Ethics & Professional Conduct Flashcards

Which standard needs the highest likelihood of a position being sustained on its merits?

Answer: More likely than not

More likely than not means a greater-than-50% chance, which is above substantial authority and reasonable basis.

Under IRC §6694(b), what is the penalty for a preparer's willful or reckless understatement?

Answer: The greater of $5,000 or 75% of the income derived

Willful or reckless conduct draws the greater of $5,000 or 75% of the income derived from the return or claim.

Which credits and status does the §6695(g) preparer due-diligence requirement cover?

Answer: EITC, Child Tax Credit/ACTC/ODC, AOTC, and head of household status

Section 6695(g) covers EITC, CTC/ACTC/ODC, AOTC, and HOH filing status, documented on Form 8867.

Under Circular 230 §10.36, who must take reasonable steps to make sure the firm has adequate procedures for Circular 230 compliance?

Answer: Practitioners with principal authority for overseeing the firm's federal tax practice

Section 10.36 puts this responsibility on practitioners with principal authority and responsibility for the firm's tax practice.

A practitioner repeatedly delays responding to IRS information requests with no good reason. Which Circular 230 section is most directly implicated?

Answer: §10.23 prompt disposition of pending matters

Section 10.23 bars unreasonably delaying the prompt disposition of any matter before the IRS.

Which preparer is limited to representing only the clients whose returns they prepared and signed during the period covered?

Answer: AFSP Record of Completion holder

Annual Filing Season Program participants have limited representation rights covering only returns they prepared and signed.

Under IRC §6713, what is the civil penalty for each unauthorized disclosure or use of taxpayer information by a preparer?

Answer: $250 per disclosure, up to $10,000 a calendar year

Section 6713 imposes $250 per unauthorized disclosure or use, capped at $10,000 per calendar year (higher for identity-theft cases).