2. Tax Preparer & Cir. 230 Questions and Correct Answers
1. Circular 230 is applicable to who practice before the IRS.
a. attorneys
b. accountants
c. other tax professionals
d. all the above ANSWER A. The other professionals are not allowed to practice before the IRS.
2. According to IRS Cir 230, a conflict of interest exists if...
A. the client is a friend or family member of the practitioner.
B. the representation of one client will be directly adverse to another client.
C. the client is employed by a government agency.
D. None of the above ANSWER B. Option A, represents only a conflict of personal interest.
3. Under the Section 10.50 "Sanctions for Violation of the Regulations" in Circu-
lar No. 230, which of the following can the Secretary of the Treasury or delegate
have the authority to do to professional practitioners who engage in conduct
subject to sanction or violate the regulations?
a. Authority to censure, suspend or disbar.
b. Authority to disqualify.
c. Authority to impose monetary penalty.
d. All of the above. ANSWER D. Any of the authorities may be used if the practitioner is shown to be
incompetent or disreputable.
4. A practitioner must...
A. destroy all records once they are returned to a client.
B. get permission from the Director of the Office of Professional Responsibility
before accepting assistance from a disbarred or suspended person.
C. exercise Due Diligence in the preparation and filing of tax returns to the IRS.
D. All of the above ANSWER C. Destroying records is not a MUST. A disbarred person cannot assist with
or without permission.
5. A practitioner may be censured, suspended or disbarred from practice before
IRS due to incompetence and disreputable conduct, including ANSWER
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, 2. Tax Preparer & Cir. 230 Questions and Correct Answers
A. Conviction of any criminal offense under the revenue laws of United States.
B. Conviction of any criminal offense involving dishonesty or breach of trust.
C. Conviction of any felony under federal or state law for which the conduct
involved renders the practitioner unfit to practice before the IRS.
D. All of the above.
E. None of the above. ANSWER D
6. In Circular 230, means any person who is a member in good standing
of the bar of the highest court of any State, territory, possession of the United
States, including a Commonwealth, or the District of Columbia.
A. CPA
B. Attorney
C. Commissioner
D. Enrolled agents. ANSWER B,
7. Which of these is the best practice for tax advisors?
a. Communicate clearly with the client the terms of the engagement.Establish
the facts, (relevance, reasonableness of assumptions, applicability of law,de-
rived conclusions).
b. Advise client import of conclusions.
c. Act with fairness and integrity.
d. All of the above. ANSWER D, all the above.
8. To sign a tax return as a tax return preparer you need which of the following?
a. CPA License
b. PTIN holder
c. Enrolled Agent
d. Attorney
e. All the above may sign a tax return as a return preparer ANSWER B. Preparer must
have a PTIN
9. Which of the following is true about return of client tax related records
ANSWER
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1. Circular 230 is applicable to who practice before the IRS.
a. attorneys
b. accountants
c. other tax professionals
d. all the above ANSWER A. The other professionals are not allowed to practice before the IRS.
2. According to IRS Cir 230, a conflict of interest exists if...
A. the client is a friend or family member of the practitioner.
B. the representation of one client will be directly adverse to another client.
C. the client is employed by a government agency.
D. None of the above ANSWER B. Option A, represents only a conflict of personal interest.
3. Under the Section 10.50 "Sanctions for Violation of the Regulations" in Circu-
lar No. 230, which of the following can the Secretary of the Treasury or delegate
have the authority to do to professional practitioners who engage in conduct
subject to sanction or violate the regulations?
a. Authority to censure, suspend or disbar.
b. Authority to disqualify.
c. Authority to impose monetary penalty.
d. All of the above. ANSWER D. Any of the authorities may be used if the practitioner is shown to be
incompetent or disreputable.
4. A practitioner must...
A. destroy all records once they are returned to a client.
B. get permission from the Director of the Office of Professional Responsibility
before accepting assistance from a disbarred or suspended person.
C. exercise Due Diligence in the preparation and filing of tax returns to the IRS.
D. All of the above ANSWER C. Destroying records is not a MUST. A disbarred person cannot assist with
or without permission.
5. A practitioner may be censured, suspended or disbarred from practice before
IRS due to incompetence and disreputable conduct, including ANSWER
1/9
, 2. Tax Preparer & Cir. 230 Questions and Correct Answers
A. Conviction of any criminal offense under the revenue laws of United States.
B. Conviction of any criminal offense involving dishonesty or breach of trust.
C. Conviction of any felony under federal or state law for which the conduct
involved renders the practitioner unfit to practice before the IRS.
D. All of the above.
E. None of the above. ANSWER D
6. In Circular 230, means any person who is a member in good standing
of the bar of the highest court of any State, territory, possession of the United
States, including a Commonwealth, or the District of Columbia.
A. CPA
B. Attorney
C. Commissioner
D. Enrolled agents. ANSWER B,
7. Which of these is the best practice for tax advisors?
a. Communicate clearly with the client the terms of the engagement.Establish
the facts, (relevance, reasonableness of assumptions, applicability of law,de-
rived conclusions).
b. Advise client import of conclusions.
c. Act with fairness and integrity.
d. All of the above. ANSWER D, all the above.
8. To sign a tax return as a tax return preparer you need which of the following?
a. CPA License
b. PTIN holder
c. Enrolled Agent
d. Attorney
e. All the above may sign a tax return as a return preparer ANSWER B. Preparer must
have a PTIN
9. Which of the following is true about return of client tax related records
ANSWER
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