Untitled Deck Flashcards
(100 cards)
1
Q
What are Ad Valorem Taxes?
A
Taxes based on the value of the property or goods (e.g., property taxes or sales taxes).
2
Q
What is the Average Tax Rate?
A
The total tax paid divided by total taxable income; measures a taxpayer’s overall tax burden.
3
Q
What are Brackets in taxation?
A
Income ranges in a progressive tax system, where each range is taxed at a different rate.
4
Q
What does Certainty mean in tax principles?
A
A tax principle stating taxpayers should clearly understand when, where, and how to pay taxes.
5
Q
What does Convenience mean in tax principles?
A
A tax principle stating taxes should be collected in a manner that is convenient for taxpayers.
6
Q
What is Dynamic Forecasting?
A
A method of predicting tax revenue changes that accounts for taxpayer behavior in response to tax law changes.
7
Q
What is an Earmarked Tax?
A
Taxes designated for specific purposes (e.g., gasoline taxes used for road maintenance).
8
Q
What does Economy mean in tax principles?
A
A tax principle focused on minimizing compliance and administrative costs relative to tax revenue.
9
Q
What is the Effective Tax Rate?
A
The total tax liability divided by total income (taxable and non-taxable), reflecting the overall tax burden.
10
Q
What are Employment Taxes?
A
Taxes paid by employers and employees based on wages, including Social Security and Medicare taxes.
11
Q
What is Equity in taxation?
A
A principle that taxes should be fair, with individuals in similar situations taxed similarly (horizontal equity) and those with greater ability to pay taxed more (vertical equity).
12
Q
What is an Estate Tax?
A
A tax imposed on the transfer of property upon death.
13
Q
What are Excise Taxes?
A
Taxes on specific goods or services, such as alcohol, tobacco, or gasoline.
14
Q
What are Explicit Taxes?
A
Taxes that are directly paid to the government, such as income or property taxes.
15
Q
What is a Flat Tax?
A
A tax system with a single constant rate applied to all taxable income.
16
Q
What is a Gift Tax?
A
A tax on the transfer of property by one individual to another without receiving full value in return.
17
Q
What are Graduated Taxes?
A
Taxes with rates that increase as the taxable base (income or value) increases.
18
Q
What is Horizontal Equity?
A
A principle that taxpayers with similar financial situations should pay the same amount in taxes.
19
Q
What are Implicit Taxes?
A
Indirect taxes resulting from tax-favored assets having lower returns due to tax benefits (e.g., municipal bonds).
20
Q
What is the Income Effect?
A
The change in an individual’s economic behavior due to changes in taxable income from tax adjustments.
21
Q
What is Income Tax?
A
A tax on an individual’s or entity’s income.
22
Q
What is a Local Tax?
A
Taxes imposed by local governments, such as property taxes or city income taxes.
23
Q
What is the Marginal Tax Rate?
A
The rate at which the last dollar of taxable income is taxed; used to measure the impact of tax changes.
24
Q
What is the Medicare Tax?
A
A federal tax that helps fund the Medicare program, which provides health insurance to people 65 and older.
25
What is a Personal Property Tax?
A tax on movable property, such as cars, boats, and business equipment, rather than real estate.
26
What is a Progressive Tax Rate Structure?
A tax system where the tax rate increases as the taxpayer’s income increases.
27
What is a Proportional Tax Rate Structure?
A tax system where everyone pays the same percentage of their income, regardless of how much they earn (also called a flat tax).
28
What is a Real Property Tax?
A tax on real estate, typically based on the value of the property (land and buildings).
29
What is a Regressive Tax Rate Structure?
A tax system where lower-income individuals pay a higher percentage of their income in taxes compared to higher-income individuals (e.g., sales tax).
30
What is a Sales Tax?
A tax imposed on goods and services at the time of purchase, usually as a percentage of the price.
31
What is a Self-Employment Tax?
A tax levied on individuals who work for themselves to fund Social Security and Medicare.
32
What are Sin Taxes?
Taxes imposed on goods that are considered harmful or undesirable, such as tobacco, alcohol, and gambling.
33
What is a Social Security Tax?
A payroll tax that funds the Social Security program, providing retirement, disability, and survivors benefits.
34
What is a State Tax?
Taxes imposed by state governments on income, property, sales, or other economic activities.
35
What is Static Forecasting?
A method of predicting tax revenues or the effects of tax changes assuming no behavioral changes occur in response to those changes.
36
What is the Substitution Effect?
The economic concept where individuals or businesses will substitute one product or activity for another due to changes in prices or taxes.
37
What does Sufficiency mean in taxation?
The concept in taxation that the tax system should generate enough revenue to fund government services and obligations.
38
What is a Tax Base?
The total amount of income, property, or other taxable assets that are subject to taxation.
39
What is a Tax Rate?
The percentage at which income or value is taxed.
40
What are Transfer Taxes?
Taxes on the transfer of wealth, typically through gifts or estates (e.g., estate tax).
41
What is an Unemployment Tax?
A tax levied on employers to fund unemployment insurance for workers who have lost their jobs.
42
What is a Use Tax?
A tax applied to goods purchased outside of a certain jurisdiction (like a state) and brought in for use within that jurisdiction.
43
What is a Value-Added Tax (VAT)?
A consumption tax placed on a product at each stage of production or distribution, based on the value added at that stage.
44
What is Vertical Equity?
The principle that taxpayers with greater ability to pay taxes should pay more taxes (often associated with progressive tax systems).
45
What is a 30-Day Letter?
A formal notice issued by the IRS to a taxpayer after an audit, informing them that they owe additional taxes, penalties, or interest. The taxpayer has 30 days to respond or appeal.
46
What is a 90-Day Letter?
A formal notice issued by the IRS after a 30-day letter if the taxpayer has not responded or resolved the issue. It gives the taxpayer 90 days to pay or appeal before the IRS takes further action.
47
What does acquiescence mean in tax law?
When the IRS agrees with a court’s decision, and the IRS will follow it in future cases, though it does not mean they necessarily agree with the decision.
48
What are Actions on Decisions?
Refers to the IRS’s official stance on judicial decisions and whether it will follow the court's ruling in future cases.
49
What are Annotated Tax Services?
Published collections of tax law with detailed explanations, references, and interpretations, used for understanding how the IRS has applied tax rules in practice.
50
What is Circular 230?
A publication by the U.S. Department of the Treasury that provides rules governing practice before the IRS for tax professionals, including guidelines on ethical standards and conduct.
51
What is a Citator?
A tool used to find prior decisions or IRS rulings that may be relevant to a specific tax issue or legal question.
52
What are Civil Penalties?
Penalties imposed by the IRS for violations of tax laws that are not criminal in nature, such as failure to file a return or negligence.
53
What is a Correspondence Examination?
A tax audit conducted by mail, where the IRS sends the taxpayer questions or requests for additional information rather than holding an in-person meeting.
54
What are Criminal Penalties?
Penalties for violating tax laws that involve illegal conduct, such as tax fraud or evasion, and can include fines or imprisonment.
55
What are Determination Letters?
Letters issued by the IRS that provide a ruling on specific tax issues or the tax-exempt status of an organization.
56
What is the DIF (Discriminant Function) System?
A computer program used by the IRS to select tax returns for audit by assigning scores based on statistical data, indicating the likelihood of non-compliance.
57
What is the Document Perfection Program?
A process used by the IRS to identify and correct errors in tax returns before further processing.
58
What are Field Examinations?
A type of IRS audit where the examiner visits the taxpayer's place of business to inspect records and conduct a more thorough review of financial activities.
59
What are Final Regulations?
Official IRS regulations that provide interpretations of the tax laws and are legally binding after being issued in final form.
60
What is the Golsen Rule?
A principle that the IRS will follow a court decision in the jurisdiction where the decision was made, even if it conflicts with decisions from other jurisdictions.
61
What is the Information Matching Program?
A process used by the IRS to match information reported on tax returns with data provided by third parties, such as employers or financial institutions, to detect discrepancies.
62
What is the Internal Revenue Code of 1986?
The primary body of federal tax law in the United States, which outlines tax obligations and regulations for individuals, businesses, and other entities.
63
What are Interpretative Regulations?
IRS regulations that interpret and explain the meaning of a tax statute, rather than setting new rules or creating additional legal requirements.
64
What are Legislative Regulations?
Regulations issued by the IRS that are directly based on authority granted by Congress through tax statutes. These regulations have the force of law.
65
What is Nonacquiescence?
When the IRS disagrees with a court decision and will not follow the decision in future cases, even though it may apply to the taxpayer involved in that case.
66
What are Office Examinations?
IRS audits that are conducted at an IRS office rather than at the taxpayer’s place of business or home. This is typically for less complex cases.
67
What are Primary Authorities?
The main sources of tax law, including the Internal Revenue Code (IRC), regulations, IRS rulings, and court decisions.
68
What are Private Letter Rulings?
Written statements issued by the IRS to a taxpayer that provide guidance on the tax consequences of a specific transaction or situation.
69
What are Procedural Regulations?
Regulations that explain the procedures to be followed in complying with tax laws, such as filing requirements and audit procedures.
70
What are Proposed Regulations?
Draft regulations issued by the IRS for public comment before they become final regulations.
71
What is a Question of Fact?
An issue in a tax case that involves determining the facts of the situation, such as whether a taxpayer engaged in a specific transaction or activity.
72
What is a Question of Law?
An issue in a tax case that involves interpreting the law, such as whether a particular tax provision applies to a taxpayer’s situation.
73
What are Regulations?
Official interpretations issued by the IRS to explain and clarify the tax laws passed by Congress.
74
What are Revenue Procedures?
Official statements by the IRS that provide guidelines on how to handle specific tax matters, such as filing procedures or administrative procedures.
75
What are Revenue Rulings?
Official interpretations of the tax laws by the IRS that apply to specific factual situations. These rulings provide guidance for taxpayers and the IRS in similar cases.
76
What are Secondary Authorities?
Sources of tax law that provide interpretation or explanation of primary authorities, such as tax textbooks, articles, and some IRS publications, but they do not have the force of law.
77
What is Stare Decisis?
The legal principle that courts should follow precedent or previous rulings in similar cases when making decisions, ensuring consistency in the law.
78
What are Statements on Standards for Tax Services (SSTS)?
Ethical guidelines issued by the American Institute of Certified Public Accountants (AICPA) for tax professionals to follow when providing tax services.
79
What is the Statute of Limitations?
The period of time within which the IRS can assess taxes or a taxpayer can file a claim for a refund. After this period expires, the IRS typically cannot take action.
80
What is Substantial Authority?
The standard of support needed for a taxpayer to avoid penalties for a tax position taken on a return. The taxpayer must have strong legal support for the position, even if it is not established by case law.
81
Who are Tax Return Preparers?
Individuals or businesses that help taxpayers prepare their tax returns, such as accountants or tax software providers.
82
What are Tax Treaties?
Agreements between two or more countries that determine how income, assets, and activities are taxed to avoid double taxation and prevent tax evasion.
83
What are Technical Advice Memorandums?
Written advice issued by the IRS to its personnel in response to questions on specific tax matters, often related to audits or appeals.
84
What are Temporary Regulations?
IRS regulations that are issued for immediate effect, typically while the IRS works on issuing permanent regulations. They have the force of law but are only valid for a limited period.
85
What is Topical Tax?
Likely refers to specific areas or subjects within the broader field of tax law (e.g., corporate tax, estate tax, etc.) that require focused study or interpretation.
86
Cliff Vesting:
A type of vesting schedule where an employee becomes fully vested in their retirement benefits after a certain number of years of service, with no partial vesting before that time. Once the vesting "cliff" is reached, the employee owns 100% of the benefit.
87
Defined Benefit Plans:
Employer-sponsored retirement plans that promise a specified monthly benefit upon retirement, usually based on factors like salary history and years of service. The employer typically assumes the investment risk.
88
Defined Contribution Plans
Retirement plans where the employer, employee, or both make contributions to an individual account for the employee. The retirement benefit depends on the amount contributed and the performance of the investments, with the employee assuming the investment risk. Examples include 401(k) plans.
89
* Graded Vesting:
A vesting schedule where employees gradually earn ownership of employer contributions over time. For example, employees may become 20% vested after 2 years, 40% after 3 years, and so on, until they are fully vested after a certain number of years.
90
Individual Retirement Account (IRA):
A tax-advantaged retirement account that allows individuals to save for retirement. There are different types of IRAs, including traditional and Roth IRAs, each with its own rules for contributions, deductions, and withdrawals.
91
* Nonqualified Deferred Compensation:
A type of compensation arrangement where an employee agrees to defer a portion of their income to be paid out at a later date, typically during retirement. These plans are not subject to the same regulatory requirements as qualified plans, and the employer typically bears more risk.
92
* Qualified Retirement Plans:
Retirement plans that meet specific requirements under the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA). These plans provide tax benefits, such as tax-deferred growth or tax-deductible contributions, and include 401(k) plans and defined benefit plans.
93
94
95
96
97
98
99
100
