IDENTIFICATION:(2 pts. each) 1. It is using illegal means to avoid paying taxes. 2. It is a legitimate way of reducing your tax liabilities. 3. This method involves planning under various provisions of the taxation laws. 4. It is an act of handling the financial affairs while complying with the tax provisions. 5. It is using one's knowledge of tax code in finding loopholes to lessen the payment of taxes. 6. An any necessary expense a business must make to create an income. 7. A compulsory contribution made by citizens of the country to meet various government expenses. 8. It is defined as an act of deceiving or misrepresenting. 9. It is a person who pays tax or any sum of money under the provisions of the Income tax Act 1961. 10. It involves using tax-saver instruments with a specific purpose in mind. ENUMERATION:(1 pt. each) 1-3. Enumerate the Types of Tax Planning 4-9. Enumerate the significance of tax planning 10-13. Give the Advantages of Tax Planning 14-17. Give the elements Tax Management 18-20. What are the examples of allowable deductions under tax avoidance? Give only 3 examples. TRUE OR FLASE:(2 pts. each) F1. Tax avoidance is using one's knowledge of the tax code in finding loopholes to lessen the payment of taxes which is illegal. T2. Even if a person is exempted from paying taxes, he/she is still required to file an income tax return (ITR). Otherwise, this is considered tax evasion. F3. One of the penalties of Tax Evasion is a Surcharge of 30% or 60% of the Tax Due. T4. Allowable Deduction is any necessary expense a business must make to create an income. F5. Using authentic accountable forms is a form of tax evasion that is considered a criminal liability under the Tax Code. T6. Tax evasion is part of an overall definition of tax fraud, which is illegal intentional non-payment of taxes.
F7. Fines and Imprisonement are one of the many benefits in Tax Evasion. T8. Fraud can be defined as "an act of deceiving or misrepresenting," F9. Tax Evasion is legally permissible under taxing statue. T10. Tax avoidance is lawful, but in some cases, it could come in category of crime. MULTIPLE CHOICE:(1 pt. each) 1.The following are examples of allowable deductions, except: a.Commissionsb.Depreciationc.Wages & Salaries d.Fringe Benefits 2.It is defined as "an act of deceiving or misrepresenting," a.Under-declaring income b.Fraud c.Inflating deductions without proof d.Maximizing deduction 3.The following defines "Tax Evasion", except: a.It is done by twisting or interpreting the provision of law and avoiding payment of tax. b.It is part of an overall definition of tax fraud, which is illegal intentional non-payment of taxes. c.It is using illegal means to avoid paying taxes. d.It involves hiding or misrepresenting income. 4.It is any necessary expense a business must make to create an income. a.Depreciationb.Interestc.Allowable Deductions d.Advertising Expense 5.The following forms of tax evasion are considered criminal liabilities under the Tax Code, except: a.Failure to give charitable contributionsb.Over-declaring expenses/deductionsc.Under-declaring income d.Non-filing of appropriate tax returns
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