Ethical and Professional Responsibilities Flashcards

A CTRS practitioner discovers that a client provided falsified documents during the tax resolution process. What is the practitioner's primary obligation?

Answer: Withdraw from representation and, if required by law, take steps to avoid furthering the fraud

A practitioner must withdraw from representation when a client commits fraud, and must take legally required steps to avoid furthering the fraudulent conduct.

Under Circular 230, which of the following constitutes 'disreputable conduct' that could result in sanctions?

Answer: Willfully failing to e-file returns when required

Willfully failing to e-file returns when required by the IRS constitutes disreputable conduct under Circular 230.

A client asks their CTRS practitioner to prepare a tax return that claims a deduction the practitioner believes has no legal basis. The practitioner should:

Answer: Only prepare the return if there is at least a reasonable basis for the position

Under Circular 230, a practitioner may only prepare a return with a tax position if there is at least a reasonable basis for that position.

Which duty does a CTRS practitioner owe to future clients when accepting a new engagement?

Answer: Duty to check for conflicts of interest before accepting the engagement

Before accepting a new engagement, a practitioner must perform a conflicts-of-interest check to ensure no adverse representation issues exist.

A CTRS practitioner is representing a taxpayer in an Offer in Compromise. The taxpayer asks the practitioner to omit some assets from the OIC application. The practitioner should:

Answer: Refuse to omit assets and explain that accurate disclosure is required

Practitioners must ensure OIC applications are accurate and complete; omitting assets constitutes fraud and violates Circular 230.

What is the maximum period a non-attorney CTRS practitioner is generally required to retain client records after the conclusion of a matter?

Answer: 3 years

Circular 230 generally requires practitioners to retain records related to their practice for a period of three years.

A CTRS practitioner receives a subpoena for a client's tax records held in the practitioner's file. The practitioner should first:

Answer: Notify the client and seek legal guidance before producing records

Upon receiving a subpoena, the practitioner should notify the client and seek legal guidance to determine what may be protected by privilege before complying.