Representation, Practices & Procedures Flashcards
If a power of attorney specifically authorizes the substitution of a recognized representative, which document need NOT be submitted to the IRS?
a. A written declaration of representative executed by the new representative
b. A notarized letter from the taxpayer advising the IRS that the authorization to substitute remains valid.
c. A notice of substitution filed by the original representative
d. The original power of attorney.
Subunit 3.1
b. A notarized letter from the taxpayer advising the IRS that the authorization to substitute remains valid.
If a representative chooses to use a non-IRS power of attorney form, which of the following “Declaration of Representative” statements is NOT required in order for the POA to be valid?
a. A declaration that the representative is not currently under suspension or disbarment from practice before the IRS or other practice of his or her profession by any other authority.
b. A declaration that the representative is authorized to practice before the IRS in his or her capacity as an attorney, CPA, EA, etc.
c. A declaration that the representative is aware of the regulations contained in Treasury Department Circular 230 concerning the practice of EA, CPA, attorney, etc.
d. A declaration that the representative is not currently under investigation by the IRS.
Subunit 3.1
d. A declaration that the representative is not currently under investigation by the IRS.
Which of the following statements is false regarding penalties for aiding and abetting the understatement of tax liability?
a. The penalty may not be imposed if the same violation is being penalized under Sec. 6694.
b. The penalty is $10,000 if the document relates to an individual taxpayer’s liability.
c. The burden of proof is on the government
d. The document in question must relate to a material, federal tax matter.
Subunit 2.4
b. The penalty is $10,000 if the document relates to an individual taxpayer’s liability.
The IRS can censure, suspend, or disbar a practitioner from practice before the IRS for incompetence and/or disreputable conduct. Which of the following is considered disreputable conduct?
a. Having your motor vehicle license suspended as a result of numerous traffic violations
b. Being indicted of a felony under federal or state law for which the conduct involved renders the practitioner unfit to practice before the IRS
c. Giving false or misleading information, or participating in any way in the giving of false or misleading information to the Dept. of Treasure or any officer or employee thereof
d. Being indicted for any criminal offense under the revenue laws of the US
Subunit 1.5
c. Giving false or misleading information, or participating in any way in the giving of false or misleading information to the Dept. of Treasure or any officer or employee thereof
An Enrolled Agent (EA) represents a married couple in an ongoing examination. One afternoon, the taxpayer-wife shows up early to a meeting at the EA’s office. Off the record, the taxpayer-wife confides to the EA that the examination is causing marital strife, and that the taxpayer-wife is not sure but now suspects that her spouse may have taken erroneous business deductions. All of the following activities would address the conflict of interest EXCEPT
a. Informing both spouses of the potential ability to seek an innocent spouse determination as part of this examination as it moves forward.
b. If the taxpayer-wife does not consent to the EA sharing her concerns with her husband, the EA cannot obtain informed consent from the husband to continue to represent both spouses without violating her confidences. To continue to represent the taxpayer-wife alone would also pit the EA against the taxpayer-husband, his former client. Thus, the EA should withdraw from representation of either spouse.
c. Politely advising the client that this meeting was not appropriate, and make sure that no further meetings occur unless both spouses are present.
d. Advising both spouses that there could be a conflict of interest going forward in representing both of them and they may wish to retain their own counsel in the matter.
c. Politely advising the client that this meeting was not appropriate, and make sure that no further meetings occur unless both spouses are present. (unit 1.2)
All of the following individuals are eligible to practice (on a limited basis) before the IRS EXCEPT
a. a bona fide officer of a corporation may represent the corporation
b. a limited partner in a partnership may represent the partnership
c. a trustee of a trust may represent the trust
d. a regular full-time employee of an individual may represent the employer
b. a limited partner in a partnership may represent the partnership (unit 1.1)
Scott, an individual taxpayer, is involved in a criminal tax proceeding with the IRS. Regarding this proceeding, from which party can Scott receive tax advice and invoke the confidentiality privelge.
a. both a CPA and EA
b. None of the answer are correct
c. EA
d. CPA
b. None of the answer are correct (unit 2.2)
Janice has been enrolled to practice before the IRS since 1997. Her Social Security number ends in 2. When may she destroy records documenting her continuing education from January 2020?
a. April 1, 2026
b. April 1, 2024
c. April 1, 2025
d. April 1, 2027
a. April 1, 2026 (unit 1.6)
Each enrollment year is from Jan 1-Dec 31 for a 3-year period. The Jan 2020 cycle ends April 1, 2022 for EAs with SSN ending in 2. The next enrollment cycle will end on April 1, 2025. Records should be kept 4 years after the end of the enrollment period. (2022 + 4 years = April 1, 2026)
Which of the following statements concerning CE requirements for EA is NOT true?
a. The IRS may grant waiver from the CE requirements for a given period if there is a compelling reason and the request for waiver is appropriately documented.
b. The EA must complete a minimum of 72 hours of CE credit if enrolled for the entire enrollment cycle.
c. An individual who receives initial enrollment during an enrollment cycle must complete 2 hours of CE credit for each month enrolled.
d. The EA must complete a minimum of 24 hours of CE credit in each year of an enrollment cycle if enrolled for the entire cycle.
d. The EA must complete a minimum of 24 hours of CE credit in each year of an enrollment cycle if enrolled for the entire cycle. (unit 1.6)
Tax advisors should adhere to “best practices” in providing advice and in preparing a submission to the IRS. Best practices include all of the following EXCEPT
a. Advising the client regarding the importance of the conclusions reached.
b. Acting fairly with integrity in practice before the IRS
c. Clearly communicating the terms of the engagement with the client
d. Establishing the facts, their relevancy, and arriving at a conclusion supported solely by the facts
d. Establishing the facts, their relevancy, and arriving at a conclusion supported solely by the facts (unit 1.3)
For the current year, Mr. Dixon, a tax preparer, prepared for compensation an income tax return for Mr. Hatfield. Mr. Hatfield purchased furniture in the current year that required depreciation using the MACRS method. Mr. Dixon explained to Mr. Hatfield that the furniture should be depreciated using a certain class life. However, Mr. Hatfield insisted that a different class life be used for the depreciation calculation. At Mr. Hatfield’s insistence, Mr. Dixon relented and used that class life. This position was not disclosed on the tax return, and it resulted in an understatement of tax. Since Mr. Dixon used the incorrect class life due to Mr. Hatfield’s insistence, what is the amount of the return preparer penalty that may be imposed on Mr. Dixon?
$5,000 or 75% of fee, whichever is greater
Larry Smith passed all parts of the Special Enrollment Examination in October of Year 1. Larry submitted the required forms to become an enrolled agent. Larry failed the suitability test performed by the Internal Revenue Service, and the IRS informed Larry that he was denied participation and provided him with the reasons for the denial. Larry received the notice on January 20, Year 2. What action should Larry take to appeal the denial received from the IRS?
a. Larry must file a written appeal no later than the 19th of February with the Secretary of the Treasury or his designee
b. Larry must file a written appeal no later than the 19th of February with the Commissioner of IRS or his designee
c. Larry must file a written appeal no later than the 30th of January with the Secretary of the Treasury or his designee
d. Larry must file a petition no later than the 30th of January with the District Court
a. Larry must file a written appeal no later than the 19th of February with the Secretary of the Treasury or his designee (unit 1.1)
All of the following are examples of disreputable conduct for which an enrolled agent may be disbarred or suspended from practice before the Internal Revenue Service EXCEPT
a. Failing to properly and promptly remit funds received from a client for the purpose of payment of taxes
b. Suggesting that (s)he is improperly able to obtain special consideration from an IRS employee
c. Maintaining a partnership for the practice of tax law and accounting with a person who is under disbarment from practice before the IRS
d. Soliciting by mailings, the contents of which are designed for the general public
d. Soliciting by mailings, the contents of which are designed for the general public (unit 1.5)
Maude, an attorney, has been charged by the IRS with acts of misconduct. Which of the following forms of evidence is Maude NOT permitted to introduce at the hearing?
a. letters
b. exhibits
c. depositions
d. all of the answers are correct
a. letters (unit 1.5)
Rich, an enrolled agent, is currently representing Dana before the Internal Revenue Service. Mike, Dana’s former business partner, asks Rich to represent him before the Internal Revenue Service. Notwithstanding the existence of a conflict of interest between Dana and Mike, Rich may still represent Mike before the Internal Revenue Service if certain requirements are met. Which of the following statements is NOT a requirement that Rich has to satisfy before he can represent Mike?
a. the representation of Dana must not be prohibited by law
b. Dana and Mike must each give informed consent, confirmed in writing, to Rich
c. Rich must immediately notify the commissioner in writing that he is representing both Dana and Mike
d. Rich must reasonably believe that he will be able to provide competent and diligent representation to both Dana and Mike.
c. Rich must immediately notify the commissioner in writing that he is representing both Dana and Mike (unit 1.2)
