1) The effective tax rate, in general, provides a better depiction of a taxpayer's tax burden than the average tax

rate. a. True b. False 2) Which of the following is not an example of a graduated tax rate structure? a. Progressive tax rate structure b. Proportional tax rate structure c. U.S. Federal Income Tax d. Regressive tax rate structure e. None of these 3) Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2012, how much federal tax will he owe? a. $15,000.00 b. $12,375.00 c. $11,030.00 d. $9,645.00 e. None of these 4) Geronimo files his tax return as a head of household for year 2012. If his taxable income is $72,000, what is his average tax rate (rounded)? a. 17.56% b. 14.24% c. 19.48% d. 25.00% e. None of these 5) If Susie earns $750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2012? a. $231,639.50 b. $262,500.00 c. $239,261.00 d. $236,435.00 e. None of these 6) The Senate Ways and Means Committee is in charge of drafting tax bills in the U.S. Senate. a. True b. False

7) Corporations are required to file a tax return only if their taxable income is greater than: a. $0. b. $1,000. c. $600. d. $750. e. None of these. Corporations are always required to file a tax return. 8) Greg earned $20,500 this year and had $1,500 of federal income taxes withheld from his salary. Assuming that Greg will have a total tax liability of $1,000 (and thus will receive a $500) refund, he: a. is required to file a tax return. b. is not required to file a tax return but should file a return anyway. c. is required to file a tax return but should not file because he owes no tax. d. is not required to file a tax return and should not file a return. e. None of these. 9) Which of the following has the highest authoritative weight? a. Text book. b. Private letter ruling. c. Revenue ruling. d. Tax service. e. Tax article. 10) Henry filed his 2012 tax return on May 15th, 2013. The statute of limitations for IRS assessment on Henry's 2012 tax return should end: a. May 15th, 2015. b. April 15th, 2015. c. May 15th, 2016. d. April 15th, 2016. e. None of these. 11) In general, tax planners prefer to accelerate deductions. a. True b. False 12) The constructive receipt doctrine a. is particularly restrictive for accrual basis taxpayers b. causes income to be recognized before it is actually received c. causes income to be recognized after it is actually received d. applies equally to income and expenses e. None of these

13) If Rudy has a 25% tax rate and a 6% after-tax rate of return, a $30,000 tax deduction in four years will save how much tax in today's dollars (rounded)? a. $30,000 b. $7,500 c. $28,290 d. $5,940 e. None of these 14) Rolando's employer pays year-end bonuses each year on December 31. Rolando, a cash basis taxpayer, would prefer to not pay tax on his bonus this year. So, he leaves town on December 31, 2011 and doesn't pick up his check until January 2nd, 2012. When should Rolando report his bonus? a. 2012 b. 2011 c. Rolando can choose the year to report the income d. It does not matter e. None of these 15) A taxpayer earning income in "cash" and not reporting it as taxable income is an example of: a. tax avoidance b. tax evasion c. conversion d. income shifting e. None of these QUIZ 1 ANSWER KEY 1) A - True 2) B - Proportional tax rate structure 3) C - $11,030.00 a. 4,867.50 + .25(60,000 - 35,350) 4) A - 17.56% a. [6,482.5 + ((72,000 - 47,350) x .25)]/72,000 = 17.56% 5) C - $239,261.00 a. 112,683.50 + .35(750,000 - 388,350) = 239,261. 6) B - False 7) D - None of these. Corporations are always required to file a tax return. 8) A - is required to file a tax return. 9) C - Revenue ruling. 10) C - May 15th, 2016 11) A - True 12) B - causes income to be recognized before it is actually received 13) D - $5,940 a. $30,000 x .25 (tax rate) x .792 (Discount Factor, 6%, 4 years) = $5,940.

14) B - 2011 15) B - Tax evasion