MY CPE Flashcards
Latest Enrolled Agent Ethics course
Review Quiz
Which section of the Internal Revenue Code (IRC) applies to tax preparers who knowingly or recklessly disclose information given to them to prepare a tax return or use the information for any purpose other than to prepare a return?
- IRC 6694.
- IRC 7216.
- IRC 7701.
- IRC 6103.
My Answer: 7216
Correct
Explanation
IRC 7216 specifically applies to tax preparers who knowingly or recklessly disclose or use tax return information for purposes other than preparing the return. This section imposes penalties to protect taxpayer confidentiality.
Review Quiz
Which section of Circular 230 requires tax quality control procedures for practitioners?
* Section 10.33
* Section 10.50
* Section 10.22
* Section 10.36
My answer: 10.36
Explanation
Section 10.36 of Circular 230 mandates that individuals with principal authority over a firm’s tax practice must take reasonable steps to ensure the firm has adequate procedures in place to comply with the standards set forth in Circular 230. This includes implementing tax quality control procedures to prevent non-compliance by individuals associated with the firm.
Review Quiz
Question 3
Identify the actions that is NOT considered a violation of Circular 230 as per the Internal Revenue Service (IRS).
- Failure to file taxes.
- Evading tax payments.
- Failure to stop at a stop sign.
- Failure to use due diligence.
My Answer: Failure to stop at a stop sign.
Explanation
Failure to stop at a stop sign is not related to Circular 230. Circular 230 governs the conduct of tax practitioners in relation to federal tax practice, including ethical standards and compliance with tax laws. Traffic violations, such as failing to stop at a stop sign, fall outside the scope of Circular 230 and are not considered violations of its provisions.
Review Quiz
Question 4
What is the correct protocol regarding client records in the context of Circular 230?
- It can never be returned.
- It can be returned if requested.
- It cannot be returned if there is a fee dispute.
- It can be destroyed after a year.
My answer: It can be returned if requested.
Explanation
This is the proper protocol under Circular 230. When a client requests their records, the practitioner must return them. This requirement ensures that clients have access to their necessary documentation to meet their tax filing obligations. Circular 230 emphasizes the importance of client rights and the ethical obligation of practitioners to facilitate compliance with tax laws.
Review Quiz
Question 5
What is the appropriate protocol for discussing client information with other clients in regard to Circular 230 and IRC 7216?
- It is not appropriate, ever.
- It is fine with the client’s permission.
- It is not an IRC 7216 violation.
- It is totally appropriate.
My answer: It is fine with the client’s permission.
Explanation
Under IRC 7216, discussing a client’s information with other clients is permissible if the client has given explicit, informed consent. Practitioners must ensure they obtain a signed disclosure from the client before sharing any information. This ensures compliance with confidentiality rules and maintains the integrity of the client’s privacy.
Review Quiz
Which of the following is recommended to ensure high-quality representation and compliance with IRS standards, in the context of best practices for tax professionals?
- Provide clients with the highest quality representation.
- Adhere to best practices in providing advice and preparing documents for the IRS.
- Use engagement letters.
- All of the above.
My answer: All of the above
Explanation
The most comprehensive approach to best practices includes providing high-quality representation, adhering to best practices in advice and documentation, and using engagement letters. Each element contributes to a well-rounded, professional practice that meets IRS standards and client expectations effectively.
Final Quiz
Identify the areas that Circular 230 primarily covers as per the Internal Revenue Service (IRS).
* Tax representation.
* Tax preparation.
* Financial audits.
* 401k plans.
My answer: Tax representation
Final Quiz Q2
Under Circular 230, due diligence is
Final Quiz Q3
Discussing client information with the spouse is
My answer: sometimes fine
Final Quiz Q4
What is the penalty for an unauthorized disclosure or use of client information connected to an identity theft crime?
* $100 for each use or disclosure.
* $1,000 for each use or disclosure.
* $10,000 for each use or disclosure.
* No penalty.
My answer: 1
$1,000 for each use or disclosure.
Final Quiz Q5
How can the use of social media impact professional conduct?
* It can lead to ethical violations.
* It is outside the purview of accounting ethics.
* It does not reflect on the accountant.
* It helps get clients but doesn’t apply tax ethics rules.
My Answer: It can lead to ethical violations.
Final Quiz Q6
What are the potential consequences for the tax preparer, if a client is found to have cheated on their taxes?
* Tax preparers face no repercussions.
* Tax preparer can face preparer penalties.
* Tax preparers need to fire them as clients.
* Tax preparer should help the clients.
My Answer: Tax preparer can face preparer penalties.
Final Quiz Q7
Which of the following statements regarding tax payment responsibilities is correct, according to Circular 230?
* One should pay all the taxes under Circular 230.
* One should pay all the taxes unless they have a reasonable reason not to.
* One should never pay the taxes since they file other tax returns.
* One should pay all fees to the doctor under Circular 230.
My Answer: One should pay all the taxes unless they have a reasonable reason not to.
Final Quiz Q8
According to best practices and regulatory guidelines, for __________ years a conflict-of-interest waiver be kept on record after the conflict has been resolve.
- 1
- 2
- 3
- 4
My Answer: 3
Final Quiz Q9
Which of the following is not a recognized source for accounting ethics guidance?
- Circular 230 (Circ 230).
- AICPA Statements on Standards for Tax Services (AICPA SSTS).
- Clifford’s Big Red Book.
- Bar Associations Tax Ethics.
My Answer: Clifford’s Big Red Book.
