IRS Tax Professionals 2

Question 1

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?

Accepted Answer

Represent the client only before the IRS Examination Division where the CPA prepared the return

Answer

CPAs may represent clients before any IRS division or office, including Examination, Collections, and Appeals, as they are practitioners under Circular 230.

Question 2

Under Circular 230, a practitioner who has a conflict of interest may still represent multiple clients if:

Accepted Answer

All affected clients give informed written consent and the representation is not prohibited by law

Answer

Circular 230 §10.29 allows representation despite conflicts if all affected clients give informed written consent and the law does not prohibit it.

Question 3

Which IRS form must an enrolled agent file to renew their enrollment status?

Accepted Answer

Form 8554

Answer

Form 8554 is the Application for Renewal of Enrollment to Practice Before the Internal Revenue Service used by enrolled agents.

Question 4

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:

Accepted Answer

An unreasonable position or willful/reckless conduct

Answer

IRC §6694 imposes penalties on preparers for understatements due to unreasonable positions (§6694(a)) or willful/reckless conduct (§6694(b)).

Question 5

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?

Accepted Answer

Employer Shared Responsibility Payment under IRC §4980H

Answer

The Employer Shared Responsibility Payment under IRC §4980H applies to applicable large employers who fail to offer adequate minimum essential coverage.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Tax Professionals 2