Tax Consulting Registered Tax Return Preparer 2

Question 1

Which IRS competency exam was historically required to become a Registered Tax Return Preparer (RTRP)?

Accepted Answer

The RTRP test covering Form 1040 series and ethics

Answer

The CPA Uniform Exam

Answer

The Enrolled Agent Special Enrollment Exam

Answer

The bar examination

Question 2

A taxpayer's filing status is 'Married Filing Jointly.' What is the standard deduction concept a preparer must apply?

Accepted Answer

A fixed dollar amount that reduces taxable income

Answer

A credit subtracted directly from tax owed

Answer

A penalty for joint filing

Answer

An additional tax on combined income

Question 3

Which form does a preparer use to report self-employment income and expenses for a sole proprietor?

Accepted Answer

Schedule C

Answer

Schedule A

Answer

Schedule D

Answer

Schedule E

Question 4

What is the purpose of a PTIN for a paid tax return preparer?

Accepted Answer

It identifies the preparer on returns they prepare for compensation

Answer

It replaces the taxpayer's SSN

Answer

It is a state business license

Answer

It authorizes e-filing without an EFIN

Question 5

A client reports gambling winnings. How must a preparer treat them?

Accepted Answer

As taxable income reported in full, with losses deductible only if itemizing

Answer

As tax-exempt income

Answer

As capital gains only

Answer

As self-employment income subject to SE tax

Question 6

Which credit is refundable, meaning it can produce a refund beyond tax liability?

Accepted Answer

Earned Income Tax Credit

Answer

Foreign Tax Credit

Answer

Lifetime Learning Credit

Answer

Child and Dependent Care Credit

Question 7

Under Circular 230, what must a preparer do upon learning of a client's prior-year error or omission?

Accepted Answer

Promptly advise the client of the error and its consequences

Answer

Correct it secretly without telling the client

Answer

Report the client to the IRS immediately

Answer

Ignore it unless the IRS asks