IRS Ethics and Practice Procedures 4

Question 1

Under Circular 230, a practitioner who is the subject of a disciplinary proceeding has the right to:

Accepted Answer

Receive a written complaint, respond in writing, and request a hearing

Answer

Due process in Circular 230 disciplinary proceedings requires written notice of charges, an opportunity to respond, and the right to a hearing before an administrative law judge.

Question 2

Which of the following is a practitioner required to do when an IRS officer requests the identity of a client for whom the practitioner filed a return?

Accepted Answer

Provide the client's identity because tax return preparer information is not privileged

Answer

Under IRC §7525 the federally authorized tax practitioner privilege does not protect client identity, which must be disclosed when properly requested.

Question 3

A client directs an enrolled agent to use an aggressive but non-frivolous tax position. The enrolled agent may:

Accepted Answer

Take the position as long as there is a reasonable basis for it and disclose if required

Answer

A practitioner may advance a non-frivolous position that has at least a reasonable basis, and must disclose the position on the return if required by the tax code.

Question 4

The term 'practice before the IRS' as defined in Circular 230 includes all of the following EXCEPT:

Accepted Answer

Preparing a tax return without signing it as paid preparer

Answer

Merely preparing a tax return without representing the taxpayer before the IRS does not constitute 'practice before the IRS' under Circular 230 §10.2.

Question 5

Under Circular 230, solicitation by a practitioner is prohibited if it is:

Accepted Answer

False, misleading, or deceptive

Answer

Circular 230 §10.30 prohibits solicitations that are false, misleading, or deceptive; truthful and non-deceptive advertising and solicitation is generally permitted.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Ethics and Practice Procedures 4