IRS Ethics and Practice Procedures 3

Question 1

A practitioner who receives a subpoena for client records during a grand jury investigation should first:

Accepted Answer

Consult with the client and consider asserting applicable privileges

Answer

The practitioner must consult with the client and evaluate applicable privileges (e.g., attorney-client or Kovel arrangement) before producing records.

Question 2

Under Circular 230, a practitioner must keep copies of written advice for how long after the date the advice is rendered?

Accepted Answer

3 years

Answer

Circular 230 §10.37 requires practitioners to retain copies of written advice and the documents on which it is based for at least three years.

Question 3

Which of the following would constitute 'disreputable conduct' under Circular 230 §10.51?

Accepted Answer

Willfully assisting a client in evading federal tax

Answer

Willfully assisting, counseling, or encouraging tax evasion is explicitly listed as disreputable conduct under Circular 230 §10.51(a)(4).

Question 4

A practitioner may NOT use the title 'enrolled agent' in an advertisement unless:

Accepted Answer

The practitioner is currently enrolled to practice before the IRS

Answer

Only practitioners who are currently enrolled to practice before the IRS may use the 'enrolled agent' designation; using it after enrollment lapses is prohibited.

Question 5

Under best practices outlined in Circular 230 §10.33, a practitioner should communicate with the client regarding:

Accepted Answer

The terms and scope of the engagement, relevant facts, and applicable law

Answer

Best practices require clear communication about the scope of the engagement, relevant facts, and applicable law so the client can make informed decisions.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Ethics and Practice Procedures 3