Client Relations Flashcards

Which element is least likely to belong in a tax coaching engagement letter?

Answer: A guarantee that the IRS will accept every strategy

Practitioners should never guarantee outcomes; engagement letters set out scope, fees, and responsibilities.

What is the criminal penalty under IRC §7216 for knowingly or recklessly disclosing tax return information without consent?

Answer: A misdemeanor with a fine of up to $1,000 and/or up to one year in prison

Section 7216 makes unauthorized disclosure a misdemeanor punishable by up to $1,000 and/or one year of imprisonment.

A long-time client's spouse calls asking about the client's separately filed return. What should the coach do?

Answer: Decline to discuss it without the client's authorization

Return information on a separately filed return is confidential and cannot be disclosed without the taxpayer's consent.

What does a tiered service model (e.g., basic, advanced, premium planning) mainly do for client relations?

Answer: Lets clients pick a level of service that matches their needs and budget

Tiered packages make the value clear and let clients choose an appropriate level of service.

A client asks the coach to backdate a document to qualify for a deduction. What should the coach do?

Answer: Refuse, because it would mean participating in a false submission

Backdating documents to obtain a tax benefit is fraudulent and violates Circular 230 and federal law.

Which client communication practice best reduces disputes over fees?

Answer: Agreeing on fixed or value-based fees in writing before work begins

Agreeing on the fee in writing at the start removes surprises and builds trust.

A tax coach realizes they lack the expertise for a client's complex international issue. Under Circular 230 §10.35, what should they do?

Answer: Become competent through study, consult a qualified expert, or refer the client

Section 10.35 requires competence, which can be gained through study or consultation, or the matter can be referred.