Federal Taxes Test 3
A calendar-year taxpayer has W-2 wages and withholds taxes through the year. He files his 2018 return and writes the IRS a check for his remaining 2018 tax liability on May 1, 2020. He discovers a mistake in his favor and wants to amend the return to claim a full refund, until when can he do so? A. April 15, 2022 B. May 1, 2022 C. May 1, 2023 D. April 15, 2023
A
For court proceedings resulting from examinations started after July 1998, the IRS has the burden of proof for any factual issue. As a result, do taxpayers need to maintain records to substantiate items claimed on tax returns? A. No, the IRS is required to produce evidence to support each position taken by the IRS at audit. B. No, the taxpayer cannot use his own documents to challenge the position that the IRS took at audit. C. Yes, the records retention rules have not been affected by this court procedural rule. D. Yes, unless the taxpayer has entered the information from his paper records into a ledger or financial software database.
C
For taxpayers that want someone to represent them in their absence at an examination or at an appeal within the IRS, all of the following statements are correct EXCEPT: A. The taxpayer must furnish that representative with written authorization on Form 2848, Power of Attorney and Declaration of Representative, or any other properly written authorization. B. The representative can be an attorney, certified public accountant, or an enrolled agent. C. The representative can be anyone who helped the taxpayer prepare the return. D. Even if the taxpayer appointed a representative, the taxpayer may attend the examination or appeals conference and may act on his or her own behalf.
C
A contingent fee is a fee that is based on a percentage of a refund reported on a return. An enrolled practitioner may not charge a contingent fee for: A. Representing a client whose return has been challenged by the IRS. B. Preparing a client's tax return. C. Preparing a request for relief from penalties already assessed. D. All of the above.
B
All of the following constitute practice before the IRS, EXCEPT: A. Preparing documents (other than tax returns) B. Appearing as a witness for a taxpayer C. Rendering written advice D. Filing documents
B
An independent CPA serving as a tax return preparer for the Unicorn Company recklessly disclosed information about the company that was discovered while preparing the tax return. Which of the following is true? A. Although considered a bad practice, no penalty can be assessed for such behavior. B. A monetary penalty can be assessed against the tax return preparer. C. A penalty can only be assessed if the disclosed information was financial in nature. D. A penalty can only be assessed if the disclosed information specifically included the names of individuals who had not agreed to be so named.
B
An unenrolled tax return preparer with an AFSP Record of completion has limited representation rights before the IRS. In which of the following circumstances can an unenrolled return preparer represent a taxpayer? A. Discuss a 2018 tax return he did not prepare with a revenue agent B. Discuss a 2018 tax return he prepared and signed with a revenue agent C. Discuss a 2018 tax return he prepared and signed with a revenue officer D. Discuss any tax return with an IRS customer service agent
B
As a tax preparer, which of the following is required on the Third Party Designee (Other than paid preparer) portion of the return? A. Date of birth B. Personal Identification Number (PIN) C. Country of origin D. Official job title
B
For how long must Form 8879 be available to the IRS? A. 1 year B. 3 years C. 5 years D. 10 years
B
How is a disbarment or suspension proceeding against an individual commenced? A. With a complaint signed by the Director of Practice. B. With a complaint signed by the Director of the Office of Professional Responsibility. C. With a complaint signed by the Secretary of the Treasury. D. With a complaint signed by an Administrative Law Judge.
B
If a taxpayer has both an outstanding tax liability and a pending bankruptcy case what should he do? A. Advise the bankruptcy court of the tax liability. B. Advise the IRS of the bankruptcy case. C. Nothing, one case has no effect on the other. D. Nothing, the bankruptcy court is part of the same federal system as the IRS and coordination between the two agencies is automatic.
B
The option to request an online installment agreement is available, for a fee, to whom? A. A taxpayer who has an outstanding federal tax liability of more than $50,000 who has not declared bankruptcy. B. A taxpayer who has an outstanding federal tax liability of $50,000 or less. C. A taxpayer who has the ability to pay the entire outstanding amount in 120 days or less. D. A taxpayer who has an outstanding federal tax liability of less than $50,000 who is currently in bankruptcy proceedings.
B
To collect outstanding tax liabilities, the IRS can do any of the following EXCEPT what? A. The IRS can levy a primary residence B. The IRS can levy unemployment benefits C. The IRS can levy a state refund D. The IRS can levy social security benefits
B
What is a popular target for fraud and abuse that an Electronic Return Originator (ERO) should look out for? A. Amended tax returns B. Earned Income Tax Credit (EITC) C. Form W2 D. None of the above
B
When should you submit your application to become an Authorized IRS E-File Provider? A. When you file your initial return electronically B. No later than 45 days prior to the date you intend to begin filing returns electronically. C. By April 15 D. You must submit an application each year before January 31.
B
Which of the following actions will not result in a revocation of a power of attorney? A. Filing a copy of a previously filed Form 2848 with the word, REVOKE written across the top and the taxpayer's signature and date of revocation written on the page. B. Filing a new Form 8821. C. Filing a written statement of revocation with the appropriate IRS office. D. Filing a new Form 2848.
B
Which of the following is practice before the IRS? A. Appearing as a witness in tax court for a corporation. B. Discussing a clients tax return with an IRS revenue officer. C. Furnishing information at the request of the IRS D. Appearing as a witness for a taxpayer.
B
Which of the following satisfies the copy/list retention requirement for tax preparers? A. A card file with the AGI and tax due or refund for each return prepared B. A spreadsheet with the name and taxpayer identification number, tax year of each taxpayer for whom a return was prepared, and the type of return C. An electronic copy of each Form 1040 prepared, without additional schedules D. A paper copy of each EIC checklist, EIC worksheet and record of how EIC information was received and from whom
B
You own a firm in a small town in Missouri. A couple comes to you to prepare their tax return. They plan to claim a $10,000 payment for fixing up their house as a medical expense. You have explained that you do not feel that this claim will be allowed but they believe it is appropriate and want it to be included. Which of the following statements is true? A. The return cannot be filed until you have determined whether the claim will be allowed or not. B. If you believe that there is at least a 33 percent chance that the deduction will be allowed if examined, then you should complete the return and adequately disclose the expense. C. The return belongs to these taxpayers and you should complete it as instructed. D. If there is not at least a 51 percent chance of this deduction being allowed, you should refuse to take the engagement.
B
Which of the following people is a tax preparer? A. A person who is compensated for using a computer to copy handwritten information into a fillable IRS tax form. B. A person who is compensated for using a computer to complete Schedules A, B, and D for a 1040 filer. C. A person who is compensated for using a computer to complete a tax return for his regular employer. D. A person who is compensated for using a computer to electronically file a tax return that someone else prepared.
B.
A tax practitioner must inform a client of any penalties likely to apply to the client for a position taken on a tax return or other document submitted to the IRS if: A. The practitioner advised the client on the position. B. The practitioner prepared or signed the tax return. C. Both A and B. D. None of the above.
C
A taxpayer who timely filed a return wants to claim a loss for worthless securities. Until when can he do so? A. Three years from the due date of the return. B. Six years from the due date of the return. C. Seven years from the due date of the return. D. Ten years from the due date of the return.
C
Alexander Halle filed an income tax return that contained numerous errors so that his taxable income was understated. The Internal Revenue Service has discovered these errors and is looking into whether penalties can be assessed or the statute of limitations has expired. Which of the following statements is not true? A. If Halle filed his income tax return on March 25, Year One, the normal statute of limitations expires three years from the due date of the return. B. If Halle received an extension and filed his income tax return on June 9, Year One, the normal statute of limitations expires in three years from that date. C. If Halle failed to report 20 percent or more of his income, the statute of limitations is extended to six years rather than just three years. D. If Halle is guilty of tax fraud, the statute of limitations does not apply.
C
An Enrolled Agent (EA) prepared an individual income tax return for a taxpayer with a balance due of $25,597. The taxpayer is not able to pay the entire amount upon filing and would like to set up an installment agreement. Which of the following statements are correct with regard to this agreement? A. Since the taxpayer owed more than $25,000 the taxpayer may not apply online. B. The taxpayer will not be charged a user fee to set up this installment agreement. C. The taxpayer must be in filing compliance. D. The taxpayer will not be charged interest and penalties while making installment payments.
C
An unenrolled return preparer cannot represent a taxpayer before the IRS ______ A. under any circumstances. B. unless the unenrolled return preparer is the paid preparer who prepared the return and completed the box for the third party designee. C. unless the unenrolled return preparer has an AFSP Record of Completion for the tax year of any tax return he prepares and signs after December 31, 2015. D. unless the unenrolled return preparer has been issued a PTIN.
C
Caroline received an audit notification letter scheduling an appointment for July 1, 2018 for the examination of her tax year 2016 Form 1040 return. The week before the scheduled appointment, she received a telephone call from the Internal Revenue Service office canceling the appointment. She was told that she would be contacted at a later date to reschedule the appointment. She was not contacted until July 1, 2019, when she was advised of a new appointment date. Errors identified in the examination resulted in her owing additional tax of $4,000 plus accrued interest of $600. Caroline does not believe that she should have to pay interest for the period that she was waiting for her appointment to be rescheduled. How should she proceed? A. Pay the tax and interest and deduct the interest on her 2019 return, the year paid B. Immediately request an Appeals conference to contest the interest C. Request an abatement of the interest by filing a Form 843 with the Internal Revenue Service center where she filed her 2016 return D. Immediately petition the Tax Court to contest the interest
C
A tax preparer must include in records involving a taxpayer's claim for Earned Income Tax Credit a record of how, when, and from whom the information used in completing the claim was obtained. True or False
True
Conditions imposed on a practitioner who has been censured or suspended are designed to enforce high standards of conduct and reflect the nature of the behavior resulting in the sanction. True or False
True
Donovan uses live news coverage of a local community event to advertise his fees for tax preparation. Because this solicitation is not recorded and because Donovan does not retain a recorded copy of the transmission, he is subject to disciplinary action for violating solicitation regulations. True or False
True
If a taxpayer uses Form 2848, Power of Attorney and Declaration of Representative, a representative of the taxpayer can sign a return for that taxpayer, if permitted. True or False
True
Miranda is a tax practitioner with principal authority and responsibility for her firm's practice. One of the employees of her firm is found to have engaged in a pattern of practice which violates rules and regulations for tax return preparation. Miranda discovered this fact but had yet to take action. For which of the following will Miranda be subject to discipline, herself, if found to be true? A. She did not take reasonable steps to ensure that the firm complies with rules and regulations B. She knew of the practice, but did not take prompt action to correct the noncompliance C. Both of the above D. None of the above
C
To satisfy the earned income credit due diligence requirements, a preparer must retain all of the following EXCEPT: A. A copy of the completed Eligibility Checklist or Alternative Eligibility Record. B. A copy of the Computation Worksheet or Alternative Computation Record. C. A copy of the social security cards for the taxpayer and each qualifying child. D. A record of how and when the information used to complete the Eligibility Checklist or Alternative Eligibility Record and the Computation Worksheet or Alternative Computation Record was obtained by the preparer, including the identity of any person furnishing the information.
C
To which court may a taxpayer petition, without first paying the disputed tax, regarding a disagreement with the Internal Revenue Service? A. District Court. B. Court of Federal Claims. C. Tax Court. D. All of the above.
C
What does the issuance of a CAF number mean? A. The recipient is authorized to practice before the IRS. B. The recipient is a paid tax return preparer. C. The recipient has been granted authority to receive a taxpayer's confidential tax information. D. The recipient is an ERO.
C
When must a tax preparer provide a taxpayer with a copy of the taxpayer's return? A. Upon request B. Within 30 days of the filing of the return C. No later than the time the return is presented for the taxpayer's signature D. No later than the time the return is filed with the IRS
C
Which of the following is NOT part of Federal Treasury Regulations? A. The definition of gross income used for completing a tax return. B. Circular 230 C. Title 26, United States Code D> Title 26, Code of Federal Regulations
C
Which of the following is a proof of payment? A. An invoice from a doctor reflecting the cost of a medical procedure. B. Bank statement showing withdrawals. C. Cash receipt. D. All of the above.
C
Which of the following may a tax return preparer use as identifying information to include with his or her signature on a return or claim for refund? A. Social security number B. Birth date and name C. PTIN D. All of the above
C
Who is permitted to represent a taxpayer before the Appeals office of the IRS? A. An unenrolled return preparer who has prepared at least one return for any taxpayer in the last three years. B. The unenrolled preparer who prepared the tax return that is the subject of the appeal. C. The taxpayer's father. D. The taxpayer's part-time bookkeeper.
C
Who reports completed continuing education to the IRS? A. The preparer sends certificates of completion to the IRS. B. The preparer uploads completed course ID's using the IRS website. C. Courses taken through an IRS-approved CE Provider are reported to the IRS by the Provider. D. Courses are not reported to the IRS. Keep your certificates for 4 years.
C
Tax preparers must provide an identifying number on returns which they sign. Which number is the generally accepted identifying number? A. Social Security Number B. EFIN C. PTIN D. EIN
C.
A Collection Due Process (CDP) hearing is not available if a taxpayer receives which of the following notices: A. Notice of Federal Tax Lien Filing and Your Right to a Hearing under IRC 6320. B. Final Notice - Notice of Intent to Levy and Notice of Your Right to a Hearing. C. Notice of Jeopardy Levy and Right of Appeal. D. Notice of Termination of an Installment Agreement.
D
A disagreement with the Internal Revenue Service can be taken to the United States Tax Court if: A. It pertains to income tax. B. A statutory notice of deficiency has been issued. C. A petition is filed within 90 days from the notice date on the statutory notice of deficiency (150 days if it is addressed to the taxpayer outside the United States). D. All of the above.
D
A lien is a legal claim to property as security or payment for a tax debt. Select the best answer regarding the filing of a Notice of Federal Tax Lien. A. May be filed simultaneously with a Notice and Demand for Payment B. May be filed when a tax deficiency resulting from an audit is agreed to C. May not be filed when an installment agreement is in effect and payments are being made D. May be filed after a tax liability is assessed, billed and the debt is not paid within 10 days of notification
D
A practitioner who is disbarred by the Office of Professional Responsibility may seek reinstatement after: A. 1 year. B. 2 years. C. 4 years. D. 5 years.
D
A tax practitioner may charge a contingent fee for which of the following: A. Services related to an IRS examination of an original tax return or amended tax return filed within 120 days of a notice of examination B. Services related to a claim for credit or refund filed in connection with the determination of statutory interest or penalties C. Services connected to judicial proceedings D. All of the above
D
A tax preparer may be disbarred or suspended from IRS practice for which of the following conduct: A. Criminal conviction of an offense under the Internal Revenue Code. B. Misappropriation of funds received from a client for the purpose of tax payments. C. Disbarment or suspension from the practice as an attorney, CPA, accountant or actuary. D. All of the above.
D
A tax preparer may be sanctioned by the Secretary of the Treasury if the preparer: A. Fails to communicate clearly with her client regarding the terms of the engagement. B. Fails to communicate clearly with her client regarding the fees for her services. C. Fails to communicate clearly with her client regarding when the work will be completed. D. Fails to sign a tax return he prepares without reasonable cause.
D
A taxpayer can challenge a summons that was issued to a third party in which of the following circumstances? A. In all circumstances, by timely filing a petition to quash the summons. B. When a third-party summons is issued to aid in the collection of an assessed liability. C. When a third-party summons is enforced to aid in the collection of an assessed liability. D. When the taxpayer is provided with notice of the third-party summons.
D
A taxpayer filed an appeal of an IRS examination and then signed IRS Form 8821, Tax Information Authorization, on behalf of an Enrolled Agent (EA). Which of the following is correct? A. The EA may represent the client before IRS Appeals based on the Form 8821. B. The EA may represent the client before IRS Appeals with the oral consent of the client. C. The EA may represent the client before IRS Appeals with a note attached by the client. D. The EA may not represent the client before IRS Appeals based on the Form 8821.
D
All of the following are considered examples of disreputable conduct for which a tax preparer can be disbarred or suspended EXCEPT: A. Directly or indirectly attempting to influence the official action of any employee of the Internal Revenue Service by use of threats, false accusations, or by bestowing any gift, favor or thing of value. B. Misappropriation or failure to remit funds received from a client for the purpose of payment of taxes or other obligations due the United States. C. Knowingly aiding and abetting another person to practice before the Internal Revenue Service during a period of suspension or disbarment. D. Failure to timely pay personal income taxes.
D
Authorized IRS e-file Providers that participate in the role as an Online Provider must follow the IRS six security, privacy, and business standards to better serve taxpayers and protect their individual income tax information collected, processed, and stored. Compliance with these standards is mandatory. Which of the following is required? A. Extended Validation SSL Certificate B. Weekly external network vulnerability scans C. Reporting of Security Incidents D. All of the above
D
Cassandra is acting as an Electronic Return Originator (ERO) for her client. She has prepared her client's return and will be submitting it electronically. Which of the following are examples of Cassandra's responsibilities as an ERO? A. Verifying Taxpayer Identity Numbers (TINs) B. Verifying the taxpayer's address C. Checking for suspicious or altered documents D. All of the above
D
Dave operates a retail business as a sole proprietorship with stores in several locations in the Toledo, Ohio area. The books and records for all of the stores are maintained at the main store near his residence. Dave's tax returns have always been prepared by his long time accountant in Toledo. Dave has been notified that his 1040 has been selected for an examination. Dave's brother-in-law in Detroit, Michigan, a district away, has just passed the Enrolled Agent's examination and Dave's wife would like him to handle the examination. Which of the following statements is true regarding the examination? A. The Internal Revenue Service will likely approve a transfer to the Detroit office, provided a properly executed form 2848 is submitted with the request. B. Dave must be represented by his long-time accountant because he is the most familiar with his business tax returns. C. Dave can be represented at the examination by his brother-in-law. D. An active enrolled agent located in any state may represent Dave at the examination.
D
During a recent tax year, the Applegates filed their federal income return and reported income of $72,000. However, they omitted one $20,000 item because they incorrectly believed it to be nontaxable. The government later discovers the problem and wants to assess the tax. What is the statute of limitations? A. Three years B. Four Years C. Five Years D. Six Years
D
Frankie is a truck driver who is also a licensed return preparer and specializes in preparing income tax returns claiming the Earned Income Credit (EIC). Frankie will not be subject to a preparer penalty for an erroneously claimed EIC if he complies with which one of the following? A. Completion of an eligibility checklist based upon information provided by the client. B. Completion of the computation worksheet for the EIC based upon information provided by the client. C. Knowledge or reason to know that the information used to determine eligibility for an amount of the EIC is correct. D. All of the above.
D
Generally, how long does the IRS have to collect outstanding federal taxes? A. 10 years from the due date of the return. B. 10 years from the date the return is filed. C. 10 years from the date of the notice of deficiency. D. 10 years from the date of assessment.
D
How can you ensure you receive credit for continuing education programs you complete? A. Attend a program from an approved IRS CE Provider. B. Give the provider your correctly spelled name and PTIN. C. Check your online PTIN account to see a display of the CE programs reported to the IRS for you by providers. D. All of these actions help ensure you receive proper credit.
D
How long should a taxpayer keep copies of her sales slips and expense receipts? A. If she records the information in a checkbook, ledger, or computer program, she can discard the receipts immediately after transcribing the information. B. She can discard the documents once she files her tax return. C. She can discard the documents once she receives her refund. D. She should keep each document for as long as it may be needed for the administration of any provision of the tax code.
D
How long should you keep your tax records? A. 3 years if you owe additional tax. B. 7 years if you file a claim for a loss from worthless securities. C. No limit if you do not file a return. D. All of the above.
D
If a taxpayer's case is determined pursuant to the small tax case procedure in Tax Court and the taxpayer is unhappy with the outcome, can he appeal the decision? A. Yes, he can appeal to Federal District Court. B. Yes, his appeal is filed in Tax Court. C. Yes, he can appeal to Federal Claims Court. D. No.
D
If the IRS disallows, rejects, or fails to address within six months a taxpayer's timely filed claim for a refund, what can the taxpayer do? A. Enlist the assistance of the Taxpayer Advocate Service. B. Appeal the decision with the Appeals Office. C. File a claim in Federal District Court. D. He can take any of these actions.
D
James must renew his status as an enrolled agent practitioner. He submitted his application for renewal timely on November 15, 2019. What is the effective date of renewal for his enrollment? A. December 31, 2019 B. November 15, 2019 C. January 1, 2020 D. April 1, 2020
D
John Green, who resides in Manhattan, disagrees with the IRS examiner and her supervisor regarding his income tax case. His appeal rights were explained to him and he decided to go to Tax Court. When can he file his petition in Tax Court? A. Immediately. B. When he receives the examiner's written report. C. Within ninety days of the date he receives a Notice of Deficiency from the IRS. D. Within ninety days of the date the IRS mails a Notice of Deficiency to him.
D
Kevin, a paid tax preparer, has not received his PTIN. Can Kevin use his Social Security number instead? A. Yes B. Yes, but must amend the return with his PTIN when he receives it C. Yes, if the return is for a family member D. No
D
Larry Smith passed all parts of the Special Enrollment Examination in October of 2018. Larry submitted the required forms to become an Enrolled Agent. Larry failed the suitability test performed by the Internal Revenue Service and the Office of Professional Responsibility informed Larry that he was denied participation and provided him with the reasons for the denial. Larry received the notice dated January 20, 2019. What action should Larry take to appeal the denial received from the Office of Professional Responsibility? A. Larry must file a written appeal no later than the 19th of February with the Commissioner of Internal Revenue Service or his delegate. B. Larry must file a petition no later than the 30th of January with the District Court. C. Larry must file a written appeal no later than the 30th of January with the Secretary of the Treasury or his delegate. D. Larry must file a written appeal no later than the 19th of February with the Secretary of the Treasury or his delegate.
D
Mary Ellen Leahy received a Notice of Deficiency. In order to stop interest from accruing she paid the tax assessed while she prepared her petition for Tax Court. Is this permissible? A. No, once she pays the tax assessed, she is barred from petitioning Tax Court. B. Yes, it's required. C. Yes, and as a result, her petition will be expedited by the Tax Court. D. Yes, although it is not required.
D
Michael Smith is a tax preparer and works in an office that employs four other tax preparers. Kimberly Wilson is a CPA who was suspended from practice for one year by the IRS. Kimberly knows Michael and asks him for employment during the one-year period of suspension. Michael employs Kimberly for the sole purpose of corresponding and communicating with the IRS on issues arising for Michael's clients. Has Michael done anything wrong? A. No, Michael is allowed to employ Kimberly because her suspension is for less than two years. B. No, because the clients are really Michael's not Kimberly's. C. No, because Kimberly's work for Michael does not constitute practice before the IRS. D. Yes, this relationship is prohibited.
D
Peter filed a claim for refund but his claim was disallowed. Peter thought his tax paid was incorrect but does not want to appeal within the IRS. What can he do? A. Nothing, his only course is to appeal within the IRS. B. He can file suit in the District Court. C. He can file suit in the Court of Federal Claims. D. B or C.
D
Rainer is designating a representative to act on his behalf for tax matters. He does not use Form 2848, he instead has his representative sign a Declaration of Representative. In addition to providing identifying information and contact information for himself and his representative, what other information must Rainer provide? A. The types of tax involved in the arrangement B. The specific year or period involved C. A clear designation of the scope of granted authority D. All of the above
D
Regarding a Tax Information Authorization, Form 8821, which of the following statements is correct? A. The appointee can advocate the taxpayer's position B. The appointee can execute waivers C. The appointee can represent the taxpayer by correspondence D. None of the above
D
The development, implementation and maintenance of a written Information Security Program of taxpayer information by tax return preparers is: A. A recommended best practice B. Highly encouraged C. Part of Sarbanes-Oxley (SOX) D. Required by the Safeguard Rules in the Gramm-Leach-Bliley Act
D
The following statements regarding Circular 230 are correct, EXCEPT: A. Circular 230 contains the rules indicated in 31 CFR, Subtitle A, Part 10. B. Circular 230 contains regulations governing the practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents, and Appraisers before the Internal Revenue Service. C. In order to practice before the IRS, a tax practitioner must understand the rules contained within Circular 230. D. Circular 230 only affects CPAs.
D
The requirement to exercise due diligence applies to which tax preparer? A. The tax preparer who prepares and files Mr. Smith's return. B. The tax preparer who helps another tax preparer prepare Mr. Smith's return. C. The tax preparer who is the district manager of a national tax preparation chain where Mr. Smith had his return prepared. D. A and B.
D
The tax collection period is suspended for all of the following EXCEPT: A. While the IRS and the Office of Appeals consider a request for an installment agreement or an offer in compromise. B. During the pendency of a collections due process hearing. C. During the pendency of a tax court review. D. While the taxpayer travels for 3 months outside the country.
D
The tax collection period is suspended for all of the following EXCEPT: A. While the taxpayer resides outside the country for a continuous period of at least six months. B. During the pendency of a bankruptcy proceeding when the automatic stay is in effect. C. While a request for innocent spouse relief is pending. D. For a period of 6 months after an appeal of a tax court decision regarding innocent spouse relief.
D
Trent's Tax Service prepared George Dell's 2019 return for which Mr. Dell paid Trent's $100. The return was audited and changes were made to both income and expenses on the return but no additional tax was due. These changes were the direct result of negligent actions on the part of Trent's Tax Service. Is the IRS going to penalize Trent's Tax Service for this understatement? A. Yes, Trent's may be liable for a $250 penalty for understatement of taxpayers liability due to an unrealistic position under IRC Section 6694. B. Yes, Trent's may be liable for a $250 penalty for understatement of taxpayers liability due to a negligence under IRC Section 6694. C. Yes, Trent's may be liable for a $250 penalty for understatement of taxpayers liability due to willful or reckless conduct under IRC Section 6694. D. No.
D
Under what circumstances does the three year statute of limitation not apply to a filed tax return? A. The return contains fraudulent tax items. B. The return substantially underreports income. C. The return was prepared by the IRS. D. All of the above.
D
Under which, if any, of the following circumstances is a representative appointed pursuant to Form 2848 permitted to receive and endorse a refund check on a client's behalf? A. If the client is very ill and is physically unable to sign the check. B. If the client is out of the county when the check arrives and will not be back for at least thirty days. C. If the preparer has loaned money to the taxpayer in anticipation of the refund. D. If authorized by the taxpayer a tax return preparer may affix the taxpayer's name to a refund check for the purpose of depositing the check into an account in the name of the taxpayer.
D
What are grounds for censure, suspension, or disbarment and/or the imposition of a monetary penalty? A. A practitioner is shown to be incompetent or disreputable. B. A practitioner fails to comply with any part of Circular 230. C. A practitioner, with intent to defraud, willingly and knowingly, misleads or threatens a client. D. All of the above.
D
What are the two paths an individual can take to become an enrolled agent? A. Past service in the IRS or a letter of recommendation from his Senator. B. Demonstration of special competence in tax matters or demonstration of good character. C. Demonstration of good character or a letter of recommendation from his Senator. D. Past service in the IRS or demonstration of special competence in tax matters.
D
What form must a taxpayer appropriately sign if they use a Practitioner PIN? A. Form 2848 B. Form 8453 C. Form 8821 D. Form 8879
D
Which of the following are included in the requirement for due diligence in preparing a return or claim for refund that claims Head of Household filing status? A. Determining eligibility for HH status B. Verifying accuracy of taxpayer information C. Meeting record-keeping requirements D. All of the above
D
Which of the following cannot be cited as precedent in a tax case? A. Treasury Regulations B. Revenue Rulings C. Judicial Decisions D. Private Letter Rulings
D
Which of the following current-year and timely completed tax returns can be e-filed? A. A joint return where both taxpayers have SSNs. B. A joint return where one spouse has an SSN and one spouse has an ITIN. C. A return for a taxpayer who has adopted a child that has an ATIN, but who could not be provided with an SSN in time to file. D. All of these returns may be e-filed.
D
Which of the following is a requirement to participate in IRS E-File as an Electronic Return Originator? A. Register for e-services, and provide fingerprints when applicable. B. Complete and submit the IRS E-File Application. C. The applicant and all principals and responsible officials must pass a suitability check. D. These are all requirements for participation.
D
Which of the following is an administrative interpretation of the Internal Revenue Code? A. Treasury Regulations B. Revenue Rulings C. Revenue Procedures D. All of these are administrative interpretations
D
Which of the following is an authorized IRS e-file Provider? A. An electronic return originator (ERO), who originates the electronic submission of tax returns. B. An intermediate service provider, who processes information from an ERO and returns it to the ERO. C. A taxpayer who e-files using commercially available software. D. Both an electronic return originator and an intermediate service provider who processes information and returns it to the ERO.
D
Why is it important for a taxpayer to maintain records? A. To identify sources of income and track expenses. B. To prepare and support items on tax returns. C. To track basis of property. D. All of the above.
D
Barry has prepared Susan's tax return. Throughout the process, Barry has proved to be very trustworthy. Susan has signed the tax return and is ready for her copy, but unfortunately Barry's copier is being serviced but will be fixed in a few days. Susan agrees to pick up her copy whenever it is ready. This arrangement is in compliance with tax preparer regulations. True or False
False
Edmund and Meredith are working together on a tax return for one of Meredith's clients. Though Edmund has been suspended from practice before the IRS, he is only in charge of communicating with the IRS about returns and is not filing them himself. This protects the two practitioners from disciplinary proceedings. True or False
False
Information about a firm's practices for the collection and sharing of information are restricted to only associates and employees, not clients. True or False
False
Once the client has provided records to a tax practitioner, the records become the property of the practitioner. True or False
False
Oral information supplied by a tax practitioner to the Department of the Treasury is NOT subject to discipline if it is false or misleading. True or False
False
Pierre and Leo are very close friends, but Pierre is still paying Leo to prepare his tax return. Because they're so close, Leo doesn't have to sign the tax return to claim primary responsibility for the preparation. True or False
False
Shirley provided a copy of a tax return she prepared for her client but didn't have the resources for her own copy. If she just has the name and taxpayer identification number of the taxpayer, this is good enough to have on file for the 3-year period following the close of the return. True or False
False
Philip prepared his client's taxes 2 years ago. He is now going to throw away his copy of the tax return and the list with the name and taxpayer identification number for whom the return was prepared. Since it has been 2 years, Philip is complying with regulations. True or False
False, it is 3 years
A new client visits your office. The taxpayer believes that the U S tax system is purely voluntary and filed a return showing no income tax, requesting all withholding be refunded. The IRS assessed a $5,000 frivolous return penalty. The taxpayer has received a Notice of Intent to Levy and Right to Collection Due Process (CDP) Hearing concerning the $5,000 penalty. The taxpayer wants you to present the previous arguments about the tax system. Which of the following is a correct statement regarding the CDP hearing request raising arguments previously deemed frivolous? A. If the appeal is deemed frivolous, the taxpayer will be given 30 days to withdraw or amend the CDP appeal. B. You would not be subject to a frivolous return penalty by submitting the CDP hearing request. C. Since a $5,000 return penalty has been assessed, a second penalty cannot be assessed for the same tax period. D. In all circumstances, filing the CDP request will suspend any levies while Appeals considers the request.
A
An Enrolled Agent (EA) can represent a taxpayer A. before any administrative level of the IRS B. only if the EA prepared the return C. at all tax related federal court proceedings D. before collections, examinations and Tax Court
A
An Enrolled Agent (EA) is in the process of representing Taxpayer A before the Internal Revenue Service for a tax matter. Taxpayer A's ex-husband also asked the EA to represent him for the same matter. Which of the following is NOT required for the EA to represent both? A. The EA must notify the Office of Professional Responsibility that the EA will be representing both taxpayers B. Both taxpayers must waive the conflict of interest and give informed consent in writing to the EA C. The EA must reasonably believe that the EA will be able to provide competent and diligent representation to both taxpayers D. The representation is not prohibited by law
A
Annie Holt, an enrolled agent, was issued findings of fact, conclusions of law, and a decision ruling that she committed acts of misconduct, which were violations pursuant to Circular 230, and, therefore, a decision was entered ruling that she should be disbarred. What's next? A. Annie Holt has a right to appeal the decision to the Secretary of the Treasury. B. Annie Holt must acquiesce to the decision of the administrative law judge. C. Annie Holt is permanently barred from IRS practice. D. Annie Holt must pay a fine to the Office of Professional Responsibility.
A
Dan, a paid tax preparer, had not been paid for his services by his client Jill. In retribution, Dan posted Jill's confidential tax information on a public web site without her consent. Dan may be liable for: A. Criminal penalties, including imprisonment B. Criminal penalties, but not imprisonment C. Monetary but not criminal penalties D. None of the above
A
Failure to file an answer to a complaint instituting a proceeding for disbarment by the original or extended deadline constitutes: A. An admission of the allegations in the complaint and a waiver of a hearing. B. An error that can be corrected by filing the answer with the Administrative Law Judge within one year of the original (or extended) deadline. C. Grounds for criminal sanctions. D. Equitable estoppel against the practitioner.
A
How is Form 2848 Power of Attorney and Declaration of Representative different from Form 8821 Tax Information Authorization? A. Form 2848 includes all the tax information authorizations of Form 8821 and includes additional representation authorization B. Form 2848 only authorizes the representative to receive tax information, while Form 8821 authorizes the representative to provide tax information to the IRS C. Form 2848 is the most up-to-date form; Form 8821 has been retired D. Only Form 2848 can be used to authorize a tax preparer to endorse and negotiate a taxpayer's refund check
A
How many continuing education hours must enrolled agents obtain? A. 72 hours of continuing education every three years. B. 24 hours must be taken every year. C. 16 hours of federal tax topics every year. D. 18 hours must be earned per year.
A
If a preparer penalty is likely to be assessed pursuant to 26 U.S.C. Sec. 6694 (Understatement of taxpayer's liability by tax return preparer), the tax preparer: A. Can appeal the penalty before it is imposed. B. Cannot appeal the penalty. C. Can only resolve the penalty by pursuing the post-assessment procedure. D. Can file a claim for refund within thirty days of his receipt of the notice and demand.
A
If an enrolled practitioner willfully and knowingly misleads a client, the enrolled practitioner can be censured by or suspended by or face monetary penalties imposed by: A. The Secretary of the Treasury or his delegate. B. A tax court judge. C. A revenue agent. D. The Director of the Office of Professional Responsibility or his delegate.
A
Jill has 6 hours of ethics in the current year. How can Jill use these hours to satisfy her continuing education requirements. A. She can only use 2 hours of ethics for the current year. Excess hours in ethics cannot count towards other categories. B. She can apply her excess ethics to the federal tax law category. C. She can use the excess ethics to satisfy future years of her enrollment cycle. D. She can use the hours for any category where she is deficient.
A
John Jones prepared a return for a client that contained a frivolous position that could not be defended under any circumstances. The examiner who conducted the examination referred Mr. Jones to the Office of Professional Responsibility. After all procedural requirements had been met, the Office of Professional Responsibility filed a complaint against John Jones. Which statement below is correct with respect to the hearing that will take place for the complaint filed against Mr. Jones? A. An Administrative Law Judge will preside at the hearing on a complaint filed for the censure, suspension, or disbarment of a practitioner or disqualification of an appraiser. B. A request by a practitioner or appraiser that a hearing in a disciplinary proceeding concerning him or her be public, and that the record of such disciplinary proceeding be made available for inspection by interested persons may be granted by a United States District Court judge. C. The United States District Court judge assigned to the case will determine the location of the hearing. D. If either party to the proceeding fails to appear at the hearing, after notice of the proceeding has been sent to him or her, the party will be deemed to have waived the right to a hearing and the United States District Court judge may make his or her decision against the absent party by default.
A
Looking to drum up new customers, Able Tax Preparation company publishes a discounted fee schedule in the local newspaper. How long must they adhere to that schedule before they may make a change? A. 7 days B. 5 business days C. 30 days from the last date of publication D. 3 days
C
Karina, a partner in a growing tax accounting firm, is reviewing her firm's policies for compliance with federal law. She comes across an article for best practices for compliance with the Gramm-Leach Bliley (Financial Modernization) Act of 1999. Which of the following statements is FALSE? A. Financial institutions which outsource certain functions are exempted from the requirements of the Act B. Tax return preparers, subject to regulation by the Federal Trade Commission (FTC), are considered financial institutions subject to the Act's provisions C. Under related FTC requirements, financial institutions are responsible for the development and implementation of a program to protect client information, which documents the safeguards in place D. The Act prohibits tax return preparers, such as Karina's firm, from disclosing client information to outside parties
A
Molly is a practitioner who willfully failed to sign a tax return even though federal tax law requires the signature. The IRS may sanction Molly under: A. Incompetence and Disreputable Conduct B. Negotiation of Check C. Willful or reckless conduct D. Tax shelter
A
Ray was suspended from practice for four months by the Office of Professional Responsibility. Which of the following is Ray permitted to do during the period of suspension? A. Appear as a witness for a taxpayer. B. Sign closing agreements regarding tax liabilities. C. Represent taxpayers before IRS with respect to returns Ray did not prepare. D. Sign a consent to extend the statute of limitations for the assessment and collection of tax.
A
Roger and Keith are partners in a body shop business. Each had his individual 2014 return examined and each disagreed with the IRS. Roger decided to take his case to IRS Appeals. After the conference, Roger still disagreed with the IRS. Keith decided to bypass IRS Appeals. After satisfying certain procedural and jurisdictional requirements, can both Roger and Keith take their cases to court? A. Yes, both can. B. Keith can but Roger cannot because he utilized the IRS appeals process. C. Roger can but Keith cannot because he first must utilize the IRS Appeals process. D. Neither can.
A
The Internal Revenue Service may accept an Offer in Compromise to settle unpaid tax accounts for less than the full amount due. A Collection Information Statement (financial statement) is not required with the offer when the reason for the offer is: A. Doubt as to liability B. Doubt as to collectability C. To promote effective tax administration D. Economic hardship
A
What authority is granted to a tax return preparer using Form 2848, Power of Attorney and Declaration of Representative? A. Allow an enrolled agent to represent a taxpayer before the IRS B. Allow a CPA to act as the taxpayer's attorney in U.S. Tax Court C. Allow an unenrolled tax return preparer to act as the taxpayer's representative to execute a closing agreement D. Allow an unenrolled tax return preparer to sign the taxpayer's tax return
A
What consequences does a taxpayer face if he agrees with changes made during an audit and signs an agreement but fails to promptly pay the taxes due? A. He will be charged interest on the additional taxes from the due date of the return until the payment date. B. He will be charged a penalty on the additional taxes from the due date of the return until the payment date. C. He will be charged a failure to pay penalty for violating the agreement. D. He will be charged interest and a penalty on the additional taxes from the due date of the return until the payment date.
A
What is an Electronic Filing Identification Number (EFIN)? A. The IRS assigns an EFIN to identify IRS Authorized IRS e-file Providers. B. It is a number you must use if you are not an IRS Authorized E-file Provider. C. It is a number the IRS issues to every tax return preparer. D. It is a preparer tax identification number.
A
What is it called when the IRS claims an interest in a taxpayer's vacation house as security to pay a tax debt? A. A lien. B. A levy. C. Foreclosure. D. Estoppel.
A
What is the minimum age at which an individual may become a tax return preparer? A. 18 years B. 21 years C. 25 years D. None of the above
A
What publication sets forth the procedural rules for the conduct of proceedings on complaints filed by the Office of Professional Responsibility? A. Circular 230 B. The Rules of Federal Procedure. C. The Rules of Federal Appeals. D. Title 26, U.S.C.
A
Which of the following is the IRS not required to agree with? A. Tax court decision B. Treasury Regulations C. Revenue Rulings D. Revenue Procedures
A
Which of the following people is a tax preparer? A. A British citizen who is compensated for preparing U.S. tax returns in England for Americans who live in England. B. A volunteer for VITA who only prepares tax returns for VITA clients. C. An IRS employee who assists taxpayers complete returns during an IRS open house. D. All of the above
A
Who has the burdens of proof and production with respect to a taxpayer penalty if the taxpayer provides reasonable cooperation, adequately substantiates items, and maintains required records? A. The IRS has the burden of proof and the initial burden of production. B. The taxpayer has the burden of proof and the initial burden of production. C. The IRS has the burden of proof and the taxpayer has the initial burden of production. D. The taxpayer has the burden of proof and the IRS has the initial burden of production.
A
With respect to unenrolled tax return preparers, which of the following statements is correct? A. An unenrolled return preparer is an individual other than an attorney, CPA, enrolled agent, enrolled retirement plan agent, or enrolled actuary who prepares and signs a taxpayer's return as the preparer, or who prepares a return but is not required (by the instructions to the return or regulations) to sign the return. B. An unenrolled return preparer is only permitted to appear as a taxpayer's representative before a Customer Service Representative of the Internal Revenue Service. C. An unenrolled preparer may receive refund checks on behalf of the taxpayer if Form 8821 has been executed. D. An unenrolled preparer is permitted to represent a taxpayer over the telephone with the Automated Collection System unit.
A
Waiting more than three calendar days to submit a return to the IRS once the ERO has all necessary information for origination is considered: A. Stockpiling B. Transmitting C. Submission D. Forgetfulness
A.
In a conversation with Jill Peachtree, a longtime client and personal friend, you discover that she won $5,000 on a trip to Las Vegas. She does not receive a W-2G and insists on not reporting it. She has no other, gambling income or expenses for the year. She did not tell you about this income prior to preparing her return. What should you do before you file the return? A. Inform Jill that it may be necessary to pay taxes on the income if she is subjected to an audit. B. Advise her that the income is taxable, and the consequences not reporting it properly. If not corrected, you cannot sign the return. C. You may file the return without reporting the income since no W- 2G was issued to Jill. D. You must sign the return, and provide Jill with an explanation of the impact of not reporting the income.
B
Jackie has received a notice from the Internal Revenue Service stating that her Social Security Number has been compromised. Which form should she file? A. Form 1405 B. Form 14039 C. Form 114 D. Form 9839
B
Joseph Smith, a tax preparer admitted to practice before the IRS, has represented Stephen Francis before the Internal Revenue Service and also prepared returns for Stephen in each of the last three years. Stephen was divorced last year, and his ex-wife, Lindsay, stops by Joseph's office and asks Joseph to represent her before the Internal Revenue Service with respect to the examination of her return that she filed separately from her husband in a year in which they were separated but not yet divorced. Which of the following statements is true? A. Because the representation involves a tax return for which Lindsay filed separately, and Lindsay was separated at the time, Joseph may undertake the representation of Lindsay without considering whether a conflict of interest exists between Lindsay and her former spouse. B. Joseph may represent Lindsay, provided both she and Stephen waive the conflict of interest in writing. C. Joseph cannot represent Lindsay because there is a direct conflict of interest to his client Stephen. D. Now that Joseph is aware of the pending examination, he cannot represent either party.
B
Julie, who lives in Washington, DC, operated a business without books and records. Her business income and expenses were reported on Schedule C (Form 1040). Julie's tax return for 2017 was examined and substantial adjustments were proposed. Julie disagreed with the adjustments and wants to take her case directly to Tax Court. A Statutory Notice of Deficiency was issued to Julie by the IRS Area Director. Julie can file a petition for a Small Tax case before the U.S. Tax Court during which of the following periods beginning from the date of the issuance of the notice? A. 30 days B. 90 days C. 150 days D. None of the above
B
Karl Robinson had his income tax return examined, which resulted in adjustments. Karl administratively appealed the adjustments. Some of the adjustments were sustained, and this left Karl with an income tax deficiency of $45,000. Can Karl appeal his case pursuant to the small tax case procedure? A. Yes, his appeal will be made to the next level of internal Appeals pursuant to the small tax case procedure. B. Yes, his appeal will be made to U.S. Tax Court pursuant to the small tax case procedure. C. Yes, his appeal will be made to U.S. District Court pursuant to the small tax case procedure. D. No, his case is not eligible for the small tax case procedure.
B
Must an aggrieved taxpayer make use of the IRS appeals process? A. Yes, before a taxpayer can initiate a court case, he must exhaust his right to use the IRS appeals process. B. No, a taxpayer can bypass the IRS appeals process but if he files in Tax Court, the Tax Court will refer the case to the IRS appeals system. C. No, a taxpayer can bypass the IRS appeals process but if he files in Federal Claims Court, the Claims Court will refer the case to the IRS appeals system. D. No, a taxpayer can bypass the IRS appeals process but if he files in Federal District Court, the District Court will refer the case to the IRS appeals system.
B
Taxpayers often elect the Direct Deposit option because it is the fastest way of receiving refunds. How is the financial institution that will receive the deposit identified? A. The ERO must obtain independent confirmation of the financial institution's routing number and customer account number from the IRS. B. The ERO may rely upon the taxpayer to provide the bank's routing number and account number. C. The ERO must obtain independent confirmation of the financial institution's routing number and customer account number from the bank itself. D. The ERO must obtain independent confirmation of the financial institution's routing number and customer account number from the FDIC.
B
Taxpayers should keep supporting documents for items shown on a return, generally: A. Until the end of the calendar year following the year for which the return was filed B. Three years from the latest of the due date of the return or the date the return was filed C. Five years from the due date of the return or the date the return was filed D. Seven years from the due date of the return or the date the return was filed
B
The Statutory Notice of Deficiency is also known as: A. A 30-day letter because the taxpayer generally has 30 days from the date of the letter to file a petition with the Tax Court. B. A 90-day letter because the taxpayer generally has 90 days from the date of the letter to file a petition with the Tax Court. C. An Information Document Request (IDR) because the taxpayer is asked for information to support its position regarding its liability for tax. D. A notice and demand because the taxpayer is put on notice that the tax liability is due and Owing.
B
The Tax Court has generally held that taxpayers who rely on software to justify errors on self-prepared returns are A. not liable for the Section 6662 accuracy-related penalty. B. liable for the Section 6662 accuracy-related penalty. C. liable for 20% of the Section 6662 accuracy-related penalty. D. liable for 40% of the Section 6662 accuracy-related penalty.
B
Frank Maple, a Certified Public Accountant, represents his brother Joe Maple and Joe's business partner Bill Smith. Joe Maple and Bill Smith are equal shareholders in the Joe & Bill Corporation. The Internal Revenue Service examined the corporation and determined that one of the shareholders committed fraud, but could not determine which shareholder it was. Frank has made an appointment with the Internal Revenue Service to determine which partner was guilty. Which of the following statements reflects what Frank should do in accordance with Circular 230? A. Frank should meet with the Internal Revenue Service and try to convince the examiner that each shareholder is equally guilty. B. Advise Joe & Bill that they should dissolve the corporation thereby making it difficult for the Internal Revenue Service to pursue the issue. C. Advise Joe & Bill that he cannot represent them because there is a conflict of interest. D. Advise Joe & Bill on creating documents that will convince the Internal Revenue Service that neither shareholder is guilty of fraud.
C
Generally, for how long should a taxpayer retain records? A. Five years. B. Indefinitely. C. Until the statute of limitations expires. D. Ten years.
C
Harold, a tax preparer, advises prospective clients that he is able to obtain approval of qualified retirement plans with unique vesting provisions because of his close relationship with the IRS territory manager of the Tax Exempt Government Entities operating unit in his locality. Does this type of solicitation constitute disreputable conduct? A. No, if Harold is telling the truth. B. No, if anyone could obtain approval of these retirement plans. C. Yes, regardless if he is telling the truth. D. Yes, if the retirement plans are not legitimate.
C
How long does the IRS have to collect outstanding federal taxes? A. Three years from the date of assessment. B. Five years from the date of assessment. C. Ten years from the date of assessment. D. Forever.
C
How long must each practitioner maintain records of their completed CPE credits? A. CPE credit information does not have to be retained by the Enrolled Agent since the qualifying organization provides the Office of Professional Responsibility a list of each participant that completed CPE credits. B. CPE credit information must be maintained for a period of four (4) years from the date they are completed. C. CPE credit information must be retained for a period of four (4) years following the date of renewal of enrollment D. CPE credit information must be retained for a period of one (1) year following the year they are completed.
C
How long should a taxpayer keep his copy of his W-2? A. He can discard it as soon as he files the relevant return. B. He can discard it as soon as he receives his refund. C. He should keep it for as long as it may be needed for the administration of any provision of the tax code. D. He can discard it three years from the close of the tax year.
C
How many continuing education credits does an enrolled agent need to complete if he or she is initially enrolled during an enrollment cycle? A. 2 hours of qualifying continuing education credit per month. B. 2 hours of ethics per year. C. 2 hours of qualifying continuing education credits per month AND 2 of those hours must be ethics per year. D. A minimum of 16 hours must be earned per year, two of which must be on ethics.
C
If an audit results in additional tax liability, can a taxpayer avoid the accrual of interest on that liability if he acquiesces to changes proposed and signs an agreement at the conclusion of an audit? A. Yes, if he pays the balance due immediately. B. Yes, if he pays the balance due within sixty days of the date he signed the agreement. C. Generally, no. D. No, unless the IRS examiner specifically agreed to forbearance.
C
If the IRS levies property and sells it at a sale _______________ A. The IRS will remit any excess proceeds to the taxpayer. B. The IRS will apply any excess proceeds to the cost of the levy and sale. C. The IRS will apply the proceeds from the sale to the cost of the levy and sale first before applying it to the tax liability. D. The IRS will bill the taxpayer for the cost of the sale and levy.
C
In a proceeding against a practitioner that ends with a decision to disbar the practitioner, can the practitioner appeal? A. No, the decision is final. B. Yes, the practitioner has 21 days to file an appeal. C. Yes, the practitioner has 30 days to file an appeal. D. Yes, the practitioner has 45 days to file an appeal.
C
Is a practitioner who has been charged with violating a part of Circular 230 permitted to be represented by counsel? A. No, there is no provision for a hearing so there is no procedure for representation. B. No, there is a provision for a hearing, but because he is enrolled pursuant to Circular 230, he must face the authorities and provide an explanation in his own words. C. Yes. D. Yes, but only if the representative is also enrolled pursuant to Circular 230.
C
Is an ERO representative permitted to sign an 8879 by using a rubber stamp? A. Yes, because an ERO is not required to sign an 8879 so if the ERO representative uses a rubber stamp, it's allowed. B. Yes, because a taxpayer is not required to sign an 8879 so if the ERO representative uses a rubber stamp, it's allowed. C. Yes. D. No.
C
John Jones prepared the tax return for Mr. William Smith. The return of Mr. Smith contained a schedule C, wages (Form W-2) and retirement income (Form 1099-R). Mr. Smith signed a Form 8879, IRS e-file Signature Authorization, which allowed John Jones to electronically file Mr. Smith's tax return. Based upon the information in the tax return of Mr. Smith, which statement below describes the documents that Mr. Jones is required to maintain for Mr. Smith's electronically filed tax return? A. Mr. Jones must only maintain a paper copy of the tax return and W-2. B. Mr. Jones must only retain one of the signed Forms 8879. C. Mr. Jones must retain a copy of the signed Form 8879, copies of Forms W-2 and 1099-R, as well as any supporting documents that are not included in the electronic return data. D. Mr. Jones does not have to retain any of the documents used in the preparation of Mr. Smith's return. Mr. Jones should secure a signed statement from Mr. Smith that lists all the documents used in the preparation of the return, and that they were all returned to Mr. Smith.
C
Leroy is an enrolled agent. His records show that he had the following hours of qualified CPE in 2019: January: 8 hours May: 12 hours December: 4 hours None of the courses related to ethics. Based on these records, Leroy ______ A. Has met his 2019 CPE requirements. B. Needs four more CPE hours to satisfy his 2019 requirements. C. Needs an additional two hours of ethics to satisfy his 2019 requirements. D.Needs an additional two hours of ethics and two more general hours to satisfy his 2019 requirements.
C
