Tax Research Chapter 1 Quiz
The Lowell Bar Association v. Loeb case addressed the issue of: a. unauthorized practice of law by nonattorneys engaged in tax practice b. legal research by taxpayers c. attorneys and CPAs working together in a practice d. all of the above
A
Under Statements on Standards for Tax Services No. 3, (SSTS No. 3) a CPA preparing a tax return should perform all of the actions EXCEPT: a. independently confirm the accuracy of the taxpayer's information b. obtain additional information if the taxpayer's information appears to be incorrect or incomplete c. review the prior year's return when feasible d. determine when conditions for a deduction have been met
A
The six principles of professional conduct under the AICPA Code include: a. responsibilities b. all of these are correct c. integrity d. public interest
B
Which of the following statements best describes Circular 230? a. Circular 230 has been adopted by the AICPA as its set of rules of practice for CPAs. b. Circular 230 is a set of Treasury Department ethical and legal standards for those engaging in practice before the IRS. c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from unfair discipline by the IRS. d. Circular 230 is a set of ethical rules for taxpayers.
B
A contingent fee is: a. always allowed by Circular 230 b. a fee that is out of line with the value of the service provided c. a fee based on a percentage of a taxpayer's refund on a tax return d. all of the above
C
According to Circular 230, the "best practices" rules are: a. mandatory for all tax practitioners b. restricted only to attorneys and CPAs c. aspirational, to act as goals for tax practitioners d. enforced by disbarment from practice before the IRS
C
Circular 230 includes rules on all of the following topics EXCEPT: a. who is authorized to practice before the IRS b. standards for "covered opinions" c. compliance with state ethical requirements d. a set of best practices to guide practitioners
C
Due diligence, in essence, means a tax practitioner: a. must be efficient in performing his duties b. must give due respect to IRS officials c. should use reasonable effort to comply with the tax laws d. should charge reasonable fees for work performed for a client
C
The Statements on Standards for Tax Services (SSTS) are issued by: a. the Internal Revenue Service b. the FASB c. the AICPA d. the American Bar Association e. the AICPA and the American Bar Association jointly
C
The Statements on Standards for Tax Services are: a. part of the ABA Code of Professional Responsibility b. intended to replace Circular 230 c. intended to supplement the AICPA Code of Professional Conduct and Circular 230 d. none of the above
C
In a closed transaction, the scope of tax planning is: a. more limited as compared to an open transaction b. limited by the IRS rules of practice c. limited to presenting the taxpayer's facts to the government in the most favorable, legal manner d. more limited as compared to an open transaction and limited to presenting the taxpayer's facts to the government in the most favorable, legal manner
D
The primary change made by the Sarbanes-Oxley Act which affects the practice of public accounting is: a. Public accounting firms may no longer provide any actuarial services. b. Accounting firms may no longer offer tax shelters. c. Auditors may never do tax compliance work for their clients. d. Public accounting firms may provide some nonaudit services to their audit clients if the services are approved in advance by an audit committee.
D
Under 2-2b rules, which of the following actions would constitute deceptive advertising? a. advertising too frequently b. implying that the CPA had the ability to influence an IRS official c. promising a favorable result without justification d. implying that the CPA had the ability to influence an IRS official and promising a favorable result without justification
D
Under Section 10.3, Subpart A, of Circular 230, the following individuals may practice before the IRS EXCEPT: a. enrolled agents b. enrolled retirement plan agents c. enrolled actuaries d. unenrolled agents
D
Who can represent a taxpayer before the IRS Appeals Office under Circular 230? a. A CPA b. An officer of a corporation may represent the corporation c. An attorney d. All of the above
D