Tax Authority and Legislation Quiz

The Internal Revenue Service (IRS) is the U.S. government agency responsible for tax collection.

VAT stands for Value Added Tax, a consumption tax levied on the value added to goods and services.

Income tax is the primary source of revenue for most governments, providing funds for public services and expenditures.

Sales Tax is not a direct tax; it is an indirect tax imposed on the sale of goods and services.

Tax legislation is primarily designed to increase government revenue to fund public services and programs.

A graduated income tax is a progressive tax system where higher incomes are taxed at higher rates.

Tax audits are conducted to identify and rectify tax fraud or errors in compliance with tax laws.

The Ministry of Finance is typically responsible for overseeing tax laws and regulations in most countries.

Tax credits are designed to directly reduce an individual's or business's tax liability.

TIN, or Tax Identification Number, is a unique identifier assigned to individuals and businesses for tax purposes.

Vacation expenses are generally not tax-deductible for individuals in the United States.

A tax treaty is an agreement between two countries to prevent individuals and businesses from being taxed twice on the same income.

The penalty for tax evasion often includes fines and imprisonment in many jurisdictions.

Tax avoidance is the legal practice of minimizing tax liability, while tax evasion involves illegal actions to escape paying taxes.

The purpose of a tax treaty is to prevent individuals and businesses from being taxed twice on the same income.