CTRS Ethical and Professional Responsibilities 2

Question 1

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

Accepted Answer

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

Answer

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

Question 2

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

Accepted Answer

Willfully failing to e-file returns when required

Answer

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

Question 3

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:

Accepted Answer

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

Answer

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.

Question 4

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

Accepted Answer

Duty to check for conflicts of interest before accepting the engagement

Answer

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

Question 5

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:

Accepted Answer

Refuse to omit assets and explain that accurate disclosure is required

Answer

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

(CTRS) Certified Tax Resolution Specialist Practice Test

(CTRS) Certified Tax Resolution Specialist Practice Test

CTRS Ethical and Professional Responsibilities 2