IRS Representation Before the IRS 2 — Questions and Answers
Question 1: Which of the following individuals is NOT eligible to represent a taxpayer before the IRS as an enrolled agent?
- A CPA licensed in all 50 states
- An individual who passed all three parts of the Special Enrollment Examination
- An attorney admitted to practice before the U.S. Tax Court only (Correct answer)
- A former IRS employee granted enrollment based on technical experience
Correct answer: An attorney admitted to practice before the U.S. Tax Court only
An attorney admitted only to practice before the U.S. Tax Court does not automatically have unlimited representation rights before the IRS without being admitted to a state bar and in good standing.
Question 2: A power of attorney filed with the IRS on Form 2848 authorizes a representative to do all of the following EXCEPT:
- Receive and inspect confidential tax information
- Sign a consent to extend the statute of limitations
- Sign the taxpayer's original tax return (Correct answer)
- Execute a closing agreement on behalf of the taxpayer
Correct answer: Sign the taxpayer's original tax return
A Form 2848 power of attorney does not authorize a representative to sign an original tax return unless the taxpayer has a physical or mental impairment.
Question 3: Under Circular 230, a practitioner who discovers that a client made an error on a prior year return must:
- Immediately notify the IRS of the error without client consent
- Promptly advise the client of the error and the potential consequences (Correct answer)
- Withdraw from representation if the client refuses to correct the error
- File an amended return on behalf of the client without further discussion
Correct answer: Promptly advise the client of the error and the potential consequences
Circular 230 §10.21 requires the practitioner to promptly advise the client of the noncompliance, error, or omission and the consequences, but does not require the practitioner to notify the IRS.
Question 4: When may a suspended enrolled agent represent a taxpayer before the IRS?
- Only for matters involving tax years before the suspension
- Only with written consent from the Office of Professional Responsibility
- Never — suspended practitioners have no representation rights (Correct answer)
- Only as an unpaid volunteer through a Low Income Taxpayer Clinic
Correct answer: Never — suspended practitioners have no representation rights
A suspended enrolled agent may not practice before the IRS in any capacity during the period of suspension.
Question 5: A taxpayer wants to authorize their enrolled agent to receive their tax refund check. Which additional form must be filed with the IRS?
- Form 8821
- Form 2848 with the specific authority noted (Correct answer)
- Form 1310
- Form 8879
Correct answer: Form 2848 with the specific authority noted
The authority to receive a refund check must be specifically stated on Form 2848; it is not automatically granted and requires explicit notation in the acts authorized section.
Question 6: Which of the following best describes the scope of representation permitted by a Form 8821 Tax Information Authorization?
- Full unlimited representation before the IRS including signing documents
- Authority to receive and inspect confidential tax information only (Correct answer)
- Authority to represent the taxpayer in Tax Court proceedings
- Authority to negotiate installment agreements on behalf of the taxpayer
Correct answer: Authority to receive and inspect confidential tax information only
Form 8821 authorizes a designee only to inspect and/or receive confidential tax information; it does not grant authority to represent the taxpayer or take any actions before the IRS.
Question 7: Under Circular 230, which of the following is a practitioner required to do when a client provides information the practitioner knows to be false?
- Submit the information but attach a disclosure statement
- Correct the information without notifying the client
- Withdraw from the engagement after notifying the client of the conflict
- Refuse to use the information and advise the client accordingly (Correct answer)
Correct answer: Refuse to use the information and advise the client accordingly
A practitioner must not submit documents containing information the practitioner knows to be false, and must advise the client that the information cannot be used as presented.
IRS Representation Before the IRS 2
Which of the following individuals is NOT eligible to represent a taxpayer before the IRS as an enrolled agent?