CERTIFIED TAX PREPARER (CTP) QUESTIONS AND CORRECT ANSWERS
1. TAX HISTORY ANSWERS * 1861 - Civil War Congress passed Revenue Act of 1861, personal income tax to
help pay war expenses
1 year latter repelled
*President Lincoln created commissioner position of Internal Revenue.
* 1894 Flat Ax, repelled 1 year latter
* 1909 - 16th Amendment passed by Congress on July 2, ratified February 3, 1913.
2. TAX LAW ANSWERS * Article 1, Section 7 of the US Constitution
* All revenue bills must originate in the House of Representatives.
* Within the House of Representatives, revenue bills are dealt with by the House Ways and Means Committee.
* The Ways and Means Committee initially writes a tax law bill.
*Rules Committee controls when new legislation goes to the House for ratification.
* If passed, the tax law bill may be considered by the Senate.
* Senate Finance Committee has jurisdiction over tax law bills.
* Fifty-one votes are needed to pass a bill in the Senate.
* The IRS commissioner and Chief Counsel are selected by the President and confirmed by the Senate.
3. 16th AMENDMENT ANSWERS * 1913 Wyoming ratified
* Gave Congress the authority to enact income tax.
4. IRS ANSWERS * Bureau of Internal Revenue changed to Internal Revenue Service
* IRS Commissioner and Chief Counsel are selected by the President and confirmed by the Senate.
* IRS Restructuring and Reform Act of 1998 - reorganization of IRS.
5. REVIEW PRIOR RETURN ANSWERS * Review the taxpayer's return from last year for accuracy for
comparison to the current year return.
• Tax loss carry forward information.
• Withholding information.
• Information about how certain income may have been treated, such as capital gains or traditional income.
* Certain items from the prior year return may be needed to complete the current-year return.
6. COLLECTION OF BIOGRAPHICAL INFORMATION ANSWERS * Get taxpayers oflcial ID
ANSWERS License, Pass- port, etc
* US Citizen - Born in US or naturalized Alien, born in Puerto Rico, born in Guam, born in US Virgin Islands
* US National - born in American Samoa or Commonwealth of Northern Marina Islands.
* Alien - Not US Citizen or US National
Immigrant - Alien with rights to perminently reside and work in US (Lawful Permanent Resident- LPR)
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, CERTIFIED TAX PREPARER (CTP) QUESTIONS AND CORRECT ANSWERS
* Illegal Alien - Undocumented alien who is in the country illegally or entered legally and visa expired.
* Non Immigrant Visa - Special categories under which a person is admitted to the US - Student Visa, Work Visa,
Diplomat, etc
* Visa Waiver Program - Enables citizens of participating countries to travel to the United States for tourism or business
for 90 days or less without obtaining a US visa.
7. Filing Status ANSWERS 1. Single
2. Married filing jointly
3. Married filing separately
4. Head of Household
5. Qualifying Widow(er) with dependent child(ren).
8. Tax Preparers Must ANSWERS ANSWERS *Electronically file Federal income Tax Returns 11 or
more during the year as of January 1, 2011
* Must Obtain Perparer Tax Identification Number (PTIN)
* Must renew PTIN every year starting October and completing December 31st.
9. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBER (IP PIN)
ANSWERS * Enter
the number below daytime phone number on tax return form
* If taxpayer did not receive notice with IP PIN, leave it blank
Given to Taxpayers by IRS if ANSWERS
* Reported to IRS they have been victims of Identity Theft
* Given IRS Information that verifies their identity
* Had identity theft indicator applied to their account
* Helps prevent misuse of taxpayers SSN or TIN.
* New IP PINS issued every year.
10. ACCOUNTING PERIODS ANSWERS Taxpayer must use tax year to figure out their
taxable income ANSWERS Calendar year
Fiscal year
52-53 Week tax Year
Short Tax year
11. ACCOUNTING PERIODS-Calendar year ANSWERS 12 consecutive months beginning on Januar
1st and
ending on December 31st.
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1. TAX HISTORY ANSWERS * 1861 - Civil War Congress passed Revenue Act of 1861, personal income tax to
help pay war expenses
1 year latter repelled
*President Lincoln created commissioner position of Internal Revenue.
* 1894 Flat Ax, repelled 1 year latter
* 1909 - 16th Amendment passed by Congress on July 2, ratified February 3, 1913.
2. TAX LAW ANSWERS * Article 1, Section 7 of the US Constitution
* All revenue bills must originate in the House of Representatives.
* Within the House of Representatives, revenue bills are dealt with by the House Ways and Means Committee.
* The Ways and Means Committee initially writes a tax law bill.
*Rules Committee controls when new legislation goes to the House for ratification.
* If passed, the tax law bill may be considered by the Senate.
* Senate Finance Committee has jurisdiction over tax law bills.
* Fifty-one votes are needed to pass a bill in the Senate.
* The IRS commissioner and Chief Counsel are selected by the President and confirmed by the Senate.
3. 16th AMENDMENT ANSWERS * 1913 Wyoming ratified
* Gave Congress the authority to enact income tax.
4. IRS ANSWERS * Bureau of Internal Revenue changed to Internal Revenue Service
* IRS Commissioner and Chief Counsel are selected by the President and confirmed by the Senate.
* IRS Restructuring and Reform Act of 1998 - reorganization of IRS.
5. REVIEW PRIOR RETURN ANSWERS * Review the taxpayer's return from last year for accuracy for
comparison to the current year return.
• Tax loss carry forward information.
• Withholding information.
• Information about how certain income may have been treated, such as capital gains or traditional income.
* Certain items from the prior year return may be needed to complete the current-year return.
6. COLLECTION OF BIOGRAPHICAL INFORMATION ANSWERS * Get taxpayers oflcial ID
ANSWERS License, Pass- port, etc
* US Citizen - Born in US or naturalized Alien, born in Puerto Rico, born in Guam, born in US Virgin Islands
* US National - born in American Samoa or Commonwealth of Northern Marina Islands.
* Alien - Not US Citizen or US National
Immigrant - Alien with rights to perminently reside and work in US (Lawful Permanent Resident- LPR)
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15
, CERTIFIED TAX PREPARER (CTP) QUESTIONS AND CORRECT ANSWERS
* Illegal Alien - Undocumented alien who is in the country illegally or entered legally and visa expired.
* Non Immigrant Visa - Special categories under which a person is admitted to the US - Student Visa, Work Visa,
Diplomat, etc
* Visa Waiver Program - Enables citizens of participating countries to travel to the United States for tourism or business
for 90 days or less without obtaining a US visa.
7. Filing Status ANSWERS 1. Single
2. Married filing jointly
3. Married filing separately
4. Head of Household
5. Qualifying Widow(er) with dependent child(ren).
8. Tax Preparers Must ANSWERS ANSWERS *Electronically file Federal income Tax Returns 11 or
more during the year as of January 1, 2011
* Must Obtain Perparer Tax Identification Number (PTIN)
* Must renew PTIN every year starting October and completing December 31st.
9. IDENTITY PROTECTION PERSONAL IDENTIFICATION NUMBER (IP PIN)
ANSWERS * Enter
the number below daytime phone number on tax return form
* If taxpayer did not receive notice with IP PIN, leave it blank
Given to Taxpayers by IRS if ANSWERS
* Reported to IRS they have been victims of Identity Theft
* Given IRS Information that verifies their identity
* Had identity theft indicator applied to their account
* Helps prevent misuse of taxpayers SSN or TIN.
* New IP PINS issued every year.
10. ACCOUNTING PERIODS ANSWERS Taxpayer must use tax year to figure out their
taxable income ANSWERS Calendar year
Fiscal year
52-53 Week tax Year
Short Tax year
11. ACCOUNTING PERIODS-Calendar year ANSWERS 12 consecutive months beginning on Januar
1st and
ending on December 31st.
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