INCOME TAXATION 5th Edition (BY: VALENCIA & ROXAS) 1

SUGGESTED ANSWERS
Chapter 1: General Principles
and Concepts of Taxation

CHAPTER 1
GENERAL PRINCIPLES AND CONCEPTS OF TAXATION
Problem 1 – 1 TRUE OR FALSE
1. False – Without money provided by tax power, the other inherent powers cannot
function well.
2. True
3. True
4. True
5. True
6. True
7. False – Taxation power is subject to inherent and Constitutional limitations.
8. False – Taxation power is not absolute because it is subject to limitations.
9. True
10. False – penalty is an example of imposition of amount for police power.
11. True
12. False – governmental function unless stated otherwise.
13. False – government agencies engaged in proprietory functions are subject tax unless
stated otherwise.
14. True

Problem 1 – 2 TRUE OR FALSE
1. False – Concurrence of the majority of congress.
2. False – Churches are required to pay income taxes in cases of sale of real property
and business engagement.
3. False – No public funds shall be appropriated for religious purpose.
4. False - All bills even if approved by the 2/3 of the congress should still be signed by
the President to become law.
5. False – No person shall be imprisoned for nonpayment of poll tax.
6. False – Taxation power is essentially legislative function; hence not every government
unit exercises this power.
7. True
8. False - Benefits from taxation may be or may not be experienced.
9. True
10. False – Judicial review
11. False – “Ex post facto” law is not applicable for tax purposes.
12. True
13. False – A tax evader breaks the law while the tax avoider sidesteps it.
14. False – Neither transferable/assignable
15. True

Problem 1 – 3 TRUE OR FALSE
1. True
2. True
3. True
4. True
5. False – prospective effect
6. True
7. True
8. False – national taxes
9. True
10. True

C 10. C 8. B 13. B 12. B 10. A 13. C 7. C 10. D 2. B 8. A 1. D 2. B 1. C 6. 13. A 9. B 4. D 3. True 14. C 9. C 8. A 13. True 12. D 15. A 4. A 1. A 2. D 14. B 7. A 13. 1 – 6 Prob. D 3. D 4. B 6. C 9. C 3. C 1. C . 1 – 7 Prob. D 6. C 9. D 8. 1 – 5 Prob. B 5. C 11. D 12. A 14. C 7. C 10. B 11. A 2. C 11. C 10. 1 – 4 Prob. D 5. D 11. A 10. B 9. D 3. False – Doubts must be resolved liberally in favor of the taxpayer. False – null and void Prob. C 2. A 6. B 7. True 15. C 2. C 12. D 5. 1 – 9 1. B 11. A 7. B 5. A 5. C 16. C 12. 1 – 8 Prob. D 5. D 3. B 3. C 12. D 1. C 4. D 14. C 17. D 7. B 9. D 4. C 8. D 15.INCOME TAXATION 5th Edition (BY: VALENCIA & ROXAS) 2 SUGGESTED ANSWERS Chapter 1: General Principles and Concepts of Taxation 11. C 8. B 6. A 4. C 6.