. False, false
C. True, false
D. False, True
(CPAR Reviewer, 2017)

146. For an enhancement on revenue collection, the Bureau of Internal Revenue may
adopt measures that will minimize or eliminate tax evasion. In this regard:
Statement 1. A donation or gift of money or property directly to a political candidate is
subject to the donor's tax under the National Internal Revenue Code, and hence the donor
may be required to withhold a donor's tax on it.
Statement 2 A payment of money to a person who made campaign materials for a
political candidate is income payment by the payer to the payee, and hence the payor may
be required to withhold an income tax on it.
A. True, true:
B. False, false
C. True, false
D. False, True
(CPAR Reviewer, 2017)

147. Which statement is correct? A revenue regulation as a source of tax law, is:
A. Promulgated by the Bureau of Internal Revenue
B. Promulgated by the Department of Finance
C. Promulgated by the Department of Finance upon the recommendation of the
Bureau of Internal Revenue
D. An interpretation of the revenue law by the Bureau of Internal Revenue
(CPAR Reviewer, 2017)
148. A tax must be imposed for a public Purpose. Which of the following is not a
public purpose?
A. National defense
B. Public education
C. Improvement of the sugar industry
D. None of the above
(CPAR Reviewer, 2017)

149. The City of Manila, claiming that it can impose taxes under the Local
Government Code, imposed a tax on banks (in addition to the percentage tax on banks
imposed in the National Internal Revenue Code) The banks within the City of Manila
objected for the various reasons given below. Which would justify the objection of the
banks?
A. The power of taxation cannot be delegated
B. The rule on double taxation
C. Uniformity in taxation
D. None of the above.
(CPAR Reviewer, 2017)

150. Statement 1: Direct double taxation is prohibited by the Philippine Constitution.


Statement 2: Indirect double taxation is allowed by the Philippine Constitution.
A. True, true
B. False, false
C. True. false
D. False, true
(CPAR Reviewer, 2017)

151. -160. ORTEGA


161. -170. PAGUNSAN

171. Who among the following individual taxpayers is not allowed to claim deductible
expenses as a deduction from his gross income?
A. Non-resident citizen
B. Resident alien
C. Non-resident alien engaged in trade or business in the Philippines
D. Non-resident alien not engaged in trade or business in the Philippines
(Banggawan, 2017)
172. Who among the following individual taxpayers may avail of the itemized
deductions for income tax purposes?
A. Non-resident citizen on his income from sources without the Philippines
B. Resident alien on his income from sources without the Philippines
C. Non-resident alien engaged in trade or business in the Philippines on his income
from sources without the Philippines
D. None of the foregoing
(Banggawan, 2017)

173. One of the following is not a requisite for an expense to be claimed as a deduction
from gross income:
A. It must be ordinary and necessary.
B. It must be actually paid during the taxable year.
C. It must be connected with the taxpayer’s trade, business or profession.
D. It must be reasonable.
(Banggawan, 2017)

174. Which of the following items is not part of “expenses in general” and, therefore,
is not deductible from gross income?
A. Grossed-up monetary value of fringe benefit furnished by the employer to the
employee
B. electricity bill consumed power of the preceding taxable period but not yet
actually paid
C. unused office supplies
D. entertainment expenses
(Banggawan, 2017)

175. Which of ff. items of interest expense cannot be deducted from gross income?
A. interest paid on a business loan contracted by the taxpayer from his wealthy uncle
B. interest on scrip dividend declared by the corporation
C. interest on delinquent taxes
D. interest on delayed installment payments for the purchase of home theater
equipment.
(Banggawan, 2017)

176. Which of the ff. items of interest expense may be deducted from gross income?
A. interest on corporations preferred stock
B. interest on loan for construction of residential house
C. interest on payables to suppliers already due at the end of the taxable year but not
yet paid
D. interest on bank loan to finance petroleum exploration
(Banggawan, 2017)

177. Which of the ff. items of interest expense may be deducted from gross income?
A. interest deducted in advance by the bank on a loan where no amortization
payment has yet been made and the taxpayer reports income on cash basis.
B. interest for delinquency in the payment of taxes
C. interest paid out of a personal loan by taxpayer from his grandmother
D. interest on the corporation’s preferred stock
(Banggawan, 2017)

178. Which of the ff. items may be claimed as a deduction from gross income?
A. interest paid by x in advance on his bank loan to remodel his house; the
indebtedness was fully paid by x in the same year the indebtedness was incurred (
cash basis in reporting income is adopted by X.)
B. interest paid by X on the indebtedness of his friend secured by a mortgage on Y’s
apartment building in order to avoid foreclosure
C. interest paid by Z to h his sister on the loan contracted by Z to supply additional
capital to his buy and sell business.
D. fines and penalties for late payment of taxes.
(Banggawan, 2017)

179. Which of the ff. taxes may be deducted from gross income?
A. percentage tax on sale of listed stock
B. real property tax on residence
C. business permit fee paid to the city
D. special assessment
(Banggawan, 2017)

180. Which of the ff. taxes may be deducted from gross income?
A. Real property tax on commercial building
B. Income tax
C. Tax on interest on bank deposit
D. Electric energy consumption tax on business establishment
(Banggawan, 2017)

181. Mr. Alas sells shoes in Makati through a retail store. He pays the VAT on his
gross sales to the BIR and the municipal license tax based on the same gross sales to the
City of Makati. He comes to you for advice because he thinks he is being subjected to
double taxation. What advice will you give him?
A. Yes, there is double taxation and it is oppressive.
B. The City of Makati does not have this power
C. Yes, there is double taxation and this is illegal in the Philippines
D. Double taxation is allowed where one tax is imposed by the national government
and the other by the local government.
(CPAR Final Pre-Board, 2017)

182. Government is said to be exempt from taxation. Which of the following is an


exemption to this rule?
A. A contract entered into by the AFP and SM where SM furnishes the AFP with
combat boots
B. A government employee buying 30 printers for office use.
C. A contractor for the government claiming exemption from contractor’s tax
D. DSWD claiming tax exemption on goods donated by the LGU of Albay
(CPAR Final Pre-Board, 2017)

183. Which of the following are not deputized agents for the collection of national
internal revenue taxes?
A. The Commissioner of Customs and his subordinates with respect to the collection
of national internal revenue taxes on imported articles.
B. The head of the appropriate government office and his subordinates with respect
to the collection of energy tax.
C. Banks duly accredited by the Commissioner with respect to receipt of payments
of internal revenue taxes authorized to be made through banks.
D. Any officer or employee of an authorized agent bank assigned to transmit tax
returns.
(CPAR Final Pre-Board, 2017)

184. Occupying the forefront of tax law enforcement is the:


A. Department of Finance
B. Bureau of Internal Revenue
C. Legislative Department
D. Executive Department
(CPAR Final Pre-Board, 2017)

185. The powers and duties of the Bureau of Internal Revenue comprehend the
following, except?
A. Assessment and collection of all national and local revenue taxes.
B. Enforcement of all forfeitures, penalties and fines in connection connected with
the collection of national internal revenue taxes.
C. Execution of judgment in all cases decided in its favor by the Court of Appeals,
and the ordinary courts.
D. Effecting and administering the supervisory and police powers conferred to it by
the Tax Code or other laws.
(CPAR Final Pre-Board, 2017)

186. The power to decide disputed assessments, refunds of internal revenue taxes, fees
or other charges, penalties imposed in relation thereto, or other matters arising under the
Tax Code or other laws administered by the Bureau of Internal Revenue is vested with:
A. The Commissioner of the BIR
B. The Secretary of Finance
C. The Court of Tax Appeals
D. The Regular Courts
(CPAR Final Pre-Board, 2017)

187. It is the official action of an administrative officer in determining the amount of


tax due from a taxpayer, or it may be a notice to the effect that the amount stated therein
is due from the taxpayer with a demand for payment of the tax or deficiency stated
therein.
A. Tax investigation
B. Tax audit
C. Tax assessments
D. Tax mapping
(CPAR Final Pre-Board, 2017)

188. The following are the reasons which necessitates the filing of an administrative
claim for refund with the BIR, except:
A. To afford the Commissioner an opportunity to consider the claim.
B. To give the Commissioner a chance to correct the errors of subordinate officers.
C. To notify the Government that such taxes have been questioned and the notice
should be borne in mind in estimating the revenue available for expenditures.
D. To give ample time to the Commissioner in preparing the cash to be disbursed for
the taxpayer’s refund.
(CPAR Final Pre-Board, 2017)

189. A tax is invalid in all of the following, except:


A. Theory of taxation and its purpose are disregarded
B. Basis of taxation is not recognized
C. Inherent and constitutional limitations are not observed
D. It results to double taxation
(CPAR Final Pre-Board, 2017)

190. To escape a liability for a deficiency estate tax, after paying the estate tax, must
secure a written discharge of personal liability from:
A. The heirs
B. The commissioner
C. The probate court
D. The court where the estate is being settled
(CPAR Final Pre-Board, 2017)
191.
STATEMENT 1:A tax imposed by a law can be changed on its applicability to persons,
properties, etc, only by an amendment of the particular law that imposed it.

STATEMENT 2: The applicability of a tax imposed by a law on certain persons,


properties, etc., may be changed by another or new law that makes reference to the
original law that imposed the tax:
A. True;True
B. False;False
C. True;False
D. False;True
(Reyes Reviewer, 2013)

192.
STATEMENT 1:A revenue recognition must not be contrary to the provision of the law
that it implement.

STATEMENT 2:A revenue regulation cannot expand the provision of the law that
implements by imposing a penalty when the law that authorizes the revenue regulation
does not impose a penalty
A. True;True
B. False;False
C. True;False
D. False;True
(Reyes Reviewer, 2013)
193.
STATEMENT 1:Direct double taxation is prohibited by the Philippine Constitution
STATEMENT 2:Indirect double taxation is allowed by the Philippine Constitution
A. True;True
B. False;False
C. True;False
D. False;True
(Reyes Reviewer, 2013)

194.
STATEMENT 1:The power to tax can be delegated to units of local government, but
with limitations, as may be provided by law.
STATEMENT 2:The power to tax cannot be delegated to the executive department of the
National Government.
A. True;True
B. False;False
C. True;False
D. False;True
(Reyes Reviewer, 2013)

195. 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
(Ampongan Reviewer, 2012)

196. The Commissioner of Internal Revenue can delegate power to


A. Refund or credit internal revenue tax
B. Recommend rules and regulations to the Secretary of Finance
C. Assign and re-assign revenue officer to establishments of excisable articles
D. Compromise or abate tax liability
(Banggawan, 2017)
197. The BIR is under the supervision of
A. The Bureau of Customs
B. The President
C. The Department of Finance
D. Congress
(Banggawan, 2017)

198. Philippine tax laws are, by nature,


A. Political
B. Civil
C. Political and civil
D. Penal and civil
(Banggawan, 2017)

199. Which one of the following is the BIR not empowered to do?
A. Assess national taxes
B. Collect income, business and transfer taxes
C. Assess and collect local taxes
D. Enforce forfeitures, penalties and fines
(Banggawan, 2017)

200. Which of the ff. is not considered as a step in making a revenue regulation
effective?
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
(Ampongan Reviewer, 2012)

201. Which of the following is not correct?


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 on taxation will still allow
the Bureau of Internal Revenue 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
(Reyes, 2013)

202. That the legislative body can impose a tax at any amount underscores the legal
truism that:
A. Taxation is an inherent power of the state
B. Taxation is a very broad power of the state
C. Taxation is essentially a legislative power
D. None of the above
(Reyes, 2013)

203. The following taxes, fees and changes are collected by the BIR except
A. Excise taxes
B. Other percentage taxes
C. Income tax
D. None of the above
(Reyes, 2013)

204. An internal revenue officer (IRO), having been reliably informed from
unimpeachable source that articles subject to excise taxes were kept in the house of Y
entered said house to look for and to seize the aforementioned articles over the objection
of Y. Since said officer was not armed with a search warrant, Y invoked the sanctity of
his home. Is the internal revenue officer’s actuation described above sanctioned by law or
not?
A. Yes, because of primary jurisdiction of the BIR over excisable goods pursuant to
the lifeblood doctrine.
B. Yes, the IRO is exempted from obtaining a search and seizure warrant.
C. No, violative of search and seizure clause of the Constitution.
D. No, violative of the right to privacy and abode.
(De Vera, 2017)

205. The secretary of Finance, upon recommendations of the Commissioner of Internal


Revenue, issued a Revenue Regulation using gross income as the tax base for
corporations doing business in the Philippines. Is the Revenue Regulation valid?
A. Yes, the Secretary of Finance has the power to issue rules and regulations.
B. Yes, the gross income taxation over corporations is valid.
C. No, Secretary of Finance has virtually amended the NIRC.
D. No, only the Commissioner of the BIR has the authority to make revenue rules
and regulations.
(De Vera, 2017)
206. The power to interpret the provisions of National Internal Revenue Code and
other tax laws shall be under the exclusive and original jurisdiction of the
A. The Commissioner of Internal Revenue, subject to the review by the Secretary of
Finance
B. The Commissioner of Internal Revenue, subject to the exclusive appellate
jurisdiction of the Court of Tax Appeals
C. The Court of Tax Appeals, subject to the exclusive appellate jurisdiction of the
Court of Appeals
D. The Regular Courts, subject to the review by the Court of Tax Appeals
(De Vera, 2017)

207. Which of the following constitute objectionable double taxation?


A. A license fee and a tax imposed on the same business or occupation for selling the
same articles.
B. A tax imposed both on the occupation of fishing and on fishpond operation.
C. Persons engaged in leasing or selling real property are subject to real estate
dealers tax and their sales are also subject to 10% VAT.
D. A tax of 1% is imposed for bank reserve deficiency while a penalty of 1/10 of !%
is also imposed as a consequence of such reserve deficiency.
(Ampongan, 2015)
208. Which of the following statements is correct?
A. Tax laws can never have a retroactive effect.
B. The government cannot tax its agencies and instrumentalities.
C. A taxpayer’s suit can be filed by any taxpayer in any instance against the
government.
D. In the Philippines, there may be double taxation.
(Ampongan, 2015)

209. Your client owns a row of apartments. He complains to you that he is being
required to pay four (4) kinds of taxes on this line of business alone. From the list given
by your client, which 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 the apartment house.
D. Income tax on income from rent.
(Ampongan, 2015)

210.
Statement 1. In case of conflict between a revenue regulation and the provisions of
National Internal Revenue Code, the latter shall prevail.

Statement 2. The revocation of a revenue regulation cannot be made retroactive even if


the reason for its revocation is thai it is erroneous or contrary to law.
A. True, False
B. True, True
C. False, True
D. False, False
(Ampongan, 2015)

211. The following are coercive means in the collection of taxes by the BIR, except:
A. Distraint and levy
B. Seizure of goods on which the Government has claim for unpaid taxes
C. Enforcement of tax lien
D. Compromise
(CPAR Reviewer, 2018)

212. Which of the following items is subject to income tax?


A. Dividend received by an insured out of a life insurance policy
B. Termination pay received by an employee due to job-related sickness
C. Holiday pay, hazard pay, night shift differential pay and overtime pay of
minimum wage earner
D. None of the foregoing
(CPAR Reviewer, 2018)

213. There is no taxable income until such income is recognized. Taxable income is
recognized when the
A. taxpayer fails to include the income in his income tax return.
B. income has been actually received in money or its equivalent.
C. income has been received, either actually or constructively.
D. transaction that is the source of the income is consummated.
(CPAR Reviewer, 2018)

214. Double taxation in its general sense means taxing the same subject twice during
the same taxing period. In this sense, double taxation
A. violates substantive due process.
B. does not violate substantive due process.
C. violates the right to equal protection.
D. does not violates the right to equal protection.
(CPAR Reviewer, 2018)

215. The actual effort exerted by the government to effect the exaction of what is due
from the taxpayer is known as
A. Assessment
B. Levy
C. Payment
D. Collection
(CPAR Reviewer, 2018)
216.
I. In the Philippines, there may be double taxation.
II. Taxation may be used to implement the police power of the state.
A. True; True
B. False; true
C. True; false
D. False; false
(CPAR Reviewer, 2018)
217.
I. Tax is imposed regardless of public improvement.
II. Special assessment is imposed regardless of public improvements.
A. True; True
B. False; true
C. True; false
D. False; false
(CPAR Reviewer, 2018)
218.
I. Tax avoidance is the use by the taxpayer of legal or fraudulent means to avoid or
defeat taxes.
II. Tax evasion is the use by the taxpayer of illegal or fraudulent means to avoid or defeat
taxes.
A. True; True
B. False; true
C. True; false
D. False; false
(CPAR Reviewer, 2018)
219.
I. The President has the power to veto a revenue bill even if such bill was already
approved by Congress
II. The President is superior to Congress as he/she can veto any bill even if already
approved by Congress.
A. True; True
B. False; true
C. True; false
D. False; false
(CPAR Reviewer, 2018)
220.
I. License fee is a charge imposed under police power.
II. Special assessment is levied on lands only.
A. True; True
B. False; true
C. True; false
D. False; false
(CPAR Reviewer, 2018)

221. Which is not a legislative act?


A. Determination of the subject of the tax
B. Setting the amount of the tax
C. Assessment of the tax
D. Determining the purpose of the tax
(Banggawan, 2017)

222. Which of the powers of the Commissioner of Internal Revenue cannot be


delegated?
A. The examination of tax return and the determination of tax due thereon
B. To refund or credit tax liabilities in certain cases
C. The power to compromise or abate any tax liability involving basic deficiency tax
of P500,000 and minor criminal violations
D. The power to reverse a ruling of the Bureau of Internal Revenue
(Banggawan, 2017)

223. The agreement among nations to lessen tax burden of their respective subjects is
called
A. Reciprocity
B. International comity
C. Territoriality
D. Tax minimization
(Banggawan, 2017)

224. When a legislative body taxes persons and property, rights and privileges under
the same taxable category at the same rate, this is referred to as compliance with the
constitutional limitation of:
A. Equity
B. Uniformity
C. Due process
D. Equal protection clause
(Banggawan, 2017)
225. Which of the following is not exercised by the government?
A. Taxation
B. Police power
C. Eminent domain
D. Exploitation
(Banggawan, 2017)

226. A type of Double Taxation that occurs when all the element of double taxation
exists for both impositions
A. Direct double taxation
B. Indirect double taxation
C. Forward double taxation
D. Inverse double taxation
(Banggawan, 2017)

227. A type of Double Taxation that occurs when at least one of the secondary
elements of double taxation is not common for both impositions
A. Direct double taxation
B. Indirect double taxation
C. Forward double taxation
D. Inverse double taxation
(Banggawan, 2017)
228. It refers to the management of the tax system
A. Tax System
B. Tax Assessment
C. Tax Management
D. Tax Administration
(Banggawan, 2017)
229. Tax administration of the national tax system in the Philippines is entrusted to
A. Bureau of Internal Revenue
B. Bureau of Customs
C. Board of Investments
D. Philippine Economic Zone Authority
(Banggawan, 2017)

230. It is tasked to administer collection of tariffs on imported articles and collection of


the Value Added Tax on importation
A. Bureau of Internal Revenue
B. Bureau of Customs
C. Board of Investments
D. Philippine Economic Zone Authority
(Banggawan, 2017)

231. Which of the following is not an authority vested in the Commissioner of Internal
Revenue?
A. Compromise the payment of internal revenue taxes
B. Cancel or abate tax liability
C. Credit or refund taxes, penalties and internal revenue stamps
D. None of the choices
(RESA Taxation Notes)

232. Who has the sole authority to abate or cancel tax, penalties and/or interest?
A. Commissioner of Internal Revenue
B. Secretary of Finance
C. Secretary of Justice
D. Presiding Justice of the Court of Tax Appeals
(RESA Taxation Notes)

233. The RATS program of the Bureau of Internal Revenue is to eradicate?


A. Underground economy
B. Smugglers
C. Evaders
D. Unregistered taxpayers
(CPAR Tax Preweek, 2017)

234. What taxes are covered by Philippines Tax Treaties?


I.Income Tax
II. Business Tax
III. Transfer Tax
IV. Documentary Stamp Tax
A. Only I
B. Both I and II
C. All three I, II, and III
D. All of the above
(CPAR Tax Preweek, 2017)

235. What is income tax treaty?


A. Is convention or agreement for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on income (and on capital)
B. Is intended to promote international trade and investment in several ways, the
most important of which is by allocating taxing jurisdiction between the
Contracting States so as to eliminate or mitigate double taxation of income
C. Is intended to permit the States to better enforce their domestic laws so as to
reduce evasion
D. Is international agreement between two or more states (contracting states) for
efficient enforcement and beneficial implementation of tax laws
(CPAR Tax Preweek, 2017)

236. Where to file income tax return?


A. Authorized Agent Bank where taxpayer is registered
B. Revenue District Office where taxpayer is registered
C. Local or City treasurer where the taxpayer is domiciled
D. Commissioner of Internal Revenue
(CPAR Tax Preweek, 2017)

237. A tax must be imposed for public purpose. Which of the ff. is not a public
purpose?
A. National defense
B. Public education
C. Improvement of the sugar and coconut industries.
D. Improvement of a subdivision road.
(CPAR Special Handouts, 2016)

238. Which of the following statements is not correct?


A. Tax burdens shall neither be imposed nor presumed to be imposed beyond what
the statute expressly and clearly states because tax statutes should be construed
strictly against the government.
B. Tax exemptions, tax amnesty tax condonations and their equivalent provisions are
not presumed and, when granted are strictly construed against the taxpayer
because such provisions are highly disfavored by the government.
C. Exemptions from taxation are highly disfavored in law and he who claims tax
exemption must be able to justify his claim or right.
D. The House of Representatives has the duty and the exclusive power of
constructing and interpreting tax laws.
(CPAR Special Handouts, 2016)

239. The Bureau of Internal Revenue shall have a chief and four (4) assistant chiefs to
be known as
A. Secretary and Assistant Secretaries
B. Secretary and Undersecretaries
C. Commissioner and Assistant Commissioners
D. Commissioners and Deputy Commissioners
(CPAR Special Handouts, 2016)

240. No person shall be imprisoned for debt or non-payment of poll tax. This is a(an)
A. Inherent limitation
B. Constitutional limitation
C. International limitation
D. Territorial limitation
(CPAR Special Handouts, 2016)

241. Tax administration is a system involving enforcement of taxes through the use of
A. Tax legislation
B. Tax legislation and assessment
C. Tax imposition and collection
D. Tax assessment and collection
(Valencia-Roxas, 2016)

242. A governmental officer considered as tax enforcer by having the power to


ascertain the validity of tax laws subject to the review of the courts of justice
A. Secretary of Justice
B. Secretary of Finance
C. BIR Commissioner
D. Chief Justice
(Valencia-Roxas, 2016)

243. Which of the ff. is not within the scope of authority of the BIR Commissioner?
A. To exercise the levying functions of taxation
B. To interpret tax laws
C. To assess and collect BIR taxes
D. To decide cases involving National Internal Revenue taxes
(Valencia-Roxas, 2016)

244. The following instances allow the BIR Commissioner to inquire or examine the
bank deposits of taxpayers, except
A. To determine the gross estate of the decedent
B. When the taxpayer filed an application for compromise of his tax liability
C. The taxpayer waives his rights in writing the confidentiality of the bank deposits
D. When the taxpayer fails the lifestyle check test and shows unexplained wealth
(Valencia-Roxas, 2016)

245. The BIR is under the supervision of the


A. Department of Budget
B. Bureau of Customs
C. Department of Finance
D. Department of Trade and Industry
(Valencia-Roxas, 2016)
246. Which of the following statements is correct?
A. Levying and collecting of taxes are legislative functions
B. Assessment and collection are administrative functions
C. Enacting if tax laws and its interpretation are legislative functions
D. Levying and impositions are judicial functions
(Valencia-Roxas, 2016)

247. It has the executive supervision and control over tax administration
A. Bureau of Internal Revenue
B. Bureau of Customs
C. Department of Finance
D. Court of Justice
(Valencia-Roxas, 2016)

248. This tax assessment is being asked to be cancelled because there is a question as
to its validity or legality
A. Jeopardy assessment
B. Disputed assessment
C. Illegal assessment
D. Deficiency assessment
(Valencia-Roxas, 2016)

249. Which of the following is True?


I. The Bureau of Internal Revenue functions under the supervision and control of
the Bureau of Treasury.
II. There are two kinds of double taxation: evasion and avoidance.

A. I only
B. II only
C. Both I and II
D. Neither I or II
(Ballada, 2016)

250. Which of the following is True?


I. The Constitution is a source of tax laws
II. Indirect double taxation is unconstitutional

A. I only
B. II only
C. Both I and II
D. Neither I or II
(Ballada, 2016)