— Complete Practice Question Bank
(2026/2027)
Q1: What is Circular 230?
A. A publication that explains how to complete Form 1040
B. IRS guidelines for claiming the standard deduction
C. Regulations governing the practice of attorneys, CPAs, enrolled agents, enrolled actuaries,
and appraisers before the IRS [CORRECT]
D. A form used to report foreign bank accounts
Correct Answer: C
Rationale: Circular 230 contains the rules that govern practice before the IRS for specified tax
professionals. It is not a tax form or a guide to completing returns; those roles belong to
Publication 17 and Form 1040 instructions.
Q2: Which of the following is considered primary authority for federal tax law?
A. IRS Publication 17
B. Tax articles in professional journals
C. The Internal Revenue Code [CORRECT]
D. H&R Block course materials
Correct Answer: C
Rationale: Primary authority includes the Internal Revenue Code, Treasury Regulations, and
judicial decisions. Publications and commentaries are secondary authority and cannot be
cited as controlling law.
Q3: What is the primary purpose of Form 1040?
A. To request an installment agreement
B. To report gross income, calculate AGI and taxable income, and determine tax liability or
refund [CORRECT]
C. To claim only the earned income credit
, D. To report only self-employment income
Correct Answer: B
Rationale: Form 1040 is the U.S. Individual Income Tax Return used to report all items of gross
income, compute adjusted gross income and taxable income, and arrive at the final tax or
refund. Other forms serve narrower purposes.
Q4: Publication 17 is best described as:
A. The official regulations governing practice before the IRS
B. The Federal Income Tax Guide for Individuals [CORRECT]
C. A form for reporting capital gains
D. The statute that defines dependent tests
Correct Answer: B
Rationale: Publication 17 provides plain-language guidance on individual income tax topics. It
is secondary authority and does not itself create law.
Q5: Under Circular 230, which professionals are subject to its rules when practicing before the
IRS?
A. Only enrolled agents
B. Attorneys, CPAs, enrolled agents, enrolled actuaries, and appraisers [CORRECT]
C. Any taxpayer who prepares their own return
D. Only paid preparers who are not credentialed
Correct Answer: B
Rationale: Circular 230 specifically covers the listed credentialed practitioners. Unenrolled
preparers and self-preparers are governed by other rules.
Q6: Secondary authority includes which of the following?
A. Treasury Regulations
B. Tax Court decisions
C. IRS publications and tax periodicals [CORRECT]
D. The Internal Revenue Code