CTC Regulatory Framework & Compliance 3

Question 1

A tax professional who is not an attorney, CPA, or enrolled agent may represent taxpayers before the IRS only:

Accepted Answer

During an examination of a return they prepared, before the examining agent only

Answer

Unenrolled preparers with limited practice rights may represent taxpayers only in examinations of returns they signed, and only before the IRS examination division.

Question 2

Which IRS program allows qualifying low-income taxpayers and those with English as a second language to obtain free tax representation?

Accepted Answer

Low Income Taxpayer Clinic (LITC)

Answer

Low Income Taxpayer Clinics (LITCs) represent qualifying taxpayers in disputes with the IRS and provide education on taxpayer rights.

Question 3

Under the 'return of client records' provisions of Circular 230, a practitioner who is discharged before completing services must:

Accepted Answer

Promptly return all records needed by the client to comply with tax obligations

Answer

Circular 230 §10.28 requires that upon termination, a practitioner must return all client records necessary for compliance, regardless of any fee dispute.

Question 4

The Foreign Account Tax Compliance Act (FATCA) requires U.S. persons to report foreign financial accounts exceeding what threshold on Form 8938?

Accepted Answer

$50,000 at year-end or $75,000 at any point during the year (single filers)

Answer

For single filers living in the U.S., Form 8938 is required when foreign financial assets exceed $50,000 at year-end or $75,000 at any time during the year.

Question 5

An IRS Notice of Deficiency (statutory notice) gives a taxpayer how many days to petition the Tax Court?

Accepted Answer

90 days

Answer

A taxpayer has 90 days from the date of a Notice of Deficiency (150 days if addressed outside the U.S.) to petition the Tax Court.

(CTC) Chartered Tax Consultant Practice Test

(CTC) Chartered Tax Consultant Practice Test

CTC Regulatory Framework & Compliance 3