Client Relations Flashcards

A tax coach discovers that a new client failed to report income on a prior-year return. Under Circular 230 §10.21, what must the coach do?

Answer: Promptly advise the client of the omission and its consequences

Section 10.21 requires the practitioner to promptly advise the client of the noncompliance, error, or omission and its consequences.

A client disputes a planning fee and demands their original records. Under Circular 230 §10.28, what applies?

Answer: The coach must promptly return records the client needs to meet federal tax obligations, though the coach may keep copies

Section 10.28 requires the prompt return of client records needed for federal tax compliance, even when a fee dispute exists.

Two spouses going through a divorce both want the same tax coach to plan their separate post-divorce tax positions. What does Circular 230 require before going ahead?

Answer: Informed consent from each affected client, confirmed in writing

Under §10.29, every affected client must waive the conflict with informed consent confirmed in writing.

Which document best protects a tax coach from scope creep during a planning engagement?

Answer: A detailed engagement letter defining deliverables and exclusions

An engagement letter sets out the services included and excluded, so expectations are documented.

A coach wants to use client tax return information to market an unrelated investment product. Under IRC §7216, what is required?

Answer: Written consent from the client before the information is used

Section 7216 bars preparers from using tax return information for purposes other than return preparation without the taxpayer's prior written consent.

When a tax coach presents a tax plan, which framing best shows the plan's value to a client?

Answer: The projected tax savings compared with the planning fee (ROI)

Tax coaching stresses value pricing, where the fee is justified by the savings it produces.

How long must a practitioner keep the written conflict-of-interest consents obtained under Circular 230 §10.29?

Answer: 36 months from the end of the representation

Section 10.29 requires practitioners to keep written conflict waivers for at least 36 months after the representation ends.