Enrolled Agent Exam Part 3 -Solved
According to circular 230, what are "best practices" for tax advisers? - ANSWER--
Communicating clearly with the client regarding the terms of the engagement
- Establishing the facts, determining which facts are relevant, evaluating the
reasonableness of an assumption or representations, relating the applicable law to the
relevant facts, and arriving at a conclusion supported by the law and the facts.
- Advising the client regarding the import (impact) of any conclusions reached
- Acting fairly and with integrity in practice before the IRS
Are IRS employees bound by revenue rulings? - ANSWER-Yes
By signing a form 2848, the representative declares under penalties of perjury that he or
she is aware of what? - ANSWER-The regulation in Treasury Department Circular No.
230.
Can a practitioner offer a consent to the IRS to be voluntarily sanctioned in lieu of a
proceeding being instituted or continued? - ANSWER-Yes. The IRS may accept or
decline the offer. If the IRS declines, it may make a counteroffer containing different
terms.
Can someone with a power of attorney delegate or substitute authority to another
individual? - ANSWER-Authority may be delegated or substituted for the taxpayer by
the individual with the power of attorney if the power to delegate or substitute was
specifically granted in the original power of attorney. If the authority is delegated to
another individual then both the old and new power of attorney holders have authority. If
the authority is substituted then only the new power of attorney holder will have
authority.
Can you prepare tax returns when you are suspended from Practice before the IRS? -
ANSWER-Yes because preparing tax returns is not considered "practice before the
IRS."
Can you take a case to the tax court before you receive the "90 day letter?" - ANSWER-
No
Circular 230 requires tax return preparers to exercise due diligence in what three
specific situations? - ANSWER-A preparer must exercise due diligence as to accuracy
in (1)any action involving tax returns or any other document related to IRS matters,
(2)oral or written representations made to the department of treasury or the IRS, and
(3)oral or written representation made to a client regarding any IRS matter.
Circular 230 requires the IRS make available to the public certain rosters pertaining to
practice before the IRS. What is included on these rosters? - ANSWER-- Individuals or
, entities sanctioned from practice before the IRS or upon whom a monetary penalty was
imposed.
- Enrolled agents and enrolled retirement plan agents: including those who are actively
enrolled, in inactive status for failure to meet renewal requirements, and in voluntary
inactive retirement status, and who have voluntarily resigned instead of facing a
disciplinary proceeding.
- Registered tax return preparers
- Disqualified appraisers
- Qualified continuing education providers
For the IRS to seize a principle residence they must get approval from who? -
ANSWER-They must get approval from a judge or magistrate district court of the United
States.
Generally, communications between a federally authorized tax practitioner and a
taxpayer have the same confidentiality as with a client and an attorney. What are the
confidential communications? - ANSWER-- Advice on tax matters within the scope of
the practitioner's authority to practice before the IRS
- Anything that would be confidential between the individual and an attorney
- Matters related to noncriminal tax matters before the IRS
- Matters related to noncriminal tax proceedings brought in court by or against the
United States
- Are not related to tax shelters
How do you appeal the decision of an administrative law judge? - ANSWER-File an
appeal to the secretary of treasury or delegate deciding appeals within 30 days of the
decision. With the notice of appeal, the appealing party must include a brief that states
exceptions to the decision of the Administrative Law Judge and supporting reasons for
such exceptions; a copy must be served on the opposing party. The secretary of the
treasury or delegate will make a decision within 180 days of the appeal.
How do you file an appeal after an Administrative Law Judge makes a decision on a
complaint filed against a practitioner? - ANSWER-You must file a notice of appeal with
the secretary of treasury within 30 days after the ALJ makes his decision. With the
appeal, you must submit a brief that contains exceptions of the decision and supporting
reasons for such exceptions. This must be sent to the opposing party as well. The
opposing party may then file a brief response within 30 days of the appeal notice.
How does an enrolled preparer apply for an EFIN (electronic filing identification
number)? - ANSWER-1. Create an IRS e-services account
2. Submit your application to become an authorized IRS e-services provider
3. Pass a suitability check
Be prepared to wait up to 45 days for approval
How does the IRS define "negligence" in respect to errors on tax returns? - ANSWER-
The term "negligence" includes any failure to make a reasonable attempt to comply with
According to circular 230, what are "best practices" for tax advisers? - ANSWER--
Communicating clearly with the client regarding the terms of the engagement
- Establishing the facts, determining which facts are relevant, evaluating the
reasonableness of an assumption or representations, relating the applicable law to the
relevant facts, and arriving at a conclusion supported by the law and the facts.
- Advising the client regarding the import (impact) of any conclusions reached
- Acting fairly and with integrity in practice before the IRS
Are IRS employees bound by revenue rulings? - ANSWER-Yes
By signing a form 2848, the representative declares under penalties of perjury that he or
she is aware of what? - ANSWER-The regulation in Treasury Department Circular No.
230.
Can a practitioner offer a consent to the IRS to be voluntarily sanctioned in lieu of a
proceeding being instituted or continued? - ANSWER-Yes. The IRS may accept or
decline the offer. If the IRS declines, it may make a counteroffer containing different
terms.
Can someone with a power of attorney delegate or substitute authority to another
individual? - ANSWER-Authority may be delegated or substituted for the taxpayer by
the individual with the power of attorney if the power to delegate or substitute was
specifically granted in the original power of attorney. If the authority is delegated to
another individual then both the old and new power of attorney holders have authority. If
the authority is substituted then only the new power of attorney holder will have
authority.
Can you prepare tax returns when you are suspended from Practice before the IRS? -
ANSWER-Yes because preparing tax returns is not considered "practice before the
IRS."
Can you take a case to the tax court before you receive the "90 day letter?" - ANSWER-
No
Circular 230 requires tax return preparers to exercise due diligence in what three
specific situations? - ANSWER-A preparer must exercise due diligence as to accuracy
in (1)any action involving tax returns or any other document related to IRS matters,
(2)oral or written representations made to the department of treasury or the IRS, and
(3)oral or written representation made to a client regarding any IRS matter.
Circular 230 requires the IRS make available to the public certain rosters pertaining to
practice before the IRS. What is included on these rosters? - ANSWER-- Individuals or
, entities sanctioned from practice before the IRS or upon whom a monetary penalty was
imposed.
- Enrolled agents and enrolled retirement plan agents: including those who are actively
enrolled, in inactive status for failure to meet renewal requirements, and in voluntary
inactive retirement status, and who have voluntarily resigned instead of facing a
disciplinary proceeding.
- Registered tax return preparers
- Disqualified appraisers
- Qualified continuing education providers
For the IRS to seize a principle residence they must get approval from who? -
ANSWER-They must get approval from a judge or magistrate district court of the United
States.
Generally, communications between a federally authorized tax practitioner and a
taxpayer have the same confidentiality as with a client and an attorney. What are the
confidential communications? - ANSWER-- Advice on tax matters within the scope of
the practitioner's authority to practice before the IRS
- Anything that would be confidential between the individual and an attorney
- Matters related to noncriminal tax matters before the IRS
- Matters related to noncriminal tax proceedings brought in court by or against the
United States
- Are not related to tax shelters
How do you appeal the decision of an administrative law judge? - ANSWER-File an
appeal to the secretary of treasury or delegate deciding appeals within 30 days of the
decision. With the notice of appeal, the appealing party must include a brief that states
exceptions to the decision of the Administrative Law Judge and supporting reasons for
such exceptions; a copy must be served on the opposing party. The secretary of the
treasury or delegate will make a decision within 180 days of the appeal.
How do you file an appeal after an Administrative Law Judge makes a decision on a
complaint filed against a practitioner? - ANSWER-You must file a notice of appeal with
the secretary of treasury within 30 days after the ALJ makes his decision. With the
appeal, you must submit a brief that contains exceptions of the decision and supporting
reasons for such exceptions. This must be sent to the opposing party as well. The
opposing party may then file a brief response within 30 days of the appeal notice.
How does an enrolled preparer apply for an EFIN (electronic filing identification
number)? - ANSWER-1. Create an IRS e-services account
2. Submit your application to become an authorized IRS e-services provider
3. Pass a suitability check
Be prepared to wait up to 45 days for approval
How does the IRS define "negligence" in respect to errors on tax returns? - ANSWER-
The term "negligence" includes any failure to make a reasonable attempt to comply with
