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CH 01 The Individual Income Tax Return Copyright Cengage Learning. Powered by Cognero. Page 1 1. The US federal tax law's sole purpose is to raise revenue. a. True b. False ANSWER: False 2. Which of the following is not a goal of the tax law? a. Encouraging certain social goals such as contributions to charity. b. Encouraging certain economic goals such as a thriving business community. c. Encouraging smaller families. d. Raising revenue to operate the government. e. None of these are goals of the tax law. ANSWER: c 3. Which one of the following provisions was by Congress to meet a social goal of the tax law? a. The deduction for job hunting expenses. b. The charitable deduction. c. The moving expense deduction for adjusted gross income. d. The deduction for soil and water conservation costs available to farmers. e. None of these. ANSWER: b 4. Which of the following is not a goal of the tax law? a. Ensuring that all persons pay the same amount of tax. b. Economic goals such as reduction in unemployment. c. Social goals such as lowering the cost of adoption. d. Raise adequate revenue to operate the government. ANSWER: a 5. List two general objectives of the tax code. ANSWER: The tax code promotes social goals, economic goals, and raising revenue. 6. Mark a “Yes†to each of the following if it is an objective of the tax code. Otherwise mark with a “No.†a. To provide a car to each American. b. To promote giving to charities. c. To encourage taxpayers to send their children to college. d. To raise money to operate the government. e. To promote the use of solar energy. ANSWER: a. No b. Yes c. Yes d. Yes e. Yes 7. A corporation is a reporting entity but not a tax-paying entity. a. True b. False (Income Tax Fundamentals 2026, 40e Gerald Whittenburg, Martha Altus-Buller, Steven Gill) ( Edition 2026-24, , ) Name: Class: Date: CH 01 The Individual Income Tax Return Copyright Cengage Learning. Powered by Cognero. Page 2 ANSWER: False 8. Partnership capital gains and losses are allocated separately to each of the partners. a. True b. False ANSWER: True 9. In 2021, Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income. Wesley, age 45, wishes to use the easiest possible tax form. He may file: a. Form 1040EZ b. Form 1040A c. Form 1040 d. Form 1065 e. None of these ANSWER: c 10. Which of the following forms may be filed by individual taxpayers? a. Form 1040 b. Form 1041 c. Form 1065 d. Form 1120 e. None of these ANSWER: a
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