ENROLLED AGENT PRT 3 (3 OF 4)
UPDATED ACTUAL Questions and
CORRECT Answers
According to Circular 230, what is a conflict of interest? - CORRECT ANSWER -
Representation of a client that is materially limited by the tax
professional's responsibilities to other clients is a conflict of interest.
See Circular 230 §10.29.
A tax professional may represent clients even in the presence of a
conflict of interest. What type of informed consent must be obtained
from the affected clients in this situation? - CORRECT ANSWER - A written waiver of the
conflict of interest, signed by the affected
clients, is required. A copy of the waiver must be retained by the tax
professional for at least 36 months from the date of the conclusion of
the representation and be provided to the IRS upon request. See Circular 230 §10.29.
Based on Circular 230, when may the IRS suspend a tax professional? - CORRECT
ANSWER - The IRS can suspend a tax professional for incompetence. Circular 230 does
not cover alcoholism, clinical depression, or personal bankruptcy.
A tax practitioner may represent a client, even in the presence of a
conflict of interest, by obtaining an informed signed consent to a
waiver of the conflict. The waiver must be: - CORRECT ANSWER - A tax practitioner
who represents a client in the presence of a conflict
of interest must obtain an informed signed consent to a waiver of the
conflict, retain the waiver for at least 36 months from the date the
representation concludes, and provide it to the IRS upon request.
, Is it a conflict of interest when, on April 9 (close to the end of the filing
season), an EA delays return preparation for existing clients and
devotes the entire week to a new client's audit.? - CORRECT ANSWER - Yes, it is a
conflict of interest.
When researching tax issues, a tax professional will want to consider: - CORRECT
ANSWER - When researching tax issues, a tax professional should consider all
of the listed resources, IRS regulations, court cases, and revenue rulings.
What reference is the first resource to determine whether the IRS has
announced an opinion on a Tax Court decision? - CORRECT ANSWER - If the IRS
decides to announce its opinion (acquiescence or nonacquiescence)
of a Tax Court decision, it issues the original announcement in the Internal Revenue Bulletin.
What is secondary authority? - CORRECT ANSWER - Secondary authority explains or
summarizes the law, but does not
have the force of law. Revenue rulings are secondary authority.
What is primary authority? - CORRECT ANSWER - Primary authority is the actual law.
Court decisions are one example.
What is the purpose of Form 8821? - CORRECT ANSWER - Form 8821 is used to
authorize an unenrolled paid preparer, or other
named individual, to inspect and receive a taxpayer's information.
Form 2848 cannot be used for this purpose.
A tax professional may use a client's tax return information without written consent, if it is not
adverse to the client and the client has not expressly prohibited it, when: - CORRECT
ANSWER - A tax professional may use a client's tax return information without
written consent to prepare the tax return of the client's married
UPDATED ACTUAL Questions and
CORRECT Answers
According to Circular 230, what is a conflict of interest? - CORRECT ANSWER -
Representation of a client that is materially limited by the tax
professional's responsibilities to other clients is a conflict of interest.
See Circular 230 §10.29.
A tax professional may represent clients even in the presence of a
conflict of interest. What type of informed consent must be obtained
from the affected clients in this situation? - CORRECT ANSWER - A written waiver of the
conflict of interest, signed by the affected
clients, is required. A copy of the waiver must be retained by the tax
professional for at least 36 months from the date of the conclusion of
the representation and be provided to the IRS upon request. See Circular 230 §10.29.
Based on Circular 230, when may the IRS suspend a tax professional? - CORRECT
ANSWER - The IRS can suspend a tax professional for incompetence. Circular 230 does
not cover alcoholism, clinical depression, or personal bankruptcy.
A tax practitioner may represent a client, even in the presence of a
conflict of interest, by obtaining an informed signed consent to a
waiver of the conflict. The waiver must be: - CORRECT ANSWER - A tax practitioner
who represents a client in the presence of a conflict
of interest must obtain an informed signed consent to a waiver of the
conflict, retain the waiver for at least 36 months from the date the
representation concludes, and provide it to the IRS upon request.
, Is it a conflict of interest when, on April 9 (close to the end of the filing
season), an EA delays return preparation for existing clients and
devotes the entire week to a new client's audit.? - CORRECT ANSWER - Yes, it is a
conflict of interest.
When researching tax issues, a tax professional will want to consider: - CORRECT
ANSWER - When researching tax issues, a tax professional should consider all
of the listed resources, IRS regulations, court cases, and revenue rulings.
What reference is the first resource to determine whether the IRS has
announced an opinion on a Tax Court decision? - CORRECT ANSWER - If the IRS
decides to announce its opinion (acquiescence or nonacquiescence)
of a Tax Court decision, it issues the original announcement in the Internal Revenue Bulletin.
What is secondary authority? - CORRECT ANSWER - Secondary authority explains or
summarizes the law, but does not
have the force of law. Revenue rulings are secondary authority.
What is primary authority? - CORRECT ANSWER - Primary authority is the actual law.
Court decisions are one example.
What is the purpose of Form 8821? - CORRECT ANSWER - Form 8821 is used to
authorize an unenrolled paid preparer, or other
named individual, to inspect and receive a taxpayer's information.
Form 2848 cannot be used for this purpose.
A tax professional may use a client's tax return information without written consent, if it is not
adverse to the client and the client has not expressly prohibited it, when: - CORRECT
ANSWER - A tax professional may use a client's tax return information without
written consent to prepare the tax return of the client's married
