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
An enrolled agent is suspended from practice before the IRS. During the suspension period, the EA may:
Answer: Not engage in any practice before the IRS, including return preparation for compensation
A suspended practitioner is disbarred from all practice before the IRS, which includes preparing returns for compensation under Circular 230.
Under IRC §7216, a tax return preparer who knowingly or recklessly discloses tax return information without client consent may be subject to:
Answer: Criminal penalties including fines up to $1,000 and up to one year imprisonment
IRC §7216 makes unauthorized disclosure of tax return information a federal criminal offense punishable by fines up to $1,000 and/or up to one year imprisonment.
A client asks their enrolled agent to delay sending a completed return to the IRS so the client can pay the balance due later. What should the EA do?
Answer: Advise the client that delaying filing may result in failure-to-file penalties and interest
The EA must advise the client of the potential failure-to-file penalties and interest that accrue from delaying filing past the due date.
Which of the following is a valid basis for the IRS to initiate disciplinary proceedings against a practitioner under Circular 230?
Answer: The practitioner willfully failed to file their own federal tax returns
Willful failure to file one's own federal tax returns is grounds for disciplinary action against practitioners under Circular 230 §10.51.
A tax professional discovers an error on a client's prior-year return after the client has already filed it. Under Circular 230, the practitioner's obligation is to:
Answer: Promptly advise the client of the error and the consequences of not correcting it
Circular 230 §10.21 requires practitioners to promptly advise clients of errors and the consequences of failure to correct them, but the decision to amend belongs to the client.
The IRS Office of Professional Responsibility (OPR) has jurisdiction over which of the following?
Answer: Attorneys, CPAs, enrolled agents, and enrolled retirement plan agents practicing before the IRS
OPR enforces Circular 230 standards for all practitioners who practice before the IRS, including attorneys, CPAs, enrolled agents, and enrolled retirement plan agents.
Under Circular 230, a practitioner may NOT charge a contingent fee for:
Answer: Preparation of an original tax return
Circular 230 §10.27 generally prohibits contingent fees for preparing original returns; contingent fees are allowed in limited circumstances such as examination of returns already filed.