Regulatory Compliance Flashcards

Under Circular 230 §10.28, what must a practitioner generally do when a client requests their records?

Answer: Return the client's records needed for compliance, even if a fee dispute exists

Section 10.28 requires returning records necessary for the client's compliance with federal tax obligations, even during a fee dispute, though the practitioner may keep copies.

Which sanctions may the IRS Office of Professional Responsibility impose under Circular 230 §10.50?

Answer: Censure, suspension, disbarment, and monetary penalties

Section 10.50 authorizes censure, suspension, or disbarment from practice before the IRS, as well as monetary penalties.

What is the civil penalty rate for civil fraud under IRC §6663?

Answer: 75% of the underpayment due to fraud

Section 6663 imposes a penalty equal to 75% of the portion of the underpayment attributable to fraud.

Under IRC §6511, what is the general deadline for a taxpayer to file a refund claim?

Answer: The later of 3 years from filing the return or 2 years from paying the tax

A refund claim generally must be filed within 3 years from the time the return was filed or 2 years from when the tax was paid, whichever is later.

Which form must a material advisor file to disclose a reportable transaction to the IRS?

Answer: Form 8918

Material advisors file Form 8918, while taxpayers participating in the transaction file Form 8886.

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?

Answer: IRC §6701

Section 6701 imposes a penalty for aiding and abetting an understatement: $1,000 per document, or $10,000 if it relates to a corporation's tax.

An Enrolled Agent must complete how many continuing education hours per three-year enrollment cycle?

Answer: 72 hours, with at least 16 per year including 2 hours of ethics

Enrolled Agents need 72 CE hours per enrollment cycle, with a minimum of 16 hours each year, 2 of which must be ethics.