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Income tax > Chapter 1 (identification) > Flashcards

Chapter 1 (identification) Flashcards

week 1-3

1
Q

are those not explicitly stated in the Constitution that allows the government to take actions, which are needed to efficiently perform essential duties.

A

inherent powers

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2
Q

It exist as essential force in order that a government can command, maintain peace and order, and survive, irrespective of any Constitutional provision.

A

inherent powers

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3
Q

States have three inherent powers, what are those?

A
  1. Police Power
  2. the power of eminent domain.
  3. The Power of Taxation
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4
Q

it is the power to protect citizens and provide for safety and welfare society

A

Police Power

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5
Q

The property taken in the exercise of this power is destroyed because it is noxious or intended for a harmful purpose.

A

Police Power

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6
Q

It is considered to be the most all-encompassing of the three powers.

A

Police Power

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7
Q

Municipal governments exercise this power by virtue of the general welfare clause of the Local Government Code of 1991.

A

Police Power

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7
Q

the 2 Requisites of a valid police measure

A

Lawful Subject
Lawful Means

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8
Q

a valid police measure that the activity or property sought to be regulated affects the public welfare.

A

lawful subject

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9
Q

a valid police measure the means employed must be reasonable and must conform to the safeguards guaranteed by the Bill of Rights.

A

Lawful Means

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10
Q

It affects only property RIGHTS. It may be exercised by some private entities. Upon payment of just compensation, the property forcibly taken under this power is needed for conversion to public use or purpose.

A

POWER OF EMINENT DOMAIN

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11
Q

It affects only property rights and may be exercised only by the government. The property taken under this power shall likewise be intended for a public use or purpose.

A

POWER OF TAXATION

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12
Q

It is used solely to raise revenues, to protect the people and extend them benefits in the form of public projects and services. Hence, it cannot be allowed to be confiscatory, except if it is intended for destruction as an instrument of the police power.

A

POWER OF TAXATION

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13
Q

is a power by which an independent state, through its law-making, raises and accumulates revenue from its habitants to pay the necessary expenses of the government

A

taxation

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14
Q

This process of taxation involves the passage of tax laws or ordinances through the legislature or through a local lawmaking body (e.g. sanggunian)

A

Levy or imposition

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15
Q

it is one of the r in taxation that refers to the transferring wealth from the richer sections of society to poorer sections

A

Redistribution

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15
Q

______ is the imposition of compulsory levies on individuals or entities by governments in almost every country of the world. Taxation is used primarily to raise revenue for government expenditures, though it can serve other purposes as well.

A

taxation

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15
Q

it is one of the r in taxation that the taxes raise money to spend, on armies, roads, schools, and hospitals, and on more indirect government functions like market regulation or legal system

A

Revenue

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16
Q

This process involves the act of administration and implementation of tax laws by the executive through its administrative agencies such as the Bureau of Internal Revenue (BIR) or Bureau of Customs (BOC).

A

Assessment and Collection.

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16
Q

it is one of the r in taxation that taxes are levied to address externalities; for example tobacco is taxed to discourage smoking, and a carbon tax discourages used of carbon-based fuels

A

repricing

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17
Q

This process involves the act of compliance by the taxpayer in contributing his share to pay the expenses of the Government.

A

Payment.

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18
Q

This is a process of claiming for tax illegally collected or mistakenly paid. For a refund request to prosper, it must first be filed with the Commissioner of Internal Revenue (CIR).

A

Refund

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19
Q

______ of tax also includes the options, schemes or remedies as may be legally open or available to the taxpayer.

A

Payment.

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20
Q

Principles of a SOUND TAX SYSTEM based on Adam Smith’s Canons of Taxation are:

A
  1. Fiscal Adequacy
  2. Administrative Feasibility
  3. Theoretical Justice or Equality
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21
Q

It is a sound tax system, and the revenue should be elastic or capable of expanding or contracting annually in response to variations in public expenditures.

A

Fiscal Adequacy

22
Q

It is a sound tax system that tax laws should be capable of convenient, just, and effective administration.

A

ADMINISTRATIVE FEASIBILITY

23
Q

It is a sound tax system that states that the tax burden should be in proportion to the taxpayer’s ability to pay. This is the so-called ability to pay principle. Taxation should be uniform as well as equitable

A

Theoretical Justice or Equality

24
Q

This states that a tax bill must only be applicable and operative after becoming a law. Thus, the effectivity of the law commences upon its approval and its scope would only cover the present and future transactions.

A

Prospective application of tax laws

25
Q

it states that unless otherwise provided by the tax law itself, taxes in general are not cancelable. The court held that there is no time limit on the right of the BIR Commissioner to assess taxes on unreasonable accumulated earnings of the corporation. The law on prescription being a remedial measure should be interpreted liberally in order to protect the taxpayer.

A

Imprescriptibility of Taxes

26
Q

It refers to the imposition of taxes on the same income, assets or financial transaction at two different points of time. Double taxation can be economic, which refers to the taxing of shareholder dividends after taxation as corporate earnings.

A

Double Taxation

27
Q

There is double taxation where one tax is imposed by the State and the other is imposed.

A
  1. direct duplicate taxation
  2. indirect duplicate taxation
28
Q

permits the taxpayer to minimize (if not to escape) payment of tax by lawful means.

A

ESCAPE FROM TAXATION

29
Q

it occurs when illegal efforts are made to escape the payment of a tax

A

tax evasion (unlawful means)

30
Q

it connotes fraud through the use of pretenses and forbidden devices to lessen or defeat taxes

A

tax evasion

31
Q

evidence to prove tax evasion?

A

a. failure of taxpayer to declare for taxation purposes his true and actual income derived from business for 2 consecutive years
b. substantial under declaration of income in the income tax return for four conscutive years coupled intentional ovestatement of deductions

32
Q

occurs when legally permissible attempts are made to minimize or reduce the tax to be paid

A

Tax avoidance (lawful means)

33
Q

Tax avoidance (lawful means)

A

*An action taken to lessen tax liability and maximize after-tax income.
*Tax avoidance does not put you in jail
*Tax avoidance is the use of legal methods of reducing taxable income or tax owed. Claiming allowed tax deductions and tax credits are common tactics, as is investing in tax-advantaged accounts

34
Q

it is a legal means used by the taxpayer to reduce taxes

A

tax avoidance

35
Q

a taxpayer has a legal right to decrease the amount of what otherwise would be his taxes or altogether avoid them by means which the law permits

A

tax avoidance

36
Q

the person does not incur fraud thereby even if the act is thereafter found to be insufficient

A

tax avoidance

37
Q

taxpayers may choose to pay lower tax rate in some transactions as permitted by Tax Laws.

A

Tax Option

38
Q

it is the transfer of tax burden to another; the imposition of tax is transferred from the statutory taxpayer to another without violating the Law. As a rule, only indirect taxes may be shifted; direct taxes cannot be shifted.

A

Shifting

39
Q

This refers to the reduction in the price of the taxed object equal to the capitalized value of the future taxes which the purchaser expects to be called upon to pay.

A

Capitalization

40
Q

it is made when the price of the property is lowered to accommodate the exclusion of the tax which is expected to be paid by the seller as a result of sale transaction.

A

capitalization

41
Q

The producer absorbs the payment of tax to reduce prices and to maintain market share. The tax, therefore, is transformed into a gain through the medium of production

A

Transformation

42
Q

as a privilege is personal and in any ways cannot be transferred or assigned by the person to whom it is given without the consent of the state.

A

Exemption

43
Q

Is a general pardon of the state by intentionally overlooking its authority to imposed penalties on persons guilty of tax evasion or violation of a particular revenue or tax law.

A

Tax Amnesty

44
Q

is used to give tax evaders a chance to start a new, properly comply with the tax laws, and pay the correct taxes.

A

tax amnesty

45
Q

there is a __________ when the state desists or refrains from exacting, inflicting or enforcing something as well as to restore what has already been taken.

A

Tax Condonation or Tax Remission

46
Q

Classification of Tax Exemption

A

Expressed Exemption
Implied Exemption or by Omission
Contractual Exemption

47
Q

it denotes a grant of immunity, expressed or implied, to a particular person, corporation, or to persons or corporations of a particular class, from a tax upon property or on excise which persons and corporation generally within the same taxing district are obliged to pay.

A

exemption from taxation

48
Q

This doctrine of law states that a tax claim for refund, which is prevented by prescription, may be allowed to be used as payments for unsettled tax liabilities if both taxes arise from the same transaction in which overpayment is made and underpayment is due.

A

EQUITABLE RECOUPMENT

49
Q

This doctrine is not applicable to cases where the taxes involved are totally unrelated.

A

EQUITABLE RECOUPMENT

50
Q

This doctrine states that taxes are not subject to set-off or legal compensation because the government and the taxpayer are not mutual creditor and debtor of each other

A

set-off taxes

51
Q

effected through court proceedings could only be allowed if the act involves a direct and illegal disbursement of public funds derived from taxation.

A

TAXPAYER SUIT

52
Q

This doctrine provides that ________ are generally allowed and enforceable when the subject matter thereof is not prohibited from being compromised and the person entering such compromise is duly authorized to do so.

A

compromises

53
Q

The government can compel payment of tax and forfeiture of property through the exercise of police power.

A

power to destroy

54
Q

This tax doctrine is based on the Marshall Dictum which states that the power to tax includes the power to destroy because the taxpayer has no option but to pay the tax imposed to him.

A

POWER TO DESTROY

55
Q

literally means place of taxation. The general rule is that the taxing power cannot go beyond the territorial limits of the taxing authority. Basically, the state where the subject to be taxed has a situs may rightfully charge and collect the tax.

A

situs of taxation

56
Q

Why is it important to know the situs of taxation?

A

Knowing the available tax exemptions;
Knowing your obligations to avoid incurring unnecessary penalties;
Determining the proper tax rates of certain transactions.

Income tax (9 decks)

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