Ethical and Professional Responsibilities Flashcards

A CTRS practitioner represents a married couple filing jointly who are now disputing their liability with each other. The practitioner realizes there is a conflict of interest. What should the practitioner do?

Answer: Withdraw from joint representation and advise each spouse to seek separate counsel

When a conflict of interest arises between jointly represented clients, the practitioner must withdraw from representing both and advise each to obtain independent representation.

Which of the following best describes the 'due diligence' standard imposed on CTRS practitioners under Circular 230?

Answer: A practitioner must make reasonable inquiries to ensure information submitted is accurate and complete

Due diligence requires practitioners to make reasonable inquiries to ensure submissions are accurate, though independent verification of every client document is not always required.

A CTRS practitioner unknowingly submits an incorrect Form 433-A to the IRS. Upon discovering the error, the practitioner should:

Answer: Promptly notify the client and advise them to correct the submission

Upon discovering an error in a submission, the practitioner must promptly notify the client and advise them of the steps needed to correct it.

Which Treasury Circular governs the practice of representatives before the IRS, including CTRS practitioners?

Answer: Circular 230

Treasury Circular 230 governs the practice of attorneys, CPAs, enrolled agents, and other practitioners before the IRS.

A CTRS practitioner is aware that their client has an undisclosed foreign bank account. The client refuses to disclose it on the OIC application. The practitioner should:

Answer: Advise the client of the legal requirements and withdraw if the client refuses to comply

A practitioner cannot submit a knowingly incomplete OIC; when a client refuses to correct an omission, the practitioner must withdraw from the representation.

Under Circular 230, which sanction can the IRS Office of Professional Responsibility NOT impose on a practitioner?

Answer: Criminal imprisonment

The OPR can censure, suspend, or disbar practitioners, but criminal imprisonment is a judicial remedy imposed by courts, not the OPR.

A CTRS practitioner is approached by a former client's adversary in a tax dispute involving information the practitioner learned during the prior representation. The practitioner should:

Answer: Decline the engagement due to the conflict created by confidential information from prior representation

Using confidential information obtained during prior representation against a former client creates a conflict of interest that prohibits the new engagement without informed consent.