IRS Tax Professionals 3

Question 1

An enrolled agent is suspended from practice before the IRS. During the suspension period, the EA may:

Accepted Answer

Not engage in any practice before the IRS, including return preparation for compensation

Answer

A suspended practitioner is disbarred from all practice before the IRS, which includes preparing returns for compensation under Circular 230.

Question 2

Under IRC §7216, a tax return preparer who knowingly or recklessly discloses tax return information without client consent may be subject to:

Accepted Answer

Criminal penalties including fines up to $1,000 and up to one year imprisonment

Answer

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.

Question 3

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?

Accepted Answer

Advise the client that delaying filing may result in failure-to-file penalties and interest

Answer

The EA must advise the client of the potential failure-to-file penalties and interest that accrue from delaying filing past the due date.

Question 4

Which of the following is a valid basis for the IRS to initiate disciplinary proceedings against a practitioner under Circular 230?

Accepted Answer

The practitioner willfully failed to file their own federal tax returns

Answer

Willful failure to file one's own federal tax returns is grounds for disciplinary action against practitioners under Circular 230 §10.51.

Question 5

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:

Accepted Answer

Promptly advise the client of the error and the consequences of not correcting it

Answer

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.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS Tax Professionals 3