1. Taxcomplianceistheprocessof:
a. filingnecessarytaxreturns
b. gatheringthefinancialinformationnecessarytoreporttaxableincome
c. representingataxpayeratanIRSaudit
d. alloftheabove
ANSWER: d
POINTS: 1
DIFFICULTY:Easy
2. Taxevasionis:
a. afraudulentactinvolvingillegalnonpaymentoftaxes
b. oneoftheobjectivesoftaxplanning
c. anactofdeferringtaxpaymentstofutureperiods
d. thesameastaxavoidanceasbothofthemresultinnonpaymentoftaxes
ANSWER: a
POINTS: 1
DIFFICULTY:Easy
3. Taxlitigationisaprocessof:
a. participatinginanadministrativeaudit
b. settlingtax-relateddisputesinacourtoflaw
c. filingamendedtaxreturnsasprescribedbytaxlaws
d. arrangingataxpayer’saffairstominimizetaxliabilities
ANSWER: b
POINTS: 1
DIFFICULTY:Easy
4. Regardingopentransactions,whichofthefollowingstatementsisINCORRECT?
a. thetransactionisnotyetcompleted
b. thepractitionercansuggestchangestoachieveabettertaxresult
,c. ataxpractitionerhassomedegreeofcontrolovertheclient’staxliability
d. thepractitionercanfixtheproblembyamendingtheclient’staxreturn
ANSWER: d
POINTS: 1
DIFFICULTY:Easy
,5. WhichofthefollowingstatementsbestdescribesCircular230?
a. Circular230hasbeenadoptedbytheAICPAasitssetofrulesofpracticeforCPAs.
b. Circular230isasetofTreasuryDepartmentethicalandlegalstandardsforthoseengaginginpracticebeforethe
IRS.
c. Circular230isasetofinternalrulesattheIRSdesignedtoprotecttaxpractitionersfromunfairdisciplinebytheI
RS.
d. Circular230isasetofethicalrulesfortaxpayers.
ANSWER: b
POINTS: 1
DIFFICULTY:Moderate
6. WhocanrepresentataxpayerbeforetheIRSAppealsOfficeunderCircular230?
a. ACPA
b. Anofficerofacorporationmayrepresentthecorporation
c. Anattorney
d. Alloftheabove
e. Onlyaandc
ANSWER: d
POINTS: 1
DIFFICULTY:Moderate
7. Inaclosedtransaction,thescopeoftaxplanningis:
a. morelimitedascomparedtoanopentransaction
b. limitedbytheIRSrulesofpractice
c. limitedtopresentingthetaxpayer’sfactstothegovernmentinthemostfavorable,legalmanner
d. Onlyaandc
ANSWER: d
POINTS: 1
DIFFICULTY:Moderate
, 8. Circular230includesrulesonallofthefollowingtopicsEXCEPT:
a. whoisauthorizedtopracticebeforetheIRS
b. standardsfor“coveredopinions”
c. compliancewithstateethicalrequirements
d. asetofbestpracticestoguidepractitioners
ANSWER: c
POINTS: 1
DIFFICULTY:Moderate
a. filingnecessarytaxreturns
b. gatheringthefinancialinformationnecessarytoreporttaxableincome
c. representingataxpayeratanIRSaudit
d. alloftheabove
ANSWER: d
POINTS: 1
DIFFICULTY:Easy
2. Taxevasionis:
a. afraudulentactinvolvingillegalnonpaymentoftaxes
b. oneoftheobjectivesoftaxplanning
c. anactofdeferringtaxpaymentstofutureperiods
d. thesameastaxavoidanceasbothofthemresultinnonpaymentoftaxes
ANSWER: a
POINTS: 1
DIFFICULTY:Easy
3. Taxlitigationisaprocessof:
a. participatinginanadministrativeaudit
b. settlingtax-relateddisputesinacourtoflaw
c. filingamendedtaxreturnsasprescribedbytaxlaws
d. arrangingataxpayer’saffairstominimizetaxliabilities
ANSWER: b
POINTS: 1
DIFFICULTY:Easy
4. Regardingopentransactions,whichofthefollowingstatementsisINCORRECT?
a. thetransactionisnotyetcompleted
b. thepractitionercansuggestchangestoachieveabettertaxresult
,c. ataxpractitionerhassomedegreeofcontrolovertheclient’staxliability
d. thepractitionercanfixtheproblembyamendingtheclient’staxreturn
ANSWER: d
POINTS: 1
DIFFICULTY:Easy
,5. WhichofthefollowingstatementsbestdescribesCircular230?
a. Circular230hasbeenadoptedbytheAICPAasitssetofrulesofpracticeforCPAs.
b. Circular230isasetofTreasuryDepartmentethicalandlegalstandardsforthoseengaginginpracticebeforethe
IRS.
c. Circular230isasetofinternalrulesattheIRSdesignedtoprotecttaxpractitionersfromunfairdisciplinebytheI
RS.
d. Circular230isasetofethicalrulesfortaxpayers.
ANSWER: b
POINTS: 1
DIFFICULTY:Moderate
6. WhocanrepresentataxpayerbeforetheIRSAppealsOfficeunderCircular230?
a. ACPA
b. Anofficerofacorporationmayrepresentthecorporation
c. Anattorney
d. Alloftheabove
e. Onlyaandc
ANSWER: d
POINTS: 1
DIFFICULTY:Moderate
7. Inaclosedtransaction,thescopeoftaxplanningis:
a. morelimitedascomparedtoanopentransaction
b. limitedbytheIRSrulesofpractice
c. limitedtopresentingthetaxpayer’sfactstothegovernmentinthemostfavorable,legalmanner
d. Onlyaandc
ANSWER: d
POINTS: 1
DIFFICULTY:Moderate
, 8. Circular230includesrulesonallofthefollowingtopicsEXCEPT:
a. whoisauthorizedtopracticebeforetheIRS
b. standardsfor“coveredopinions”
c. compliancewithstateethicalrequirements
d. asetofbestpracticestoguidepractitioners
ANSWER: c
POINTS: 1
DIFFICULTY:Moderate
