IRS - Internal Revenue Service Certified Individual Taxpayer Data Questions and Answers

Question 1

An IRS employee is working remotely and needs to access Federal Tax Information (FTI) to complete their duties. According to IRS Publication 1075, which of the following is a required security measure for the remote work location?

Accepted Answer

Ensuring all computers and electronic media containing FTI are kept in a secured area under the employee's immediate control or locked up.

Answer

IRS Publication 1075 extends its physical security requirements to telework locations. It mandates that all computers, electronic media, and removable media containing FTI must be kept in a secured area under the immediate protection and control of the authorized employee or be securely locked up when not in use.

Question 2

A tax preparer knowingly sells a client's name and income information to a marketing firm without the client's consent. Under the Internal Revenue Code, what is the most severe criminal penalty the preparer could face for this unauthorized disclosure?

Accepted Answer

A felony charge with a fine up to $5,000 and/or up to 5 years in prison.

Answer

Internal Revenue Code Section 7213 makes the willful unauthorized disclosure of returns or return information a felony. This is punishable by a fine of up to $5,000 and/or imprisonment of not more than 5 years. While other penalties like civil fines and loss of credentials may also apply, the question asks for the most severe criminal penalty.

Question 3

A state agency receives Federal Tax Information (FTI) from the IRS to administer a specific social assistance program as authorized by IRC Section 6103. Which of the following actions by the state agency would be considered improper?

Accepted Answer

Sharing the FTI with a different state agency to verify eligibility for an unrelated program.

Answer

FTI is obtained under specific disclosure authorities in IRC Section 6103 and cannot be shared across programs or with other agencies for unauthorized uses without explicit permission from the IRS. Sharing the data for an unrelated program would be a violation of the terms under which the data was received.

Question 4

What is the general rule regarding the confidentiality of tax returns and return information as established by Internal Revenue Code (IRC) Section 6103?

Accepted Answer

Returns and return information are confidential and cannot be disclosed by the IRS unless authorized by the taxpayer or a specific provision in the Code.

Answer

IRC Section 6103(a) establishes the fundamental rule that returns and return information are confidential. It prohibits IRS employees and other authorized recipients from disclosing this information unless a specific exception within the statute applies or the taxpayer provides consent.

Question 5

A junior accountant at a firm is curious about the financial details of a local celebrity whose tax return is being prepared by a senior partner. The junior accountant accesses the client's electronic file on the firm's server just to look, without disclosing the information to anyone. Which of the following is true?

Accepted Answer

This action constitutes an unauthorized inspection (UNAX) and is a punishable offense.

Answer

IRC Section 7213A specifically addresses the unauthorized inspection of returns or return information (UNAX). It is unlawful for any authorized viewer to willfully inspect tax information for an unauthorized purpose, even if there is no subsequent disclosure. This is a misdemeanor punishable by fines and/or imprisonment.

(IRS) Internal Revenue Service Certified Practice Test

(IRS) Internal Revenue Service Certified Practice Test

IRS - Internal Revenue Service Certified Individual Taxpayer Data Questions and Answers