Client Relations Flashcards

Under Circular 230 §10.27, when may a practitioner charge a contingent fee?

Answer: For services connected with an IRS examination of an original return

Contingent fees are allowed for services connected with an IRS examination or challenge to an original return, among a few other narrow exceptions.

An amended return qualifies for a contingent fee under §10.27 if it is filed within how many days of the taxpayer receiving a written notice of examination?

Answer: 120 days

Circular 230 allows contingent fees on amended returns or refund claims filed within 120 days of the examination notice.

A client asks whether conversations with their tax coach (an enrolled agent) are privileged in a criminal tax investigation. Which answer is correct?

Answer: No, §7525 privilege does not apply to criminal tax matters

The federally authorized tax practitioner privilege under §7525 covers only noncriminal tax matters before the IRS or in federal court.

What is the main purpose of a discovery or intake meeting with a prospective tax coaching client?

Answer: To learn the client's goals, finances, and pain points so planning opportunities can be found

Discovery meetings collect the information needed to spot strategies and set a value-based fee.

Which practice best keeps a tax planning client engaged throughout the year?

Answer: Scheduled check-ins to review how the strategies are being implemented and whether circumstances have changed

Proactive, scheduled follow-up makes sure strategies are carried out and adjusted, which is central to tax coaching.

Under Circular 230 §10.34, what must a practitioner tell a client about a position taken on a return?

Answer: Any penalties reasonably likely to apply and how to avoid them through disclosure

Section 10.34(c) requires practitioners to advise clients of potential penalties and of the opportunity to avoid them through disclosure.

If a §7216 consent form does not state how long it lasts, how long does it remain valid?

Answer: One year from the date it was signed

Under the §7216 regulations, a consent with no stated duration is valid for one year from the date it was signed.