1. The following is a true statement regarding practitioners.
A. The practitioner must use reasonable efforts to identify and ascertain the
facts, which may relate to future events if a transaction is prospective or
proposed, and to determine which facts are relevant.
B. The practitioner can base an opinion on any unreasonable factual assumptions
(including assumption as to future events).
C. The practitioner can base an opinion on any unreasonable factual
representations, statements or findings or of the taxpayers or any other person.
D. It
is reasonable for a practitioner to rely on a projection, financial forecast or
appraisal if the practitioner knows or should know that it is incorrect or
incomplete or was prepared by a person lacking skills or qualifications.
2. Any practitioner who has principal authority and responsibility for overseeing a firm's practice of providing advice concerning Federal tax issues must take reasonable steps to ensure that the firm has adequate procedures in effect for all members, associates, and employees. Any such practitioner will be subject to discipline for failing to comply with the requirements if
A. The practitioner takes reasonable steps to ensure that the firm has adequate
procedures to comply with section 10.35, and individuals who are
members of, associated with, or employed by, the firm are, or have engaged in a
pattern or practice, in connection with their practice with the firm, fail to
comply with such.
B. The practitioner knows or should know that one or more individuals that don't
comply with section 10.35 and the practitioner fails to take prompt
action to correct the noncompliance.
C. The practitioner does not give written advice as to the conduct of
individuals who are not in compliance with section 10.35.
D. None of the above.
3. The Secretary of the Treasury, or delegate, after notice and an opportunity for a proceeding, may censure, suspend, or disbar any practitioner from practice before the Internal Revenue Service if the practitioner
A. Is shown to be incompetent or disreputable.
B. Fails to comply with any regulation under the prohibited conduct standards or
with intent to defraud.
C. Willfully and knowingly misleads or threatens a client or prospective client.
D.
Any of the above.
4. Incompetence or disreputable conduct for which a practitioner may be sanctioned includes
A. Willfully disclosing or otherwise using a tax return or tax return
information in a manner authorized by the Internal Revenue Code.
B. Failing to sign a tax return prepared by the practitioner when the
practitioner's signature is not required by the Federal tax laws.
C. Contemptuous conduct in connection with practice before the Internal Revenue
Service, including the use of abusive language or making false accusations or
statements, knowing them to be false.
D.
Giving false or misleading information to the Department of the Treasury or any
officer or employee thereof, or to any tribunal authorized to pass upon Federal
tax matters, when not knowing the information to be false or misleading.
5. A complaint is not sufficient to just fairly inform the respondent of the charges brought so that the respondent is able to prepare a defense.
True False
6. To maintain active enrollment to practice before the Internal Revenue Service, each individual is required to have the enrollment renewed. The following statement is correct regarding enrollment renewal.
A. If you don't receive notification from the Director of the Office of
Professional Responsibility of the renewal requirement it means the individual
is not required to renew.
B. The effective date of renewal is the first day of the fourth month following
the close of the period for renewal.
C. A minimum of 42 hours of continuing education credit must be completed during
each enrollment cycle.
D.
A minimum of 10 hours of continuing education credit must be completed during
each enrollment year of an enrollment cycle.
7. To qualify for continuing education credit for an enrolled agent, a course of learning must
A. Be a qualifying program designed to enhance professional knowledge in Federal taxation
or Federal taxation related matters.
B. Be a qualifying program consistent with the Internal Revenue Code and
effective tax administration.
C. Be sponsored by a qualifying tax education sponsor.
D.
All of the above.
8. A practitioner may take acknowledgements, administer oaths, certify papers, or perform official acts as a notary public with respect to any matter administered by the Internal Revenue Service.
True False
9. A practitioner shall not represent a client before the Internal Revenue Service if the representation involves a conflict of interest. A conflict of interest exists if
A. There is no significant risk that the representation of one or more clients
will be materially limited by the practitioner's responsibility to another
client, a former client or a third person, or by a personal interest of the
practitioner.
B. The representation of one client will be directly adverse to another client.
C. The representation is prohibited by law.
D.
Each affected client waives the conflict of interest and gives informed consent.
10. Tax advisors should provide clients with the highest quality representation concerning Federal tax issues by adhering to best practices in providing advice and in preparing or assisting in the preparation of a submission to the Internal Revenue Service. Best practice includes
A. Advising a client to take a position on a document, affidavit or other paper
submitted to the Internal Revenue Service.
B. Advising a client to submit a document, affidavit or other paper to the
Internal Revenue Service even if this impedes the administration of the Federal
tax laws.
C. Establishing the facts, determining which facts are relevant, evaluating the
reasonableness of any assumptions or representations, relating the applicable
law to the relevant facts, and arriving at a conclusion supported by the law and
the facts.
D.
Advising a client to take any step necessary to avoid the payment of tax at all
cost.
12. In cases where any part of the understatement of the tax liability is due to a willful attempt by the return preparer to understate the liability, or if the understatement is due to reckless or intentional disregard of the rules or regulations by the tax preparer, the prepare is subject to a
A.
$5,000 penalty.
B. Penalty of
50% of income derived or to be derived.
C. $1,000
penalty.
D. Greater or
A or B above.
13. A penalty will not be imposed on any part of an underpayment if there was reasonable cause for your position and you acted in good faith in taking that position. However, if you failed to keep proper books and records or failed to substantiate items properly, you
A. Can avoid the penalty by disclosure.
B. Cannot avoid the penalty by disclosure.
C. Cannot file Form 8275-R.
D.
Should just pay the preparer penalty.
14. The penalty for reckless or intentional disregard of a regulation may be avoided by disclosure only if the position represents a good faith challenge to the validity of the regulation and has a reasonable basis. Generally, the accurate-related penalty of any portion of a tax underpayment attributable to negligence or disregard of rules or regulations is
A.
10%.
B.
20%.
C. 40%.
D. 50%.
15. An understatement is the excess of the amount of tax required to be shown on the return over the amount of tax shown on the return for the tax year, reduced by any rebates. There is an substantial understatement if the amount of the understatement for any year exceeds
A. 10% of the tax required to be shown on the return for the tax year.
B. $5,000 ($10,000 for a corporation).
C.
$10,000,000.
D.
The greater of A or B above.
16. Any individual engaged in limited practice before the IRS who is involved in disreputable conduct may be
A. Disbarred or suspended, or censured.
B.
Dismissed.
C.
Jailed.
D.
Forced to meet with the IRS.
17. The following un-enrolled individual can represent the specified taxpayers before the IRS, provided this individual presents satisfactory identification.
A. A family member.
B.
An Officer of a Corporation.
C.
An employee representing employer.
D.
Any of the Above.
18. In general, individuals who are not eligible or who have lost the privilege as a result of certain actions cannot practice before the IRS. If an individual loses eligibility to practice, his or her power of attorney will be
A. Discarded.
B.
Return to him by certified mail.
C.
Will not be recognized by the IRS.
D.
(As long as he files one) recognized by the IRS.
19. As for negotiation of taxpayer refund checks, Practitioners who are income tax return preparers (un-enrolled)
A. Can endorse any refund check issued to the taxpayer.
B.
Must not endorse or otherwise negotiate (cash) any refund check issued to the
taxpayer.
C.
Can negotiate (cash) any refund check issued to the taxpayer.
D.
Both A and C above.
20. Being convicted of any criminal offense under the revenue laws or of any offense involving dishonesty or breach of trust is
A. Acceptable conduct if offense was committed in a state other than the one
you practice in.
B.
Alright as long as it does not directly involve your client.
C.
Not considered disreputable conduct.
D.
Considered disreputable conduct.