Partial Sse3 Set

Front 1

The IRS has _______ (days/months/years) from the date of assessment to collect a tax debt from a taxpayer.

Back 1

10 years

Front 2

The IRS has 10 years from ___________ to collect a tax debt from a taxpayer.

Back 2

the date of assessment

Front 3

Name the four cases whereby the IRS's ten year collection period is suspended.

Back 3

(1) during request for an installment agreement, (2) from the date a taxpayer requests a collection due process hearing, (3) while the taxpayer lives outside the US, (4) for tax periods included in bankruptcy

Front 4

True or false: The IRS is required to notify the taxpayer that he may refuse to extend the statute of limitations.

Back 4

True

Front 5

What's the statute of limitations on a claim for refund?

Back 5

Three years from the date the original return was filed or the return was due (whichever is later), or two years from the date the tax was paid, whichever is later.

Front 6

What's the statute of limitations on an IRS assessment?

Back 6

Three years after the due date of the return, or three years after the date the return was actually filed (with exceptions for fraud, etc.)

Front 7

What's the statute of limitations on a collection action?

Back 7

Ten years from the date of assessment

Front 8

A notice of federal tax lien may be filed only after what three things?

Back 8

(1) the IRS assesses the taxpayer's liability, (2) the IRS sends a notice and demand for payment, and (3) the taxpayer neglects to pay the debt

Front 9

True or false: An IRS lien does not cover property the taxpayer acquired after the lien was established

Back 9

False - it does cover that

Front 10

A taxpayer may appeal IRS collection actions to _____________

Back 10

to the IRS Office of Appeals

Front 11

The Office of Appeals is ______ and ______ the IRS Collection office that initiated the collection action

Back 11

The Office of Appeals is separate from and independent of the IRS Collection office that initiated the collection action

Front 12

True or false: The IRS Office of Appeals and the IRS Collection office communicate with each other

Back 12

False - they don’t

Front 13

A taxpayer has _______ (how long?) to file a request for a collection due process (CDP) hearing after receiving a notice?

Back 13

30 days

Front 14

What is the advantage of the CAP (collection appeals program) vs. the CDP (collection due process) hearing?

Back 14

generally quicker AND avaialble for a broader range of collection actions

Front 15

What is the disadvantage of the CAP (collection appeals program) vs. the CDP (collection due process) hearing?

Back 15

taxpayer cannot go to court to appeal if he disagrees with the CAP decision

Front 16

For taxpayers who want someone to represent them in their absence at an examination with the IRS, all of the following statements are correct except: (a) the taxpayer must furnish that representative with written authorization on Form 2848, Power of Attorney and Declaration of Representative, or any other properly written authorization; (b) the representative can be an attorney, CPA, or EA; (c) the representative can be ay person who helped the taxpayer prepare the return; (d) even if the taxpayer appointed a representative, the taxpayer may choose to attend the examination or apeals conference and may act on his own behalf.

Back 16

(c) only certain people are allowed to represent a taxpayer before the IRS

Front 17

Which of the following individuals does not qualify as an enrolled practitioner under Circular 230? (a) certified public accountant, (b) enrolled actuary, (c) unenrolled student volunteer at a VITA site, (d) all of the above are considered enrolled practitioners

Back 17

(d) all can represent a taxpayer before the IRS

Front 18

In order to practice before the IRS, attorneys and CPAs licensed to practice in a particular state must _______: (a) be in good standing in that state and may practice before the IRS only in that state; (b) be in good standing in that state and may practice before the IRS in any state; (c) take the EA exam in order to practice outside the state in which they are licensed; (d) none of the above

Back 18

(b) be in good standing and can practice in any state

Front 19

Which of the following statements is true? (a) a parent has the authority to represent her child before the IRS only if the child is a minor; (b) a parent has authority to represent her child before the IRS without the child present; (c) a parent cannot represent her child before the IRS without an enrolled practitioner present; (d) none of these

Back 19

(b) parent can represent child before IRS; child doesn't have to be there

Front 20

Denise and Gabriela are best friends. They are not family members. Gabriela must appear before the IRS for an examination. Denise wants to appear before the IRS on her best friend's behalf, though she is not an enrolled perparer. Which of the following statements is true? (a) Denise may represent Gabriela before the IR without Gabriela being present; (b) Denise may advocate for Gabriela to the best of her ability; (c) Denise may appear before the IRS as a witness and communication information; (d) Denise may not appear before the IRS in any capacity

Back 20

(c) appearing as a witness is allowed

Front 21

Which of the following individuals is required to obtain a PTIN? (a) a CPA who does not prepare any tax returns; (b) an EA who works for a CPA firm, but does not sign any tax returns; (c) a tax attorney who only does representation before the Supreme Court; (d) a retired accountant who prepares tax returns for free for his family

Back 21

(b) all EAs are required to obtain PTINs

Front 22

Matthew is a full-time employee for Parkway Partnershp. He is not an EA, attorney, or CPA. Parkway requests that Matthew represent the partnership in connection with an IRS audit. Which of the following statements is true: (a) Matthew is allowed to represent the partnership before the IRS; (b) Matthew is not allowed to represent the partnership before the IRS; (c) Matthew is only allowed to represent individual partners before the IRS; (d) none of the above

Back 22

(a) as a full-time employee he can represent his employer in that capacity

Front 23

Which of the following parties is allowed to act as an official representative for a taxpayer before the IRS? (a) an unenrolled tax practitioner who did not prepare the tax return in question; (b) a taxpayer's neighbor, who is not a CPA, attorney, or EA; (c) a limited partner in a partnership; (d) a student attorney can act as an official representative before the IRS

Back 23

(d) a student attorney

Front 24

Barry helps his friend Jose, who does not speak English fluently. Barry appears before the IRS and translates for Jose at an IRS examination. Which of the following is true? (a) Barry is practicing before the IRS; (b) Jose must sign Form 2848 authorizing Barry to represent him; (c) Barry is not considered to be "practicing before the IRS"; (d) The IRS prohibits unrelated persons fro being present at an IRS examination

Back 24

(c) this doesn't constitute practicing before the IRS

Front 25

How long is a power of attorney authorization valid? (a) one year; (b) three years; (c) until it is revoked or superseded; (d) until the due date of the next tax return

Back 25

(c) a power of attorney is valid until revoked or superseded

Front 26

A Centralized Authorization File (CAF) is __________. (a) An IRS computer file with information regarding the authority of an individual appointed under a power of attorney or person designated under a tax information authorization; (b) a file containing a practitioner's own personal tax return files, in order to assist with compliance regulation and monitoring of enrolled individuals; (c) an automated list of disbarred tax preparers; (d) an automated file of taxpayer delinquincies

Back 26

(a) CAF contains information on third parties authorized to represent taxpayers before the IRS

Front 27

Which of the following is consered a "paid preparer" under the Circular 230 regulations? (a) a full-time bookkeeper working for an employer who prepares payroll tax returns; (b) a retired attorney who prepares tax returns under the VITA program; (c) a person who merely furnishes typing, reproducing, or mechanical assistance; (d) a full-time secretary who also prepares tax returns for pay part-tme from home during tax season

Back 27

(d)

Front 28

"Practice before the IRS" does not include: (a) communicating with the IRS on behalf of a taxpayer regarding his rights or liabilities; (b) representing a taxpayer at conferences, hearings, or meetings with the IRS; (c) preparing and filing documents for the IRS; (d) representation of clients in the U.S. Tax Court

Back 28

(d) - doesn't include representation in the U.S. Tax Court - the Tax Court is independent of the IRS

Front 29

Khan is a CPA who employs Amy, an accounting student, to assist in the preparation of tax returns. Khan signs all of the tax returns. Which of the following statements is true? (a) Amy and can can share one PTIN; (b) Amy is required by laaw to sign the returns that she has prepared; (c) Amy is required to obtain a PTIN; (d) Amy cannot assist with teh preparation of tax returns until she becomes a CPA

Back 29

(c) - every individual who, for compensation, prepares or assists in the preparation of a tax return or claim for refund must have a PTIN

Front 30

Form 8821, Tax Information Authorization, may be used to authorize the following: (a) any individual, corporation, firm, organization, or partnership to receive confidential information for the type of tax and periods listed on Form 8821; (b) Any designated third party to receive tax information; (c) both A and B; (d) for unenrolled practitioners to indicate a representative relationship with a taxpayer and to authorize practice before the IRS

Back 30

(c) - both A and - form 8821 is only a disclosure form

Front 31

Willa is an EA with a signed Form 2848 from her client, who is currently under audit. Which of the following actions are not permitted? (a) Willa may record the audit meeting with the IRS examiner; (b) Willa may sign a consent to extend the statutory time period for assessment of tax; (c) Willa may receive and endorse a tax refund check on her client's behalf; (d) Willa may represent her client before the IRS appeals office, without the taxpayer present

Back 31

(c) - she can receive a check but she can't endorse or cash it

Front 32

Stan is an EA who already has a PTIN. What must he do to retain his PTIN? (a) nothing extra is required after the initial application. Stan will be allowed to retain his PTIN so long as he is current in his enrollment status; (b) Stan must renew his PTIN every three years when he renews his enrollment status; (c) Stan cannot retain his existing PTIN. He must apply for a new PTIN every year; (d) Stan must renew his existing PTIN yearly, and a requred fee must be paid

Back 32

(d) PTIN must be renewed each year and the required fee paid (in most cases preparers will be issued the same PTIN)

Front 33

Adele is a CPA with a bookkeeper, Ichiro, who asssts in the preparation of returns. Ichiro has a PTIN and qualifies as a "supervised preparer" under Section 1.6109-2(h). He is not an EA or other enrolled practitioner. Ichiro may not: (a) sign any tax return he prepares or assists in preparing; (b) represent taxpayers before the IRS in any capacity; (c) identify himself as a Circular 230 practitioner; (d) all of the above

Back 33

(d) - all of the above

Front 34

What penalties can be imposed against tax return preparers who prepare tax returns for compensation, but refuse to obtain a PTIN? (a) None; (b) censure by the IRS Office of Professional Responsibility; (c) Monetary penalties, injunction, and/or disciplinary action; (d) automatic expulsion from the IRS e-file program

Back 34

(c)

Front 35

Everett is an EA with a PTIN. His firm employs a bookkeeper name Fernanda. She gathers client receipts and invoices and organizes and records all information for Everett. Everett then uses the information that his bookkeeper has compiled and prepares all the tax returns. Which of the following statements is true: (a) Fernanda needs to have a PTIN, and she is required to become an EA because she assists in the preparation of returns; (b) Fernanda needsd to have a PTIN, but she is not required to become an EA; (c) Fernanda is not a tax return preparer and is not required to have a PTIN; (d) none of the above

Back 35

(c) Fernanda is not a tax return preparer and isn't required to have a PTIN.

Front 36

A power of attorney may be revoked by _____________. (a) the taxpayer; (b) the representative; (c) the U.S. Tax Court; (d) both A and B

Back 36

(a) - a power of attorney may be revoked by the taxpayer or the represenative

Front 37

To determine which preparer is responsible for a "substantial portion" of a tax return, the following guidelines are used EXCEPT: (a) whoever has the primary responsibility for the accuracy of the return; (b) whoever actually owns or manages the tax practice; (c) whoever prepare the portion of the return that declares the greatest amount of adjusted gross income; (d) none of the above

Back 37

(b) ownership or management of a tax practice is immaterial in determining the substantial portion rule

Front 38

Enrolled agents must complete continuing education credits for renewed enrollment. Which of the following describes the credit requirements? (a) a minimum of 72 hours must be completed in each year of an enrollment cycle; (b) a minimum of 24 hours must be completed in each year of an enrollment cycle; (c) a minimum of 80 hours must be completed, overall, for the entire enrollment cycle; (d) a minimum of 16 hours must be completed in each year of the enrollment cycle, including two hours of ethics

Back 38

(d) at least 16 hour each year; at least 2 hours of ethics each year; at least 72 hours during the entire 3-year period

Front 39

Each EA who applies for renewal to practice before the IRS ust retain information about CE hours completed. How long must CE verification be retained? (a) for one year following the enrollment renewal date; (b) for four years following the enrollment renewal date; (c) for five years if it's an initial enrollment; (d) the individual is not required to retain the information if the CE provider has agreed to retain it

Back 39

(c) have to retain information about CE for four years following the enrollment renewal date (the CE provider also has to keep the info for four years)

Front 40

What is the "enrollment cycle" for EAs? (a) the enrollment cycle is the year after the effective date of renewal; (b) the enrollment cycle means the three successive enrollment years preceding the effective date of renewal; (c) the enrollment cycle is the method by which the RPO approves exam candidates; (d) the enrollment cycle is the method by which Prometric chooses exam questions for EA candidates

Back 40

(b) means the three successive enrollment years preceding the effective date of renewal

Front 41

EAs who do not comply with the requirements for renewal of enrollment will be contacted by the Return Preparer Office. How much time does the EA have to respond to the RPO? (a) 30 days from the date of the notice; (b) 60 days from the date of the notice; (c) 60 days from the date of receipt; (d) 90 days from the date of the notice

Back 41

(b) 60 days from the date of the notice

Front 42

Nathan, an EA, teaches various continuing education courses in tax law. What is the maximum CE credit fro instruction and preparation that Nathan can claim each year? (a) two hours; (b) four hours; (c) six hours; (d) eight hours

Back 42

(c) maximum CE credit for instruction and preparation is limited to six hours per year for EAs

Front 43

All of the following are potential grounds for denial of enrollment except: (a) failure to file timely tax returns; (b) failure to pay taxes; (c) felony convictions; (d) a candiate who is only 18 years old

Back 43

(d) the minimum age for enrollment is 18

Front 44

Chris earned his initial enrollment in year three of his enrollment cycle, in the month of November. How many CE credits must he complete before the end of the year? (a) four of which two must be ethics; (b) six of which two must be ethics; (c) sixteen of which two must be ethics; (d) two of which one must be ethics

Back 44

(a) two for each month and always two for ethics

Front 45

Andrea has been an enrolled agent for many years. Her records show that she had the following hours of qualified CE in 2012: Jan - 7 hrs general tax CE, May - 1hr ethics, December - 9 hrs general tax CE. Has andrewa met her minimum yearly CE requirements? (a) Yes, Andrea has met her minimum yearly CE requirements; (b) No, Andrea has met her ethics requirement but not the overall minimum requirement; (c) No, Andrea has not met her ethics requirement; (d) none of the above

Back 45

(c) She hasn't met the ethics requirement. She needs 2 hours of ethics every year

Front 46

A practitioner's status as an enrolled agent must be renewed every three years as determined by _________. (a) his last name; (b) the last digit of his SSN; (c) the date of his initial enrollment; (d) the date that he passed the EA exam

Back 46

(b) last digit of his SSN

Front 47

A minimum of how many hours of ethics education are required per enrollment cycle? (a) seventy-two; (b) forty-eight; (c) eight; (d) six

Back 47

(d) at least two hours every year - so six hours in the three year cycle

Front 48

Chung, an EA, retakes the SEE in the second year of his renewal, and achieves passing scores. How many hours of continuing education must he take during the final year of his enrollment? (a) four; (b) eight; (c) ten; (d) sixteen

Back 48

(d) there is an exception to the required 72 hours over the cycle. An EA who retakes the EA exam and has passing scores on each part just needs 16 hours of CE in the final year

Front 49

What action should an EA take if he chooses to appeal termination from enrollment? (a) Call the Office of Professional Responsibility to complain; (b) File a written protest within 30 days of the date of the notice of termination; (c) File a written protest within 60 days of the date of the notice of termination; (d) File a written protest within 90 days of the date of the notice of termination

Back 49

(b) Should file a written protest within 30 days of the date of the notice

Front 50

Darrell is an EA who has a third party designee authorization for his client, Annalise. All of the following actions are allowed with this type of authorization except: (a) Darrell can receive written account information on Annalise's behalf; (b) Darrell can receive Annalise's tax transcripts upon request; (c) Darrell can check the status of tax refund processing; (d) Darrel l may receive Annalise's refund check

Back 50

(d) A third party designee can't receive a tax refund check. In order to receive a tax refund check on a client's behalf a Form 2848 must be filed

Front 51

All the following statements regarding confidentiality protection for enrolled practitioners are correct except: (a) the protection relates to noncriminal tax matters before the IRS; (b) the protection applies to communications that would be considered privileged if they were between the taxpayer and an attorney; (c) the protection is granted to CPAs, enrolled agents, enrolled actuaries, and supervised preparers; (d) the protection is not granted in state tax proceeding

Back 51

(c) the practitioner privelege is granted to attorneys, CPAs, enrolled agents and enrolled actuaries but not to supervised preparers

Front 52

If there is substantial unreported income (over 25%), the IRS may audit tax returns for up to ______ after the filing date. (a) three years; (b) four years; (c) six years; (d) indefinitely

Back 52

(c) in most cases three years but it's up to six years if there is substantial unreported income

Front 53

What percentage of tax must a taxpayer pay if he is guilty of a "substantial understatement" penalty? (a) 5% of the net understatement of tax; (b) 10% of the net understatement of tax; (c) 20% of the net understatement of tax; (d) 25% of the net understatement of tax

Back 53

(c) the substantial understatement penalty is calculated as a flat 20% of the net understatement of tax

Front 54

What is not considered a potential "badge of fraud" by the IRS? (a) sloppy record keeping; (b) taking improper credits; (c) all-cash business; (d) deductions for foreign travel

Back 54

(d) deductions for foreign travel

Front 55

What is the penalty a preparer faces for understating income on a tax return due to an unrealistic position? (a) $1,000 per tax return or 50% of the additional income upon which the penalty was imposed; (b) $5,000 per tax return; (c) 50% of the understatement; (d) Nothing, so long as the preparer fails to adequately disclose the position on the return

Back 55

(a) - preparer faces an understatement penalty of $1,000 per tax return or 50% of the additional income upon which the penalty was imposed

Front 56

The IRS can impose the following ban related to the EIC: (a) The IRS cannot ban a taxpayer from claiming the EIC; (b) Ten year ban for fraud; (c) Two year ban for fraud; (d) Permanent ban for fraud

Back 56

(b) The IRS can impose a two year ban for reckless or intentional disregard of EIC rules or a ten year ban for fraud

Front 57

Which of the folowing types of written advice would fall under the Circular 230 rules for "covered opinions"? (a) advice from in-house employees to their employers; (b) written advices solely for one taxpayer after the taxpayer has already filed a tax return; (c) written advice that does not resolve a federal tax issue in the taxpayer's favor; (d) a plan or arrangement whose principal purpose is the avoidance of tax

Back 57

(d)

Front 58

A tax professional cannot knowingly sign _______. (a) a tax return for a family member; (b) a tax return that is not prepared for compenation; (c) a tax return with a properly disclosed tax shelter position; (d) a frivolous return with a disclosure

Back 58

(d)

Front 59

Reportable transactions are also called ____________. (a) listed transactions; (b) loss transactions; (c) tax transactions; (d) government transactions

Back 59

(a) - reportable transactions are also called listed transactions

Front 60

What is the penalty for failure to furnish a tax shelter registration number on a return? (a) $150 for each failure; (b) $250 for each failure; (c) $500 for each failure; (d) $1,000 for each failure

Back 60

(b) a taxpayer may have to pay a penalty of $250 for each failure to report a tax shelter registration number on a return

Front 61

Dylan is a client of Bethany's, an EA. Dylan wishes to claim a deduction for a certain large business expense. However, there is a question about whether the expense is "ordinary and necessary" for his business. If the deduction were disallowed, there would be a substantial understatement of tax (over 25%). Bethany researches the issue and tells Dylan that the position should be disclosed. Dylan doesn't want to disclose the position on the return, becauase he is afraid that the IRS will disallow it. What are the repercussions for Bethany? (a) none. all the penalties apply to the client; (b) Bethany may be liable for preparer penalties; (c) Bethany will not be liable for preparer penalties so long as she explains the potential penalties to the client; (d) none of the above

Back 61

(b) Bethany may be subject to a preparer penalty

Front 62

A practitioner is required to inform a client of any penalties that are reasonably likely to apply to a position taken on a tax return if: (a) the taxpayer decides to self-prepare a return; (b) the practitioner gave the client professional advice on the position; (c) teh IRS has the taxpayer under examination; (d) the taxpayer is deceased

Back 62

(b) practitioner must inform client if the practitioner gave the advice or signed the return

Front 63

When it comes to professional tax advice the IRS defines "more likely than not" as: (a) a tax treatment that has a reasonable basis and a least a 10% likelihood of being upheld in court; (b) a tax treatment that has at least a 50% likelihood that the position will be upheld if the IRS challenges it; (c) a tax treatment that has a greater than 50% likelihood that the position will be upheld if the IRS challenges it; (d) a tax treatment that is disclosed

Back 63

(c) the IRS defines "more likely than not" as a position that has a greater than 50% likelihood that the tax treatment will be upheld if the IRS challenges it.

Front 64

All of the following are types of relief from joint and several liability for spouses who file joint returns except: (a) innocent spouse relief; (b) separation of liability relief; (c) joint relief; (d) equitable relief

Back 64

(c) - there is no such thing as joint relief

Front 65

A levy allows the IRS to ___________: (a) confiscate and sell property to satisfy a tax debt; (b) publicly notify a taxpayer's creditors of a claim against his property; (c) collect tax beyond the statute of limitations; (d) sell property on behalf of the taxpayer

Back 65

(a) a levy allows the IRS to confiscate and sell property to satisfy a tax debt

Front 66

How does the IRS begin the process of collections? (a) with an emai to the taxpayer as soon as he files his tax return; (b) with a certified letter to the taxpayer immediately after a tax return is processed and flagged for audit; (c) with a written examination notice when the taxpayer is notified of the possibility of an audit; (d) a first notice will be sent, which is a letter that explains the balance due and demands payment in full

Back 66

(d)

Front 67

The IRS ay accept an offer in compromise based on three grounds. All of the following are valid groudns for submitting an OIC to the IRS except: (a) doubt as to collectability; (b) effective tax administration; (c) legimate shelter argument; (d) doubt as to liability

Back 67

(c)

Front 68

Which of the following statements regarding revenue rulings is correct? (a) revenue rulings cannot be used to avoid certain IRS penalties; (b) revenue rulings can be used to avoid certain IRS penalties; (c) revenue rulings are not official IRS guidance; (d) None of the above

Back 68

(b) revenue rulings can be used to avoid certain IRS penalties

Front 69

What is a private letter ruling? (a) it is a private letter that a taxpayer writes to the IRS; (b) it is a private letter issued by the U.S. Tax Court; (c) it is a request by a taxpayer to the IRS to rule about a particular matter; (d) it is a request by the IRS to Congress about tax issues

Back 69

(c) - initiated by a taxpayer with a question about a matter

Front 70

Which is not a type of official IRS guidance? (a) treasury regulation; (b) private letter ruling; (c) technical advice memorandum; (d) tax court memorandum opinion

Back 70

(d) - it's of the Tax Court not the IRS

Front 71

Which of the following choices is not a type of Treasury regulation: (a) Supporting regulation; (b) Interpretative regulation; (c) Legislative regulation; (d) Procedural regulation

Back 71

(a) - there is not Treasury supporting regulation; the other three are valid

Front 72

Which of the following statements regarding the legality of revenue rulings and revenue procedures is correct? (a) revenue rulings are binding in court, but revenue procedures are not; (b) revenue rulings and revenue procedures are binding in court; (c) Revenue rulings and revenue procedures are not binding in court; (d) revenue rulings and revenue procedures are binding in Tax Court, but in in U.S. District Courts.

Back 72

(c) - Revenue rulings and Revenue procedures are not binding in Tax Court or any other court

Front 73

A legislative regulation has a higher degree of authority than ______ (a) the Internal Revenue Code; (b) a Supreme Court Decision; (c) An interpretative regulation; (d) none of the above

Back 73

(c)

Front 74

Wh a Treasury regulation becomes "official," what happens? (a) a procedural regulation is issued; (b) a final regulation is issued; (c) a temporary regulation is issued; (d) a Tax Court memorandum is published

Back 74

(b) a final regulation is issed when a Treasury regulation becomes an official Treasury decision

Front 75

A private letter ruling is legally binding on the IRS if __________ (a) the taxpayer fully and accurately descibred the proposed transaction in the request and carries out the transaction as described; (b) the IrS is notified of any discrepancies on a taxpayer's return; (c) the taxpayer goes to the Tax Court and requests a formal decision; (d) none of the above

Back 75

(a)