Tax Preparation Tax Forms and Procedures 3

Question 1

Electronic filing (e-file) requires returns to be accepted or rejected within how many days by the IRS?

Accepted Answer

24–48 hours

Answer

1 day

Answer

5 business days

Answer

10 business days

Question 2

Form 8867 must be completed by a paid tax preparer who claims which credits for a client?

Accepted Answer

EITC, CTC, AOTC, and Head of Household

Answer

Child Tax Credit only

Answer

All credits on Schedule 3

Answer

Education credits only

Question 3

A taxpayer owes $3,000 in taxes but cannot pay. What is the best first step?

Accepted Answer

File the return on time and pay what they can, then request a payment plan

Answer

Ignore the bill until the IRS contacts them

Answer

File for an extension to delay payment

Answer

File a bankruptcy petition

Question 4

An Offer in Compromise (OIC) allows a taxpayer to:

Accepted Answer

Settle their tax debt for less than the full amount owed

Answer

Delay filing their return for up to two years

Answer

Avoid all penalties permanently

Answer

Convert their tax debt to a loan

Question 5

Which IRS notice is sent when a taxpayer has an unpaid balance and the IRS intends to levy?

Accepted Answer

CP504

Answer

CP14

Answer

CP2000

Answer

CP11

Question 6

A tax preparer who prepares more than 11 returns in a year is required to do what?

Accepted Answer

File all returns electronically (e-file mandate)

Answer

Apply for an EFIN

Answer

Become a CPA

Answer

Register with the state tax board