Tax True or False

The EFPS is a manual mode of filing tax returns and payment of taxes.

False - 3 days extension if date additional penalty with interest.

The Constitution is the source of the State's taxing power

False - Constitution is not based on taxing power

Taxation is considered as the lifeblood of the government and every government unit must exercise this power.

False - Not for every government, but it is exclusively for legislative.

The BIR can appeal to the CTA.

The BIR cannot appeal to the CTA.

A dividend is entirely earned within if a resident corporation declaring dividend has three-year gross income within exceeding 50% before the declaration of dividend.

True

Declared dividends not yet received by the stockholders are taxable income.

True

In installment method, the excess of mortgage assumed over cost of property sold is considered as part of the initial payment.

True

In installment sale, if the initial payment exceeds 25% of the selling price, the transaction is considered cash sales

True

Once a taxpayer is served with a LA originating from National Office, he should first verify or check with the BIR's National Office whether he is listed or not for National Office audit.

True

Passive income is subject to normal tax only if not subjected to final tax.

True

Properties and labor are paralleled to trees while income are fruits.

True

Protection is the basic consideration that justify tax situs

True

Tax assessment must be in writing containing the law and facts as the basis of assessment

True

Taxation is inseparable in the existence of a nation

True

Taxation is the government's legitimate means of interfering with the private properties of its subjects.

True

Taxes may be exercised to encourage economic growth by granting tax exemptions

True

The cancellation of taxpayers' indebtedness is an income unless such cancellation is intended as a gift

True

The deferred payment method adopts the present value of reporting income.

True

The income distribution of foreign corporation which is doing less than 50% of its business within is considered as partly earned within and partly earned outside the Philippines by the recipient of such income distribution.

True

The option for reporting farming income on cash or accrual basis pertains only to those farm products that were raised or produced in farming activities.

True

The peso equivalent of foreign currency as payment for compensation is considered as the value of reportable income.

True

The state can enforce contributions upon its citizens in the form of taxes even without a constitutional provision authorizing it.

True

The tax situs for occupation is the place where occupation is pursued even if the criterion for nationality is given.

True

Sales invoice or official receipts are not required to be issued if the value of merchandise sold or service rendered is P25.00 but not exceeding P100

False

The estate must secure its own TIN, as a taxpayer separate from its owner.

False

A tax may be levied for the support of religious activities as long as all churches benefit from it.

False

After one year from the date of sale of real property under levy, the delinquent may be redeem the property sold.

False

All revenues and assets of a non-stock, nonprofit educational institutions used directly or indirectly for educational purposes shall be exempt from taxes and duties.

False

Baptismal fees paid to religious officers are not subjected to income tax because of the separation of church and state.

False

Cash-settlement option warrants the holder to purchase shares of stock of the grantor corporation.

False

Criminal tax violations filed in courts may be compromised.

False

If debt is cancelled due to services rendered by the debtor, the basis of tax is the value of service rendered.

False

If the option is exercised by a managerial employee, the book value of the option is subject to fringe benefit tax

False

Service business which is required to be reporting income using cash basis can claimed deduction of related expenses determined using accrual basis.

False

Tax assessment is an action of actual tax collection

False

The 14th month pay is included in the P82,000 nontaxable 13th month pay and other benefits

False

The benefits from taxation have to be experienced to justify the legitimacy of collection of taxes from the people.

False

The estate of the decedent person shall continue to use TIN of the decedent

False

The grant of stock option for a price is subject to capital gains tax of 5% to 10% based on the capital gains.

False

The informer's reward is subject to a 10% creditable withholding tax.

False

The networth method is commonly used in determining the taxable income of taxpayers with complete accounting records.

False

The transfer of business place during the year will require registration and additional registration fee.

False

Transportation allowance pre-computed on a daily basis is not subject to substantiation but subject to tax.

False

Unrealized gain on trading securities reported in the profit-and-loss statement is a taxable income.

False

The perspective period for collection of tax shall be made within three (3) years from the time the final assessment was released.

False - 5 years from the time the final assessment was released

Taxation could be described as power, as a process or as a means. As a power, taxation is a way of apportioning the cost of government among those who are privileged to enjoy its benefits.

False - As a means

In general, bills need to be signed by the President to become a law.

False - Congress/Senate and then to the President

The existence of a Constitution is a necessary for the exercise of the inherent powers of the Sovereign State.

False - Constitution's existence is unnecessary.

Either calendar or fiscal period consists of twelve (12) months which starts from January to December of the taxable year.

False - Fiscal year consists of 12 months but doesn't start with January nor ends with December.

No law granting any tax exemption shall be passed without the concurrence of two-thirds of the members of the Congress.

False - Majority of the members

Taxation is the primary source of government revenue. Hence all government funds come from taxes.

False - Not all government funds comes from taxes

All Filipino citizens are subject to income tax on income derived within and outside the Philippines.

False - Specific Filipino citizens

All government entities regardless of their functions are exempted from taxes because it would be impractical for their government to be taxing itself

False - depends on its status and if accepted by the law.

Local tax ordinances must be uniformly and equally applied throughout the country.

False - different taxes on different places or regions

The required initial bond for manufacturers and importers of articles subject to excise tax is P200,000

False - excise tax is P100,000.

The Philippines has an average income tax rate in the entire ASEAN region.

False - highest income tax rate.

All taxpayers should acquire one TIN and pay a registration fee of P500

False - not all are requested to pay a registration fee of P500

The income of a decedent person in the year of death, earned from hiss properties before and after his death, are reportable income of his estate.

False - only AFTER

Taxes collected by the BIR are local taxes.

False - should be a National Taxes

There is direct double taxation by taxing corporate income and corporate stockholders' dividends from the same corporation

False - subject numbers, always starts with 0000

The final decision made by the CTA can be appealed to the Supreme Court within 30 days.

False - within 15 days

Cost of living allowance is not part of taxable compensation income because the amount is very minimal.

False -Cost of living IS part of taxable compensation.

A tax evader sidesteps the law, while the tax avoider breaks it.

False, Tax evader breaks it, and Tax avoider sidesteps the law.

A peddler should register his business and keep the certificate of payment to be presented upon demand by any internal revenue officer.

True

Among the executive officials of the government, only the CIR has the power to interpret the provisions of NIRC and the other tax laws.

True

Any amount of separation pay received by an employee for any cause beyond his control is tax-exempt.

True

Any internal revenue tax, which has been assessed within the prescribed limitation period, may be collected by distraint or levy, or by proceeding in the court within five (5) years following the assessment of tax.

True

Appropriation of taxes is considered valid if intended for the common good of the people without identifying a particular person to be benefited from it.

True

Corporations compromising individual taxpayers are not allowed deduct personal exemptions.

True

Delinquent accounts may be compromised, however withholding tax cases, in general, are not subject to compromise.

True

Foreign corporation which is doing less than 50% of its business within is considered more than 50% of its business without is considered as resident foreign corporation.

True

Gross income includes all income from whatever sources whether legal or illegal source.

True

If the taxpayer has no accounting records or the other documents, the tax assessment is based on the best evidence obtainable.

True

In general, all other passive income not subjected to final tax should be taxed using the ordinary tax.

True

In tax capitalization, the buyer absorbs the payment of tax and includes the same as part of the cost of the acquired property.

True

In tax condonation, the government has the option to restore what has already been taken from the taxpayer.

True

Incomes derived from unlawful activities are taxable income.

True

Jeopardy assessment requires no tax audit and shortens the taxpayer's period.

True

Normal taxes are usually subject to creditable withholding tax at source.

True

Real estate tax and income tax collected on the same real estate property is not a form of double taxation.

True

Revenues derived from taxes cannot be used for exclusive use of private persons.

True

Sale of ordinary asset personal property by installment is reportable as cash basis if the initial payment exceeds 52% of the selling price.

True

Sovereign quality dictates that a nation cannot impose taxes on the property of another country.

True

Tax administration involves legislation and collection of taxes.

True

Taxes may be used as a tool and weapon in international relations and to protect trade relations.

True

The BIR has the burden to prove that the taxpayer concerned has received the tax assessment.

True

The Constitution grants autonomous regions certain legislative powers which shall include legislative power over taxation.

True

The National Government is allowed to purchase the property under distraint of the amount of bid is substantially lower than the actual cost of the said property.

True

The Pari Materia Doctrine requires the tax laws should be interpreted with reference to other legislation and their effect as a whole may be given consideration.

True

The State can still exercise its taxing power over its citizens, even if he resides outside the taxing State's territory.

True

The amount of taxes may be increased to curve spending power and minimize inflation.

True

The levy may be repeated until the full amount due, including all expenses, is collected.

True

The liability of final income taxes withheld at source rests primarily the payor withholding agent.

True

The main difference on the amount of income reported under cash and accrual basis of reporting farming income is the change in peso value of inventories.

True

The thirteenth month pay and other benefits amounting P82,000 and below are not subject to income tax.

True

The transfer of registration requires no additional fee to be paid by the taxpayer.

True

The transfer of stock option for gratuitous is subject to donor's tax based on the fair market value of option at the time of transfer

True

There is compensation income realized by an employee when his employer cancelled the employee's indebtedness in lieu of wages payable to him.

True

Under the crop basis, the entire cost of producing the crop is deductible only from gross income in the year in which the crop was realized.

True

Under the employee stock option plan, the difference between the fair market value at grant of option and the option price is compensation income of the beneficiary.

True

When a minimum wage earner also derives income from self-employment, his minimum wage earned becomes taxable.

True

If the taxpayer is an individual, his taxable income shall be computed on the basis of calendar year

True.