Tax Audit Representation Flashcards
What is the main section of the Internal Revenue Code that grants the right to representation during an audit? IRC Section 7521 - Procedures involving taxpayer interviews.
IRC Section 7521 - Procedures involving taxpayer interviews.
What Revenue Ruling clarifies that a taxpayer may have representation during an audit and may record the proceedings? Revenue Ruling 70-549.
Revenue Ruling 70-549.
What is the form used to appoint an individual to represent the taxpayer before the IRS, including during audits? Form 2848, Power of Attorney and Declaration of Representative.
Form 2848, Power of Attorney and Declaration of Representative.
What is the main professional standard governing tax professionals who represent taxpayers in audits? Circular 230, Regulations Governing Practice before the Internal Revenue Service.
Circular 230, Regulations Governing Practice before the Internal Revenue Service.
What is the purpose of IRS Letter 2205-A, and how does it relate to tax audit representation? This letter is sent by the IRS to inform the taxpayer of a field audit. Representation can be requested at this stage.
This letter is sent by the IRS to inform the taxpayer of a field audit. Representation can be requested at this stage.
Which IRS publication offers guidance for taxpayers on their rights and should be understood by representatives? IRS Publication 1, Your Rights as a Taxpayer.
IRS Publication 1, Your Rights as a Taxpayer.
What types of professionals are generally allowed to represent taxpayers before the IRS during an audit? Attorneys, Certified Public Accountants (CPAs), and Enrolled Agents.
Attorneys, Certified Public Accountants (CPAs), and Enrolled Agents.
When representing a client in an audit, what is the process for requesting and obtaining the client’s tax return and account information? Submit Form 2848 to the IRS and request the required transcripts and documents, such as using the IRS’s Transcript Delivery System.
Submit Form 2848 to the IRS and request the required transcripts and documents, such as using the IRS’s Transcript Delivery System.
In audit representation, what section of the Internal Revenue Code imposes penalties for underpayment attributed to an understatement of taxpayer liability by a tax return preparer? IRC Section 6694.
IRC Section 6694.
What is the responsibility of a tax representative when the IRS issues Information Document Request (IDR) during an audit? The representative must assist the client in providing the requested information, ensuring it is accurate and submitted timely.
The representative must assist the client in providing the requested information, ensuring it is accurate and submitted timely.
What are some common ethical considerations when representing a client in an audit as per Circular 230? Diligence, Competence, Complying with Information Requests, and not providing false information.
Diligence, Competence, Complying with Information Requests, and not providing false information.
What are the key stages of an IRS audit that a representative should be familiar with? Notification, Preparation, Meeting with the IRS, Negotiation, Closing, and Appeal if necessary.
Notification, Preparation, Meeting with the IRS, Negotiation, Closing, and Appeal if necessary.
