IRS EA Exam 3 – Representation
Question and answers verified to pass
Taxpayer Advocate Service - correct answers A taxpayer can request
Taxpayer Advocate Service Assistance on Form 911 and must indicate one or
more of the following reasons:
-he is experiencing economic harm or is about to suffer economic harm
-he is facing an immediate threat of adverse action
-he will suffer irreparable injury or long-term adverse impact if relief is not
granted
-he will incur significant costs of relief is not granted (including fees for
professional representation)
-he has experienced a delay of more than 30 days to resolve a tax account
problem
-he has not received a response or resolution to his problem or inquiry by the
date promised
-a system or procedure has either failed to operate as intended or failed to
resolve the taxpayer's problem or dispute with the IRS
-the manner in which the tax laws are being administered raises concerns of
equity or has impaired or will impair the taxpayer's rights
Practice before the IRS - correct answers -Corresponding and communicating
with the IRS
-Representing a taxpayer at conferences, hearings, or meetings with the IRS
-Preparing and filing documents with the IRS
-Providing written advice that has a potential for tax avoidance or evasion
(opinions on tax sheltering)
,US citizenship is NOT required to practice before the IRS.
Tax preparation, in and of itself, does NOT constitute "practice before the IRS"
(from landmark Loving v IRS case where courts decided that IRS does not
have authority to regulate preparers).
Representing a taxpayer before the US Tax Court has its own set of rules and
isn't considered practicing before the IRS. Merely operating as a witness or
translating isn't either, but they can't advocate for the taxpayer.
PTIN - correct answers Preparer Tax Identification Number
Mandatory 9 digit number that preparers (and CPAs and attorneys) must use
when they prepare and sign a tax return or claim for refund. Or if they prepare
returns for compensation.
It is a requirement for Enrolled Agents.
Have to renew your existing PTIN each year by December 31 either online or
by mailing W-12. It now includes a Data Security Disclaimer.
The IRS has the right to charge a fee for a PTIN.
Supervised Preparers - correct answers Individuals that don't sign the return
but help prepare under supervision of preparer.
They must have a PTIN but they may not sign, represent taxpayers, or identity
themselves as circular 230 Preparers.
,Exceptions to PTIN Requirements - correct answers An individual who
prepares a tax return with no agreement for compensation is not considered a
tax return preparers. (You can prepare returns for friends or family members
for free or for cookies.:))
A person who gives an opinion about events that have not yet happened.
A person who furnishes typing, copying, or mechanical assistance.
A person who prepares the return of his employer. (ie full time employee or
bookkeeper filing payroll taxes).
A fiduciary who prepares a tax return for a trust or an estate.
An unpaid volunteer for VITA or TCPE (Tax Counseling for the Elderly)
An employee of the IRS who performs official duties by preparing a return for
a taxpayer who requests it.
An attorney or a CPA doesn't need a PTIN unless they prepare returns for
compensation.
Enrolled Agent Licensing - correct answers 1. Pass all three tests of SEE
(Exam Track) OR Possess a min of 5 years of past service with the IRS and
technical assistance as outlined in Circular 230 (Previous Experience Track)
2. File Form 23
3. Pass a background check, which includes a tax compliance and suitability
check.
, You must be at least 18 years old and can't have a felony conviction.
Any individual who is involved in disreputable or criminal conduct is subject to
disciplinary action or denial of enrollment. Failure to timely file or to pay one's
taxes may also be grounds for denial. The RPO (Return Preparer Office) must
inform the applicant of the reason and then the applicant can appeal within 30
days from date of notice.
Enrollment becomes official on the date listed on your enrollment card (Form
24-A) even if you haven't received your card yet.
IRS Power of Attorney - correct answers A POA is a taxpayer's written
authorization for an individual to act on the taxpayer's behalf in tax matters.
Requested on Form 2848 (Power of Attorney and Declaration of
Representative) where preparer must attest he is subject to Circular 230.
Up to four representatives can be authorized per form.
Form 2848 must be used to describe the specific tax matters the
representatives are able to handle, the specific time periods, and the specific
acts. Even joint filers must submit separate forms.
Must be eligible to practice before the IRS I order to sign. (Sometimes
unenrolled individuals can if they have limited practice rights as a family
member, an executor, or a preparer with an AFSP certificate.)
Enrolled Practitioners - correct answers Attorneys, CPAs, EAs, enrolled
retirement plan agents (ERPAs) or enrolled actuaries authorized to practice
before the IRS. Can practice by virtue of their licensing (vs relationship)
Question and answers verified to pass
Taxpayer Advocate Service - correct answers A taxpayer can request
Taxpayer Advocate Service Assistance on Form 911 and must indicate one or
more of the following reasons:
-he is experiencing economic harm or is about to suffer economic harm
-he is facing an immediate threat of adverse action
-he will suffer irreparable injury or long-term adverse impact if relief is not
granted
-he will incur significant costs of relief is not granted (including fees for
professional representation)
-he has experienced a delay of more than 30 days to resolve a tax account
problem
-he has not received a response or resolution to his problem or inquiry by the
date promised
-a system or procedure has either failed to operate as intended or failed to
resolve the taxpayer's problem or dispute with the IRS
-the manner in which the tax laws are being administered raises concerns of
equity or has impaired or will impair the taxpayer's rights
Practice before the IRS - correct answers -Corresponding and communicating
with the IRS
-Representing a taxpayer at conferences, hearings, or meetings with the IRS
-Preparing and filing documents with the IRS
-Providing written advice that has a potential for tax avoidance or evasion
(opinions on tax sheltering)
,US citizenship is NOT required to practice before the IRS.
Tax preparation, in and of itself, does NOT constitute "practice before the IRS"
(from landmark Loving v IRS case where courts decided that IRS does not
have authority to regulate preparers).
Representing a taxpayer before the US Tax Court has its own set of rules and
isn't considered practicing before the IRS. Merely operating as a witness or
translating isn't either, but they can't advocate for the taxpayer.
PTIN - correct answers Preparer Tax Identification Number
Mandatory 9 digit number that preparers (and CPAs and attorneys) must use
when they prepare and sign a tax return or claim for refund. Or if they prepare
returns for compensation.
It is a requirement for Enrolled Agents.
Have to renew your existing PTIN each year by December 31 either online or
by mailing W-12. It now includes a Data Security Disclaimer.
The IRS has the right to charge a fee for a PTIN.
Supervised Preparers - correct answers Individuals that don't sign the return
but help prepare under supervision of preparer.
They must have a PTIN but they may not sign, represent taxpayers, or identity
themselves as circular 230 Preparers.
,Exceptions to PTIN Requirements - correct answers An individual who
prepares a tax return with no agreement for compensation is not considered a
tax return preparers. (You can prepare returns for friends or family members
for free or for cookies.:))
A person who gives an opinion about events that have not yet happened.
A person who furnishes typing, copying, or mechanical assistance.
A person who prepares the return of his employer. (ie full time employee or
bookkeeper filing payroll taxes).
A fiduciary who prepares a tax return for a trust or an estate.
An unpaid volunteer for VITA or TCPE (Tax Counseling for the Elderly)
An employee of the IRS who performs official duties by preparing a return for
a taxpayer who requests it.
An attorney or a CPA doesn't need a PTIN unless they prepare returns for
compensation.
Enrolled Agent Licensing - correct answers 1. Pass all three tests of SEE
(Exam Track) OR Possess a min of 5 years of past service with the IRS and
technical assistance as outlined in Circular 230 (Previous Experience Track)
2. File Form 23
3. Pass a background check, which includes a tax compliance and suitability
check.
, You must be at least 18 years old and can't have a felony conviction.
Any individual who is involved in disreputable or criminal conduct is subject to
disciplinary action or denial of enrollment. Failure to timely file or to pay one's
taxes may also be grounds for denial. The RPO (Return Preparer Office) must
inform the applicant of the reason and then the applicant can appeal within 30
days from date of notice.
Enrollment becomes official on the date listed on your enrollment card (Form
24-A) even if you haven't received your card yet.
IRS Power of Attorney - correct answers A POA is a taxpayer's written
authorization for an individual to act on the taxpayer's behalf in tax matters.
Requested on Form 2848 (Power of Attorney and Declaration of
Representative) where preparer must attest he is subject to Circular 230.
Up to four representatives can be authorized per form.
Form 2848 must be used to describe the specific tax matters the
representatives are able to handle, the specific time periods, and the specific
acts. Even joint filers must submit separate forms.
Must be eligible to practice before the IRS I order to sign. (Sometimes
unenrolled individuals can if they have limited practice rights as a family
member, an executor, or a preparer with an AFSP certificate.)
Enrolled Practitioners - correct answers Attorneys, CPAs, EAs, enrolled
retirement plan agents (ERPAs) or enrolled actuaries authorized to practice
before the IRS. Can practice by virtue of their licensing (vs relationship)
