Tax Professionals Flashcards
7 cards from real IRS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Tax Professionals flashcards as text
A CPA who is not enrolled to practice before the IRS wants to represent a client in an audit. Under Circular 230, which of the following is permitted?
Answer: Represent the client only before the IRS Examination Division where the CPA prepared the return
CPAs may represent clients before any IRS division or office, including Examination, Collections, and Appeals, as they are practitioners under Circular 230.
Under Circular 230, a practitioner who has a conflict of interest may still represent multiple clients if:
Answer: All affected clients give informed written consent and the representation is not prohibited by law
Circular 230 §10.29 allows representation despite conflicts if all affected clients give informed written consent and the law does not prohibit it.
Which IRS form must an enrolled agent file to renew their enrollment status?
Answer: Form 8554
Form 8554 is the Application for Renewal of Enrollment to Practice Before the Internal Revenue Service used by enrolled agents.
A tax preparer signs a return as a paid preparer but deliberately understates a client's tax liability to generate a larger refund. Under IRC §6694, the preparer faces a penalty if the understatement is due to:
Answer: An unreasonable position or willful/reckless conduct
IRC §6694 imposes penalties on preparers for understatements due to unreasonable positions (§6694(a)) or willful/reckless conduct (§6694(b)).
Under the Affordable Care Act, what is the penalty for an employer with 50 or more full-time equivalent employees who fails to offer minimum essential coverage?
Answer: Employer Shared Responsibility Payment under IRC §4980H
The Employer Shared Responsibility Payment under IRC §4980H applies to applicable large employers who fail to offer adequate minimum essential coverage.
A practitioner discloses confidential client information to a third party without consent. Under Circular 230, this is permissible only when:
Answer: Required by law or the client provides written consent
Circular 230 §10.20 requires practitioners to keep client information confidential unless disclosure is required by law or authorized by the client.
Which of the following best describes the 'best practices' standard under Circular 230 §10.33?
Answer: Aspirational guidelines encouraging high-quality, ethical tax practice
Circular 230 §10.33 outlines best practices as aspirational guidelines for tax professionals, not mandatory rules with direct penalties.