CTC Cheat Sheet 2026

The 30 highest-yield CTC facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Form 8821 authorizes a designee to do what? → Receive and inspect the taxpayer's confidential tax information
2. Which IRC section penalizes anyone who aids or assists in preparing a document they know will result in an understatement of another person's tax? → IRC §6701
3. Why is the Cohan rule a weak fallback for a client's undocumented vehicle and travel deductions? → Section 274(d) strict substantiation overrides Cohan estimates for those expenses
4. A Roth IRA is subject to income phase-out limits for contributions. For 2024, the phase-out begins for single filers at a MAGI of: → $146,000
5. A client sells a rental property for a large gain and takes payments over 10 years. Which provision lets the client spread the gain recognition? → The Section 453 installment method
6. Which form does an individual use to amend a previously filed Form 1040? → Form 1040-X
7. What rate does the Net Investment Income Tax (NIIT) impose on passive rental income for high-income taxpayers? → 3.8%
8. What is the primary risk of the 'pro-rata rule' when executing a backdoor Roth IRA conversion? → Pre-tax IRA balances make the conversion partially taxable
9. How long must a practitioner keep written conflict-of-interest consents under §10.29? → 36 months from the end of the representation
10. Under Circular 230 §10.21, what must a practitioner do upon learning that a client has made an error or omission on a previously filed return? → Promptly advise the client of the noncompliance and its consequences
11. An investor borrows on margin to buy taxable bonds. How is the deductible investment interest expense limited? → To net investment income, with any excess carried forward
12. A security becomes completely worthless during the year. When is the loss treated as occurring? → The last day of the tax year in which it became worthless
13. Interest on which investment is exempt from state and local income tax but subject to federal income tax? → U.S. Treasury bonds
14. Which skill is most important for successful advisory interactions? → Clear and effective communication
15. What continuing education requirement supports risk assessment competence? → Ongoing education in regulatory changes, market developments, and best practices
16. Which asset is generally best placed in a taxable brokerage account under an asset-location strategy? → Broad-market equity index ETF
17. What is the main purpose of a professional code of ethics? → To guide ethical behavior
18. What is the consequence of willfully failing to file a tax return? → Possible criminal charges
19. When superfunding a 529 plan, a donor may elect to treat a lump-sum contribution as made ratably over how many years for gift tax annual exclusion purposes? → 5 years
20. A planning strategy has no meaningful non-tax purpose and does not change the client's economic position. Which doctrine allows the IRS to disallow it? → Economic substance doctrine, IRC §7701(o)
21. When planning the sale of a closely held business, which approach allows the selling shareholder to spread taxable gain over multiple years? → Installment sale method under Section 453
22. How should conflicts of interest be managed in portfolio management? → Identify, disclose, and mitigate all actual and potential conflicts of interest
23. What penalty applies to an undisclosed transaction that lacks economic substance under IRC 7701(o)? → 40%
24. What is the deadline for filing individual federal tax returns in the U.S.? → April 15
25. A long-time client's spouse calls asking about the client's separately filed return. What should the coach do? → Decline to discuss it without the client's authorization
26. Which form lets a qualified practitioner represent a taxpayer before the IRS? → Form 2848
27. What regulatory compliance requirement applies to risk assessment? → Full compliance with all applicable federal, state, and industry regulations
28. In which situation does the IRS have NO time limit to assess tax? → The taxpayer filed a false or fraudulent return with intent to evade tax
29. Which statement best describes how Section 1256 contracts, such as regulated futures, are taxed? → 60% long-term and 40% short-term, marked to market at year-end
30. A client asks whether conversations with their tax coach (an enrolled agent) are privileged in a criminal tax investigation. Which answer is correct? → No, §7525 privilege does not apply to criminal tax matters