Polytechnic University of the Philippines

College of Accountancy & Finance

TAXATION
1ST EVALUATION EXAMINATION
1st Semester, Academic Year 2015 – 2016

INSTRUCTION: On the scannable form, shade the letter of the best answer. If the answer is not among
the choices, shade “E”.

1. Where may a large taxpayer pay his/its income tax?

a. DBP or LBP branch located at the BIR National Office.
b. Large Taxpayers Division, BIR National Office.
c. Development Bank of the Philippines (DBP).
d. Land Bank of the Philippines (LBP).
e. All of the above.

2. Who is not required to file income tax return?

a. individual deriving compensation concurrently from two or more employers at any time during
the taxable year.
b. individual receiving a combination of compensation and business income (mixed income).
c. employee whose total compensation income, regardless of the amount, the income tax of which
has not been withheld correctly.
d. all of the above.
e. none of the above.

3. The following are the criteria to be a large taxpayer. Which is not?

a. Any taxpayer with annual withholding tax payment/remittance of all kind of withholding taxes
of at least ₱1,000,000.
b. Any taxpayer with total annual gross sales/receipts of at least ₱1,000,000,000.
c. Any taxpayer with a total net worth of at least ₱300,000,000 at the close of each calendar or fiscal
year.
d. all of the above.
e. none of the above.

4. Persons liable to any internal revenue tax may pay his tax under the following modes. Which mode
is not acceptable?
a. over-the-counter cash transaction
b. bank debit system
c. credit facility with a bank, credit company or similar institution
d. personal, company, cashier’s or manager’s check.
e. none of the above.

5. Who among the following individuals are exempt from filing their income tax return?
a. an individual whose gross income tax does not exceed his total personal and additional
exemptions for dependents, except a citizen of the Philippines and an alien individual engaged in
business or practice of profession in the Philippines.
b. an individual whose sole income has been subjected to final withholding tax.
c. an individual who is exempt from income tax.
d. all of the above.
e. none of the above.

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 6. The pay as you file system does not apply when
a. tax is withheld at source. d. all of the above.
b. there is deficiency assessment. e. none of the above.
c. tax period is terminated.

7. Generally, the following individuals are required to file an income tax return. Who is not?
a. every nonresident alien engaged in trade or business or in the exercise of profession in the
Philippines.
b. every Filipino citizen residing outside the Philippines, on his income from sources within the
Philippines.
c. every alien residing in the Philippines on income derived from sources within the Philippines.
d. all of the above.
e. none of the above.

8. Which of the following is a civil remedy for the collection of internal revenue taxes, fees or charges, and
any increment thereto resulting from delinquency?
a. distraint of goods, chattels, or effects, and other personal property of whatever character.
b. by civil or criminal action.
c. either of these remedies.
d. all of the above.
e. both a and b simultaneously.

9. To safeguard the interest of the government, the Commissioner may place under constructive distraint
the property of a delinquent taxpayer or any taxpayer who, in his opinion, is
a. retiring from any business subject to tax.
b. intending to leave the Philippines or to remove his property therefrom.
c. intending to hide or conceal his property or to perform any act tending to obstruct the proceedings
for collecting the tax due or which may be due from him.
d. all of the above.
e. none of the above.

10. Date of tax erroneously paid – June 10, 2013

Date of claim for refund was filed with BIR – March 2015
Date of BIR decision of denial was received – April 5, 2015.
Last day to appeal to the Court of Tax Appeals
a. May 5, 2015. c. June 10, 2015.
b. June 8, 2015. d. March 3, 2016.
.
11. The following are administrative remedies available to a taxpayer in connection with collection of taxes,
except one:
a. filing of claim for tax refund or credit.
b. filing of criminal complaint against erring BIR officials or employees.
c. filing a petition for reconsideration or reinvestigation.
d. entering into a compromise.

12. The distinction between actual and constructive distraint is that

a. actual distraint may be made on the property of any taxpayer whether delinquent or not while
constructive distraint is made on the property only of a delinquent taxpayer.
b. actual distraint is effected by requiring the taxpayer to sign a receipt of the property or by the revenue
officer preparing and leaving a list of the property distrained or by service of a warrant of distraint
or garnishment.
c. in actual distraint, there is a taking of possession, while in constructive distraint, the taxpayer is
merely prohibited from disposing of the property
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 d. answer is not given.

13. Where a return was filed, as a general rule, the prescriptive period for assessment after the date the return
was due or was filed, whichever is later is within
a. five years. b. ten years. c. three years. d. answer is not given.

14. Where any national internal revenue tax is alleged to have been erroneously or illegally collected, the
taxpayer should first
a. file an action for refund with the Regional Trial Court.
b. file a claim for refund or credit.
c. file an action for refund with the Court of Tax Appeals.
d. answer not given.

15. An information was filed in court for willful nonpayment of income tax the assessment of which has
become final. The accused, through counsel, presented a motion that he be allowed to compromise his
tax liability subject of the information. Which is not correct?
a. the Tax Code lodges the conduct of criminal actions to a legal officer of the BIR.
b. the prosecutor may conform to the motion because even if the criminal violation had been filed in
court, the same may still be compromised.
c. the payment of tax due after apprehension is not a valid defense in any prosecution for violation of
any provision of the Tax Code.
d. the prosecutor must be a legal officer of the BIR

16. Taxpayer-withholding agent applies with the BIR for the compromise of withholding taxes it had
withheld at source because its financial position demonstrates a clear inability to pay the assessed tax.
Should the compromise prosper?
a. the compromise should prosper because the reason is valid.
b. the compromise should prosper because taxpayer is not under obligation to remit tax withheld to
BIR.
c. the compromise should not prosper because the taxpayer merely holds the tax withheld in trust for
the government.
d. the compromise should not prosper because the inability to pay should be proved first.

17. On January 15, 2015, a taxpayer received an assessment for an internal revenue tax deficiency. On
February 10, 2015, the taxpayer forthwith filed a petition for review with the Court of Tax Appeals.
Could the Tax Court entertain the petition?
a. Yes, the Tax Court can entertain the petition because it was filed from date of receipt of the
assessement.
b. No, an assessment by the BIR is not the Commissioner’s decision from which a petition for review
may be filed with the Court of Tax Appeals.
c. Yes, the taxpayer can avail of the judicial remedy even if he has not exhausted the administrative
remedies.
d. No, the taxpayer has to wait for 30 days before the Tax Court could entertain his petition.

18. The following are national internal revenue taxes. Which one is not?
a. excise tax. b. import duty. c. documentary stamp tax. d. VAT.

19. One of the characteristics of internal revenue laws is that they are
a. generally prospective in application. c. penal in nature.
b. criminal in nature. d. political in nature.

20. Which statement is false? Income tax

a. is always based on gross amount.
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 b. is a tax on all yearly profits arising from property, profession, trade or business.
c. is a tax on person’s income, emoluments or profits.
d. is always a direct tax.

21. Percentage tax is an example of

a. graduated tax. b. proportional tax. c. progressive tax. d. regressive tax.

22. As to object, taxes may be classified according to the following except

a. personal. b. property. c. excise. d. specific.

23. The following are sources of tax laws. Which is not a source?
a. Barangay resolutions. c. Revenue Regulations by the Department of Finance.
b. Supreme Court decisions. d. Treaties or international agreements.

24. Provincial, city, municipal and barangay ordinances may impose taxes subject to limitations by the Local
Government Code except
a. professional tax. b. community tax. c. travel tax. d. real property tax.

25. The BIR shall have ____ Deputy Commissioners.

a. two. b. four. c. five. d. six.

26. In case of conflict between tax laws and GAAP

a. both tax laws and GAAP shall be enforced.
b. GAAP shall prevail over tax laws.
c. the issue shall be resolve by the courts.
d. tax laws shall prevail over GAAP.

27. The following are authorized to administer oaths and take testimony. Who is not?
a. BIR Commissioner. c. BIR service chief.
b. BIR Deputy Commissioner. d. BIR Rank-and-File Employee.

28. The distinction of a tax from permit or license is that a tax

a. imposed for regulation.
b. one which involves an exercise of police power.
c. one in which there is generally no limit on the amount that may be imposed.
d. none of the above.

29. Which is not a valid definition of income?

a. income is a fund at one distinct point of time.
b. income is the return from capital invested.
c. income means all wealth which flows into the taxpayer other than a mere return of capital.
d. income means cash or its equivalent unless otherwise specified.

30. Tax as distinguished from license fee

a. a regulatory measure.
b. imposed in the exercise of police power.
c. nonpayment does not necessarily render the business illegal.
d. limited to cover the cost of regulation.

31. Taxation is a means by which the national government attempts to

a. shift wealth from the rich to the poor. c. encourage full employment.
b. maintain price stability. d. all of the above

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32. The following statements are correct except
a. the provisions of taxation in the Philippine Constitution are grants of power.
b. taxes may be imposed to raise revenues or to provide disincentives to certain activities within the
State.
c. the State can have the power of taxation even if the Constitution does not expressly give it the power
to tax.
d. for the exercise of the power of taxation, the State can tax anything at any time.

33. One of the following is not among the basic principles of a sound tax system
a. fiscal adequacy. c. collection of tax.
b. theoretical justice. d. administrative feasibility.

34. The following are inherent limitations of taxation except

a. taxes may be levied only for public purpose.
b. the State may tax persons and properties under its jurisdiction.
c. the property of another State may not be taxed by other States.
d. governmental agencies are exempt from taxation.

35. Which statement refers to police power as distinguished from taxation?

a. it can only be imposed on specific property or properties.
b. it involves the taking of property by the government.
c. the amount imposed depends on whether the activity is useful or not.
d. the amount imposed has no limit.

36. One characteristic of a tax is that

a. it is generally based on contract. c. it is generally assignable.
b. it is generally payable in money. d. none of the above.

37. Which one is not an example of excise tax?

a. real property tax. c. VAT.
b. transfer tax. d. income tax.

38. All of the following are similarities of the inherent powers of the State except
a. necessary attributes of sovereignty. c. interfere with private rights and property.
b. affect all persons or the public. d. are legislative in implementation.

39. It is a tax of a fixed proportion of the value of the property with respect to which the tax is assessed and
requires the intervention of assessors or appraisers to estimate the value of such property
a. specific. b. special. c. ad valorem. d. excise.

40. When the BIR and taxpayers are unable to agree as to the correct application of tax statutes to specific
situations,
a. BIR decision prevails. c. court decision prevails.
b. taxpayer’s decision prevails. d. none of the above.

41. Which is not true about the situs of taxation

a. citizenship is not a factor to consider. c. subject matter is a must to determine situs.
b. situs of persons is the taxpayer’s residence. d. none of the above.

42. Which is not a nature of taxation?

a. it is a means by which the government raise income.
b. the government solely benefits from it.
c. it is inherent in sovereignty.
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 d. the citizenry benefits from it.

43. It is the proportional contribution by persons and property levied by the law-making body of the State
by virtue of its sovereignty for the support of the government and all public needs.
a. license fees. b. special assessment. c. tax. d. none of the above.

44. Tax exemption may come from which of the following?

a. contract. b. Constitution. c. law. d. all of the above.

45. Which is true with tax amnesty?

a. it is unconditional
b. covers both criminal and civil liability of the taxpayer
c. it generally applies for past and future noncompliance.
d. all of these.

46. BIR is under the direct supervision of

a. Bureau of Customs. b. the President. c. Dept. of Finance. d. Congress

47. The amount imposed is based on the value of property?

a. Eminent Domain. b. license. c. toll. d. special assessment

48. Debt as compared to tax

a. demand of ownership. c. will not cause imprisonment if not paid.
b. not assignable. d. generally payable in money.

49. Intended to regulate conduct

a. penalty. c. police power.
b. license. . d. toll.

50. A tax that cannot be avoided

a. direct. c. specific tax.
b. indirect. . d. personal.

1 E 16 C 31 D 46 C
2 E 17 B 32 A 47 C
3 D 18 B 33 C 48 C
4 D 19 A 34 D 49 B
5 D 20 A 35 C 50 D

6 D 21 B 36 B
7 E 22 D 37 A
8 A 23 A 38 B
9 D 24 C 39 C
10 A 25 D 40 C

11 B 26 D 41 A
12 C 27 D 42 B
13 C 28 C 43 C
14 B 29 D 44 D
15 B 30 C 45 B

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