CTC Ethics, Standards & IRS Representation 3

Question 1

Which IRS notice initiates the formal Appeals process after an examination and gives the taxpayer 30 days to respond?

Accepted Answer

30-Day Letter (Letter 525)

Answer

The 30-Day Letter (Letter 525) follows an examination and gives the taxpayer 30 days to request a conference with IRS Appeals before a statutory notice is issued.

Question 2

Under Circular 230, which conduct subjects a practitioner to immediate suspension without a prior disciplinary hearing?

Accepted Answer

Being convicted of a felony involving dishonesty or breach of trust

Answer

Circular 230 §10.82 authorizes expedited suspension for practitioners convicted of crimes involving dishonesty, breach of trust, or certain tax offenses without a full prior hearing.

Question 3

A taxpayer and the IRS reach a closing agreement under IRC §7121. What is the legal effect of this agreement?

Accepted Answer

It is final and conclusive, binding on both the taxpayer and the government

Answer

A closing agreement under IRC §7121 is final and conclusive for the tax years covered and cannot be reopened except upon a showing of fraud, malfeasance, or misrepresentation.

Question 4

Which of the following statements about IRS installment agreements is CORRECT?

Accepted Answer

A taxpayer can request an installment agreement using Form 9465

Answer

Form 9465, Installment Agreement Request, is the standard form individuals use to request a payment plan for tax debts with the IRS.

Question 5

When representing a client before the IRS, a CTC receives a subpoena for client documents. Under what circumstances may attorney-client privilege apply?

Accepted Answer

Tax advice privilege under IRC §7525 protects federally authorized tax practitioners in non-criminal matters

Answer

IRC §7525 extends a limited privilege (similar to attorney-client privilege) to federally authorized tax practitioners for tax advice in non-criminal proceedings.

(CTC) Chartered Tax Consultant Practice Test

(CTC) Chartered Tax Consultant Practice Test

CTC Ethics, Standards & IRS Representation 3