Circular 230

Question 1

List the components of the Internal Revenue Service best practices as outlined in Circular 230.

Answer 1

• Communicate clearly with client
• Establish facts
• Relate applicable law
• Advise client regarding consequences

Question 2

List the types of covered opinions outlined in Circular 230.

Answer 2

• Tax avoidance transactions
• Transactions with principal purpose of avoiding tax
• Four categories of transactions with significant purpose of avoiding tax.

Question 3

Identify the elements of an impermissible fee as described in Circular 230.

Answer 3

• Unconscionable

* (With some exceptions) Contingent

Question 4

List the general requirements of Internal Revenue Service (IRS) practitioners as highlighted in Circular 230.

Answer 4

• Furnishing requested information promptly
• Exercising due diligence
• Not unreasonably delaying IRS matters.
• Not providing assistance in practicing to persons disbarred or suspended by IRS

Question 5

What is Circular 230?

Answer 5

The Department of Treasury’s rules of practice that cover CPAs and others who practice before the Internal Revenue Service.