Government Regulation of Business - Other Flashcards
The National Football League has a rule that bars players from entering the league, unless they have been out of high school for at least three years. Maurice, a running back from Big State University who is tired of going to class and wants to start earning as a professional sportsman, challenges the rule. Which of the following is true?
A. Maurice has a strong claim under the ADEA.
B. Maurice’s ADEA claim will probably fail because the ADEA does not protect against reverse age discrimination.
C. Maurice’s ADEA claim will probably fail, because the ADEA does not apply to organizations such as the NFL.
D. B and C.
B
Under the Federal Age Discrimination in Employment Act, which of the following practices is prohibited?
A. Termination of employees between the ages of 65 and 70 for cause.
B. Mandatory retirement of any employee.
C. Unintentional age discrimination.
D. Termination of employees as part of a rational business decision.
C - Even unintentional age discrimination is remedied by the ADEA. So, C is the best choice. However, employees may always be fired for cause (for example, incompetence) - so Choice A is incorrect - and employers may always have fair layoffs as part of a rational business decision when things go badly (so Choice B is incorrect). Mandatory retirement of most employees is prohibited under the ADEA, but there is an exception for corporate executives (so Choice B is incorrect when it refers to “any” employee).
Under Title VII of the 1964 Civil Rights Act, which of the following forms of discrimination is not prohibited? A. Gender. B. Age. C. Race. D. Religion
B - Title VII protects against discrimination in hiring, firing, promotion, and compensation on the basis of race, religion, gender, and national origin. Other statutes protect other groups, but this is the extent of the protection under Title VII itself. The Age Discrimination in Employment Act protects older workers in much the same way, for example
Sholanke works for a large telemarketer. After completing the company training course and working for three months, during which time he exceeds his quota of telephone attempts and telephone contacts, he is fired and replaced by another black male. His supervisor explains that he has been terminated because he speaks English with a Nigerian accent. Which of the following is true?
A. Sholanke has a strong claim for racial discrimination.
B. Sholanke has a strong claim for gender discrimination.
C. Sholanke has a strong claim for national-origin discrimination.
D. All of the above.
C
A large corporation fires Sally for being an alcoholic and Ted for showing up drunk at work. Both file ADA claims. Who is likely to win? A. Sally. B. Ted. C. Both. D. Neither.
A - The condition of being an alcoholic is protected by the ADA
Tankersly files a Title-VII action against his employer, a firm with fewer than 15 employees currently working. Which of the following is true?
A. Tankersly will probably lose this case.
B. If Tankersly could show that when part-time employees and employees on leave were added to full-time employees, the firm had more than 15 employees, he could establish that Title VII applied.
C. A and B.
D. None of the above.
C
Melody is a CPA for Tangier Co., which has just taken bankruptcy. Melody knows that Tangier has not met all its federal payroll tax obligations and is worried about her personal liability. Which of the following are factors that courts consider is determining whether someone is a “responsible person” under Sec. 6672?
A. Is Melody an officer or director?
B. Is Melody a CPA?
C. Does Melody have a graduate degree?
D. A and B.
A
Social security benefits may include all of the following, except A. Payments to divorced spouses. B. Payments to disabled children. C. Medicare payments. D. Medicaid payments
Medicaid is provided separately from social security
After serving as an active director of Lee Corp. for 20 years, Ryan is appointed an honorary director, with the obligation to attend directors’ meetings, but with no voting power.
In 2005, Ryan receives an honorary director’s fee of $5,000. This fee is
A. Reportable by Lee as employee compensation subject to Social Security tax.
B. Reportable by Ryan as self-employment income subject to Social Security self-employment tax.
C. Taxable as “other income” of Ryan, not subject to any Social Security tax.
D. The $5,000 is considered to be a gift not subject to Social Security self-employment or income tax
B - Because he has no voting power, Ryan is not an “employee” of the corporation, and the $5,000 is not employee compensation. He is receiving the money for doing something, however, because he is obligated to attend the meetings.
This obligation makes his $5,000 income, and not a gift. Because he is not an employee of the corporation, this amount is self-employment income, which is subject to both self-employment tax and Social Security tax.
While on vacation, Massey is severely injured in a motorcycle accident. Which of the following is true?
A. Because he was not injured on the job, Massey is ineligible for disability benefits under the Social Security system.
B. In order to be eligible for benefits, Massey must be prevented from working for a year or more.
C. Massey is under 65, so he is ineligible for benefits.
D. A and C.
B
Which of the following types of income is subject to taxation under the provisions of the Federal Insurance Contributions Act (FICA)?
A. Interest earned on municipal bonds.
B. Capital gains of $3,000.
C. A vehicle received as a productivity award.
D. Dividends of $2,500.
C - Social security is set up to help retirees with their loss of earned income. Generally, to be subject to FICA taxes, the income must be earned in the course of employment. This does not mean that only traditional wages are taxed. A car earned as a bonus is still very much a benefit realized in the course of employment, and so the value of the car will be the basis for FICA taxes
Randolph has a bad year with his business, a sole proprietorship, which he runs out of his home. However, his rich aunt, who worries about him, gives Randolph $250,000 in July. Which of the following is true?
A. Randolph must pay tax under SECA on the $250,000.
B. Randolph need not pay tax under SECA on the $250,000 because it is not “income.”
C. Neither A nor B.
D. All of the above.
B - Under SECA - gifts are passive income and not taxable
Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Calculated as a fixed percentage of all compensation paid to an employee.
B. Deductible by the employer as a business expense for federal income-tax purposes.
C. Payable by employers for all employees.
D. Withheld from the wages of all covered employees.
B - Businesses pay into a fund that is used to pay unemployment benefits. The monies put into this fund are tax deductible.
Taxes payable under the Federal Unemployment Tax Act (FUTA) are
A. Partially deductible by the covered employee for federal income-tax purposes.
B. Calculated as a fixed percentage of all compensation paid to an employee.
C. Payable by all employers, regardless of the total amount of compensation paid to individual employees.
D. Deductible by the employer as a business expense for federal income-tax purposes.
D - An employer pays for all obligations under FUTA and the employees do not contribute out of their paychecks. These taxes are fully deductible by the employer when the employer calculates federal income taxes.
Under the Federal Fair Labor Standards Act, which of the following would be regulated?
- Minimum wage.
- Overtime
- Number of hours in the working week.
All 3 answers are correct
