Exam 2019, questions and answers PDF

Preview

Summary

Taxation Jeff-Mike Smith V. SuleTax Remedies November 30, 2019, 1:00 PM – 6:00 PMSTRAIGHT PROBLEMS Mr. Al Tang Me, a self-employed individual, dissolved the operation of his business in June of the current taxable year because of his definite plan to work in the US. When does the taxable period end ...

Description

Taxation Tax Remedies

Jeff-Mike Smith V. Sule November 30, 2019, 1:00 PM – 6:00 PM STRAIGHT PROBLEMS

1.

Mr. Al Tang Me, a self-employed individual, dissolved the operation of his business in June of the current taxable year because of his definite plan to work in the US. When does the taxable period end and when he is required to pay taxes, if any?

2.

Mr. Yoso, operations analyst of Mayamanna Co., filed his income tax return for 2019 on March 10, 2020. The tax due and payable on his taxable compensation income was ₱20,000. The tax audit of the BIR revealed that the tax due amounted to ₱55,000. Determine whether the following assessments conducted were valid or not.

3.

4.

5.

During the taxable year, Ms. Chu Tiu informed the BIR about the plan of some businessmen to import smuggled goods from China. The entrapment resulted in the seizure of smuggled goods with a fair market value of ₱30M. Compute the reward to be received from the government? During the 2019 taxable year, Mr. Co, a self-employed individual with registered address at Antipolo City, has a tax due and payable of ₱250,000 based on income tax return. Compute the total amount of tax liabilities under the following cases: a.

Case 1: The BIR made the assessment for deficiency tax on November 15, 2022.

The taxpayer filed his income tax return on July 1, 2020.

b.

Case 2: Assume that the income tax return filed was fraudulent and such was discovered by the BIR on July 10, 2020. The assessment was made on February 10, 2023.

The taxpayer filed his return on April 15, 2020 in Quezon City.

c.

The taxpayer filed his return on time, and paid the tax due thereon. An examination revealed that the tax due was erroneously computed. Per assessment made, the correct amount of tax due would be ₱380,000. The notice of demand and tax deficiency assessment were issued on September 1, 2020 to be payable on September 30, 2020.

d.

Assume that per notice of tax deficiency assessment on item C, the taxpayer did not pay the total amount still due on September 30, 2020, but rather paid the tax liabilities on November 30, 2020.

e.

Assume that the taxpayer deliberately did not file his income tax return on April 15, 2020. His attention was called by the BIR through formal notice and demands to file his return. He filed his return on January 31, 2021.

Ms. Fruity Stante, a self-employed individual, filed his income tax return for 2019 on April 15, 2020 with income tax due and payable amounting to ₱60,000. She received a deficiency tax assessment for ₱105,000 on June 20, 2021. The taxpayer requested for reevaluation and reconsideration and filed his protest with the BIR Commissioner on July 10, 2021. The BIR Commissioner denied the request for reconsideration, and the taxpayer received the decision on January 5, 2022. She appealed the BIR Commissioner’s decision to the CTA on February 10, 2022. a.

Was the filing of protest on assessment valid?

b.

Was the filing of the appeal within the prescribed period?

MULTIPLE CHOICE QUESTIONS (THEORY) 1.

c. Only first statement is true.

Statement 1: Levying and assessment of tax are purely legislative in character. Statement 2: The basic procedures in tax administration are tax assessment and tax collection.

d. Only second statement is true. 4.

a. Both statements are true. b. Both statements are false.

Statement 1: Tax assessment involves the process of enforcing or demanding payment of tax.

c. Only first statement is true.

Statement 2: Tax assessment is normally undertaken to determine tax liabilities.

d. Only second statement is true.

a. Both statements are true. b. Both statements are false.

2.

c. Only first statement is true.

Statement 1: The administrative function of taxation refers to the implementation of taxation laws by the various authorized national government agencies. Statement 2: The amount of tax liability does not include surcharges, interest, and penalties in assessment.

d. Only second statement is true. 5.

a. Both statements are true.

Statement 1: Tax assessment is not required when the BIR Commissioner has terminated the tax period.

b. Both statements are false.

Statement 2: The tax period is terminated when a taxpayer is retiring from business subject to tax.

c. Only first statement is true.

a. Both statements are true.

d. Only second statement is true.

b. Both statements are false. c. Only first statement is true.

3.

Statement 1: Tax assessment, in relation to internal revenue taxes, refers to the determination of value of the subject in taxation. Statement 2: The legislative body of the government implements taxation laws. a. Both statements are true. b. Both statements are false.

d. Only second statement is true. 6.

Statement 1: Presently, there are three Deputy Commissioners that administer the BIR. Statement 2: Tax assessment is required when a taxpayer filed a fraudulent return. a. Both statements are true.

1|Page

7.

b. Both statements are false.

b. Both statements are false.

c. Only first statement is true.

c. Only first statement is true.

d. Only second statement is true.

d. Only second statement is true.

Statement 1: The BIR Commissioner has the authority to interpret taxation laws and ordinances.

13.

Statement 2: Tax deficiency implies that the amount of tax paid is more than the amount of tax liabilities.

Statement 1: The taxpayer is given a maximum period of 25 days to contest the tax deficiency assessment upon the receipt of the formal notice of assessment. Statement 2: After the taxpayer has filed his/her protest on the tax assessment deficiency, he/she shall submit all documents supporting his/her protest within a period of 180 days, otherwise, the findings will become final.

a. Both statements are true. b. Both statements are false. c. Only first statement is true.

a. Both statements are true.

d. Only second statement is true.

b. Both statements are false. c. Only first statement is true.

8.

Statement 1: Immediate tax payment is required when a taxpayer conceals purposely his/her property. Statement 2: The BIR Commissioner can delegate final assessment to his/her duly authorized representative.

d. Only second statement is true. 14.

a. Both statements are true. b. Both statements are false.

Statement 1: The taxpayer is given 45 days to file his/her protest in the Court of Appeals on the decision issued by the BIR Commissioner.

c. Only first statement is true.

Statement 2: Collection of taxes is a legislative aspect of taxation that connotes enforcement of tax payment.

d. Only second statement is true.

a. Both statements are true. b. Both statements are false.

9.

Statement 1: Fraud assessment arises from deficiency in taxpayer’s records. Statement 2: Tax deficiency assessment may be made anytime at the discretion of the BIR Commissioner as long as the intention is to enforce payment of tax liabilities.

c. Only first statement is true. d. Only second statement is true. 15.

a. Both statements are true. b. Both statements are false.

Statement 1: The government is only equipped with administrative remedies to collect taxes, surcharges, and other penalties.

c. Only first statement is true.

Statement 2: The two major administrative remedies to enforce tax payment are distraint and levy of property.

d. Only second statement is true.

a. Both statements are true. b. Both statements are false.

10.

c. Only first statement is true.

Statement 1: Tax findings brought about by tax assessment outside the prescribed period are null and void. Statement 2: When an informal conference is called by the BIR, the taxpayer is given 20 days to respond; otherwise, the findings will be forwarded to the Assessment Division of the BIR.

d. Only second statement is true. 16.

Statement 1: The government can administer simultaneously distraint and levy of property to enforce collection. Statement 2: Actual distraint prohibits the owner to use the property.

a. Both statements are true. b. Both statements are false.

a. Both statements are true.

c. Only first statement is true.

b. Both statements are false.

d. Only second statement is true.

c. Only first statement is true. d. Only second statement is true.

11.

Statement 1: The Assessment Division of the BIR issues Preliminary Assessment Notice if informal conference fails. Statement 2: A taxpayer is given a maximum period of 10 days to contest the tax assessment contained in the Preliminary Assessment Notice.

17.

Statement 1: If the amount tax liabilities involved is less than ₱1M, then the distraint of property will be administered by the Deputy Commissioner of the BIR.

b. Both statements are false.

Statement 2: Within 10 days after the sale of the distraint property, the BIR officer making the sale shall prepare a report to be submitted to the Secretary of Finance.

c. Only first statement is true.

a. Both statements are true.

d. Only second statement is true.

b. Both statements are false.

a. Both statements are true.

c. Only first statement is true. 12.

Statement 1: Preliminary Assessment Notice is not required if tax deficiency is due to the amount of tax withheld and the amount remitted by the withholding agent. Statement 2: Tax assessment without due process is nonenforceable.

d. Only second statement is true. 18.

Statement 1: Levy refers to seizure of all properties of the taxpayer both personal and real in the event of tax deficiency.

a. Both statements are true.

2|Page

Statement 2: The BIR undertakes tax assessment only if there is an expected fraudulent return.

a. Both statements are true.

a. Both statements are true.

c. Only first statement is true.

b. Both statements are false.

d. Only second statement is true.

b. Both statements are false.

c. Only first statement is true. d. Only second statement is true. 19.

25.

Statement 1: The term assessment period is the time frame allowed by law to appraise and determine the value of the subject of taxation.

Statement 1: The tax remedy of distraint and levy cannot be administered pending the final decision on tax assessment. Statement 2: The government adopts distraint and levy regardless of the amount of tax liabilities.

Statement 2: Assessment is still considered valid even if it is done within three years after the filing of a correct income tax return.

a. Both statements are true. b. Both statements are false. c. Only first statement is true.

a. Both statements are true.

d. Only second statement is true.

b. Both statements are false. c. Only first statement is true.

20.

d. Only second statement is true.

26.

Statement 1: The Commissioner of Customs or his/her subordinates may be deputized as collection agent of the national internal revenue taxes on imported duties.

Statement 1: The conduct of pre-assessment is on a caseto-case basis.

Statement 2: The taxpayer has 60 days to submit all supporting papers after filing the administrative protest.

Statement 2: The sale of levied property is null and void if the date of the sale is different from the date set in the notice of advertisement.

a. Both statements are true. b. Both statements are false. c. Only first statement is true.

a. Both statements are true.

d. Only second statement is true.

b. Both statements are false. c. Only first statement is true.

27.

d. Only second statement is true. 21.

Statement 1: The taxpayer has 30 days to appeal to the CTA after the lapse of the 180-day period that the BIR did not act on documents submitted.

Statement 1: The assessment should be done within five years in case no tax return is filed in order to become valid and enforceable. Statement 2: Taxpayers have tax remedies on assessment and erroneous payment of tax liabilities.

Statement 2: The unfavorable decision handed down by the CTA is protested by filing an appeal directly to the Supreme Court.

a. Both statements are true.

c. Only first statement is true.

b. Both statements are false.

d. Only second statement is true.

a. Both statements are true. b. Both statements are false.

c. Only first statement is true. d. Only second statement is true. 22.

28.

Statement 1: Late filing of tax return is subject to 25% surcharge and 20% interest. Statement 2: The notice of pre-assessment is no longer necessary if deficiency is due to mathematical error.

Statement 2: The taxpayer may protest all the issues involved in the formal notice of assessment or only some of the issues in the assessment.

a. Both statements are true.

a. Both statements are true. b. Both statements are false.

b. Both statements are false.

c. Only first statement is true.

c. Only first statement is true.

d. Only second statement is true.

d. Only second statement is true. 23.

Statement 1: The BIR Commissioner has the power to interpret tax laws, and to summon, examine, and take testimony of a person.

Statement 1: The government is left hopeless in case the taxpayer does not have money to pay the tax liabilities.

29.

Statement 2: A tax refund check or warrant not encashed within two years from the date of delivery shall be forfeited in favor of the government. a. Both statements are true. b. Both statements are false.

Statement 1: The government may not act on disputed issues when the taxpayer failed to pay the deficiency tax on undisputed issues. Statement 2: The taxpayer may appeal to the Supreme Court when his/her protest with the BIR Commissioner had been denied. a. Both statements are true.

c. Only first statement is true.

b. Both statements are false.

d. Only second statement is true.

c. Only first statement is true. d. Only second statement is true.

24.

Statement 1: Distraint is a tax remedy available to the government that seizes real properties of the taxpayer. Statement 2: The Revenue District Officer executes distraint if the amount of tax liabilities is more than ₱1M.

30.

Statement 1: Collection of taxes ordinarily involves judicial proceedings.

3|Page

Statement 2: Collection of taxes denotes enforcement of tax payments.

b. Both statements are false.

a. Both statements are true.

d. Only second statement is true.

c. Only first statement is true.

b. Both statements are false. c. Only first statement is true.

37.

d. Only second statement is true. 31.

Statement 2: The BIR officer may purchase distraint goods if the bid price is lower than the total tax claims.

Statement 1: Intangible properties like stocks and credits are not subject to distraint since physical transfer on them is not possible.

a. Both statements are true. b. Both statements are false.

Statement 2: The notice of levy can be issued only after the issuance of the notice of distraint.

c. Only first statement is true. d. Only second statement is true.

a. Both statements are true. b. Both statements are false.

38.

c. Only first statement is true. d. Only second statement is true. 32.

Statement 1: The notice of levy should be formal and be issued only during the levy of the property.

Statement 1: Distraint of personal properties is implemented by the police if the amount is less than ₱1M. Statement 2: If the amount is more than ₱1M, distraint of personal property is administered by the Revenue District Officer.

Statement 1: Levy or distraint can be administered if the amount of tax liabilities is more than ₱100,000.

a. Both statements are true.

Statement 2: Entering into a tax compromise is legal.

b. Both statements are false.

a. Both statements are true.

c. Only first statement is true.

b. Both statements are false.

d. Only second statement is true.

c. Only first statement is true. d. Only second statement is true. 33.

39.

Statement 1: The BIR is the principal office of the national government responsible for the administration and supervision of matters and issues related to taxation.

Statement 1: Tax assessment is not necessary when the BIR Commissioner terminates the tax period. Statement 2: Tax assessment is not required when tax deficiency has been discovered because of failure to file a return or a fraudulent return has been filed.

Statement 2: The books of accounts of the taxpayers are normally examined and inspected once a year.

a. Both statements are true.

a. Both statements are true.

b. Both statements are false.

b. Both statements are false.

c. Only first statement is true.

c. Only first statement is true.

d. Only second statement is true.

d. Only second statement is true. 40. 34.

35.

Statement 1: When quarterly sales, receipts or earnings of the business do not exceed ₱25,000, the taxpayer is required to keep a simplified set of bookkeeping records.

Statement 1: Deficiency assessment is the result of examination, inspection, and investigation by a revenue officer on the records of the taxpayer where deficiency has been determined.

Statement 2: The government imposes an 80% surcharge based on the amount due when there is a willful neglect in filing the return.

Statement 2: Notice of tax deficiency assessment can either be in writing or oral, provided the taxpayer has been duly informed.

a. Both statements are true.

a. Both statements are true.

b. Both statements are false.

b. Both statements are false.

c. Only first statement is true.

c. Only first statement is true.

d. Only second statement is true.

d. Only second statement is true.

Statement 1: Tax compromise is not allowed anymore when the tax case has already been filed in court.

41.

Statement 2: Forfeiture of property is tantamount to transfer of ownership of the property in favor of the government.

Statement 2: The formal notice of assessment may be sent by registered mail or by personal delivery.

a. Both statements are true.

a...