1.1 - Circular 230 Flashcards
Circular 230
Identify the 3 parties involved in Federal Taxation
- U.S. Congress
- U.S Treasury
- IRS
Circular 230
What part does the U.S. Congress play in Federal Taxation?
- Write the laws saying what is or isn’t taxable and how much tax should be paid
Circular 230
What part does the U.S Treasury play in federal taxation?
Collect taxes owed
Circular 230
What part does the IRS play in federal taxation?
- Write the laws saying what is or isn’t taxable and how much tax should be paid
Circular 230
What does “practicing before the IRS” entail?
- Communicating with the IRS
- Representing before IRS
- Document prep and filing for another person
- Rendering written tax advice
Circular 230
Identify the 3 exclusions that are not subject to Circular 230
- Preparing return, amended or claim for refund
- Furnishing info upon request
- Appearing as a witness
Circular 230
Identify the parties authorized to practice before the IRS
- Attorneys
- CPA’s
- Enrolled agents
- Other specifically permitted (limited authority)
- Immediate family
- Employees
- Enrolled retirement agents
- Enrolled actuaries
Circular 230
Define the “written declaration” that CPA’s must provide to the IRS
- CPA must file stating they are qualified, authorized to represent and not suspended or disbarred
Circular 230
Identify the rules of conduct under Circular 230 part # 10
- qualifications - must be qualified
- conflicts of interest
- competence
- diligence
- reliance on another practitioner’s work
- unreasonable delays
Circular 230
What steps must a CPA take when representing two parties that have a conflict of interest according to Rules of Conduct Circular 230 part # 10?
- Parties must consent
- CPA must acquire written consent within 30 days of informed consent
- Representation must not be prohibited by law
- Disclosure of conflict to the IRS not necessary
Circular 230
When are CPA’s allowed to negotiate client’s IRS checks?
NEVER
Circular 230
What actions must a CPA take when errors or omissions are found regarding a taxpayers information or returns?
- CPA must promptly advise client of noncompliance, including consequences
- Not required to notify IRS
Circular 230
According to Circular 230, how are fees for tax services mandated?
- No unconscionable fees
- No contingent fees, except in IRS examination
- Pay for performance is strictly prohibited
- Rate must be set or constant for each service
- Pay for performance is strictly prohibited
Circular 230
What are the requirements regarding CPA client record retention according to Circular 230?
- Must retain for 3 years after the close of the return period or make a list
- Name, tax ID, taxable years, type of return)
Circular 230
What are CPAs required to do with client records if there is a dispute over fees?
- CPA only has to return docs that must be attached to return
- Practitioner must provide reasonable access for client to copy retained records
