Chapter 1 - Treasury Circular 230 Flashcards
What does Circular 230 require from practitioners?
Establish relevant facts
Evaluate reasonableness of assumptions, arriving at conclusion supported by law and facts
Document conclusions in rendering tax advice
What is the Treasury Circular 230?
Rules for recognition of attorneys, CPAs, enrolled agents, enrolled retirement plan agents, other persons representing taxpayers before the IRS
Must practitioner provide requested records for IRS?
Yes, unless practitioner believe information is privileged.
What happens if practitioner knows client made an error?
He must advise client on fact and consequence of the error and if taxpayer chooses to ignore, CPA should abandon relationship.
When must practitioner exercise due diligence?
When determining correctness of oral or written representations made to government or clients
When relying on work of others.
Practitioner fees.
Practitioner cannot charge unconscionable fee but can charge contingent fee for certain things.
CPA conflict of interest
CPA cannot advise client if conflict of interest but can represent multiple clients if CPA able to provide competent representation and each client waives conflict of interest
What is in Section 10:31
CPA cannot endorse client check
What is section 10:34?
CPA cannot advise client to sign return or claim that lacks reasonable basis
Must inform clients of any penalties
Practitioner can rely on client information as correct
What is section 10:35?
Practitioner must possess necessary competence before IRS
What is Section 10:37?
Written advice requirements (relevant facts, reasonable efforts)
May not rely on others advice if they know that person is not competent or has conflict of interest.
