H&R BLOCK INCOME TAX COURSE
(CHAPTER 1 & INTRODUCTION)
WITH COMPLETE SOLUTIONS
The IRS requires every tax preparer to have a valid __________? - ANSWER-PTIN -
Preparer Tax Identification Number
What is a PTIN? - ANSWER-Preparer Tax Identification Number
What is the due date for filing federal income tax? - ANSWER-April 15th
What is U.S. income tax considered progressive? - ANSWER-Because it taxes a
larger percentage of income in higher-income taxpayers than on lower-income
taxpayers.
What does IRS stand for? - ANSWER-Internal Revenue Service - enforces the
Internal Revenue Code
Who are the 5 categories of professionals that can practice before the IRS? -
ANSWER-Attorneys, CPS's, Enrolled Agents, Enrolled Actuaries, Enrolled
Retirement Plan Agents
In Tax Law, there are two authorities, which are: - ANSWER-Primary & Secondary
What is Primary Authority for tax issues? - ANSWER-1. Internal Revenue Code
(IRC)
2. Regulations issued by the Treasury Department
3. Judicial Decisions
-Primary authority sources, as listed above in descending order of authority, are the
highest authority in determining the answers to tax-related questions.
What is Secondary Authority for tax issues? - ANSWER-1. Commentaries
2. Publications
3. Tax Periodicals
4. Common reference materials, such as dictionaries and encyclopedias
-Secondary authority sources can help you understand the intent of the law, or
provide an interpretation of the law. They are not binding authority.
What can a "Tax Preparer" do as far as representing a taxpayer? - ANSWER-May
represent a taxpayer before revenue agents, customer service reps, or similar
officers and employees of the IRS, including Taxpayer Advocate Service, only during
an examination, if the paid tax return preparer signed the tax return or claim for
refund that is under examination.
, a paid "tax preparer" CANNOT - ANSWER--Represent a taxpayer before any of
these IRS officers: appeals, revenue, counsel, or similar officers and employees of
the IRS.
-Provide tax advice other than advice necessary to prepare a return, a claim for
refund, or other document intended to be submitted to the IRS.
What is "Circular 230"? - ANSWER-Regulations Governing Practice before the
Internal Revenue Service.
What is "Circular 230", in greater detail? - ANSWER-These rules require attorneys,
those qualified to practice as certified public accountants, enrolled agents, and other
persons who prepare tax returns and provide tax advice to conduct business with
high ethical standards that protect the taxpayers.
What is Form 1040? - ANSWER-The current base form for individual income tax
returns. *In addition, numerous other forms and schedules are required to support
the line entries on these base forms.
What is Form 1040-SR? - ANSWER-U.S. Tax Return for Seniors - Designed for
taxpayers aged 65 and over. Same rules apply to the regular 1040. Differences are
line numbers and SR has larger print.
Income + Additional Income - Adjustments to income = - ANSWER-Adjusted Gross
Income (AGI)
payment of this tax contributes to the taxpayer's medicare coverage under the U.S.
social security system. The current tax rate is 1.45% of gross wages (2.9% for self-
employed individuals). An additional medicare tax may apply if the taxpayer's wages
and compensation exceed a threshold amount.
What is a Nonrefundable Credit? - ANSWER-A credit which cannot exceed the
taxpayer's tax liability.
What is Social Security Tax Withheld? - ANSWER-The employee's share of social
security tax that was taken out of the employee's pay and submitted along with the
employer's share to the IRS by the employer. The employee pays 6.2% and the
employer pays 6.2% on certain employee's gross wage thresholds.
What is Social Security Wages? - ANSWER-Total wages paid to an employee that
are subject to this tax. This amount does not include tips. Wages are also subject to
medicare tax.
Tax Preparers who expect to file 11 or more Form 1040's during a calendar year
SHALL use.... - ANSWER-IRS e-file (electronic filing). Only exception is if there is an
exemption or approved hardship waiver.
What is IRS Publication 17? - ANSWER-The Federal Income Tax Guide for
Individuals
(CHAPTER 1 & INTRODUCTION)
WITH COMPLETE SOLUTIONS
The IRS requires every tax preparer to have a valid __________? - ANSWER-PTIN -
Preparer Tax Identification Number
What is a PTIN? - ANSWER-Preparer Tax Identification Number
What is the due date for filing federal income tax? - ANSWER-April 15th
What is U.S. income tax considered progressive? - ANSWER-Because it taxes a
larger percentage of income in higher-income taxpayers than on lower-income
taxpayers.
What does IRS stand for? - ANSWER-Internal Revenue Service - enforces the
Internal Revenue Code
Who are the 5 categories of professionals that can practice before the IRS? -
ANSWER-Attorneys, CPS's, Enrolled Agents, Enrolled Actuaries, Enrolled
Retirement Plan Agents
In Tax Law, there are two authorities, which are: - ANSWER-Primary & Secondary
What is Primary Authority for tax issues? - ANSWER-1. Internal Revenue Code
(IRC)
2. Regulations issued by the Treasury Department
3. Judicial Decisions
-Primary authority sources, as listed above in descending order of authority, are the
highest authority in determining the answers to tax-related questions.
What is Secondary Authority for tax issues? - ANSWER-1. Commentaries
2. Publications
3. Tax Periodicals
4. Common reference materials, such as dictionaries and encyclopedias
-Secondary authority sources can help you understand the intent of the law, or
provide an interpretation of the law. They are not binding authority.
What can a "Tax Preparer" do as far as representing a taxpayer? - ANSWER-May
represent a taxpayer before revenue agents, customer service reps, or similar
officers and employees of the IRS, including Taxpayer Advocate Service, only during
an examination, if the paid tax return preparer signed the tax return or claim for
refund that is under examination.
, a paid "tax preparer" CANNOT - ANSWER--Represent a taxpayer before any of
these IRS officers: appeals, revenue, counsel, or similar officers and employees of
the IRS.
-Provide tax advice other than advice necessary to prepare a return, a claim for
refund, or other document intended to be submitted to the IRS.
What is "Circular 230"? - ANSWER-Regulations Governing Practice before the
Internal Revenue Service.
What is "Circular 230", in greater detail? - ANSWER-These rules require attorneys,
those qualified to practice as certified public accountants, enrolled agents, and other
persons who prepare tax returns and provide tax advice to conduct business with
high ethical standards that protect the taxpayers.
What is Form 1040? - ANSWER-The current base form for individual income tax
returns. *In addition, numerous other forms and schedules are required to support
the line entries on these base forms.
What is Form 1040-SR? - ANSWER-U.S. Tax Return for Seniors - Designed for
taxpayers aged 65 and over. Same rules apply to the regular 1040. Differences are
line numbers and SR has larger print.
Income + Additional Income - Adjustments to income = - ANSWER-Adjusted Gross
Income (AGI)
payment of this tax contributes to the taxpayer's medicare coverage under the U.S.
social security system. The current tax rate is 1.45% of gross wages (2.9% for self-
employed individuals). An additional medicare tax may apply if the taxpayer's wages
and compensation exceed a threshold amount.
What is a Nonrefundable Credit? - ANSWER-A credit which cannot exceed the
taxpayer's tax liability.
What is Social Security Tax Withheld? - ANSWER-The employee's share of social
security tax that was taken out of the employee's pay and submitted along with the
employer's share to the IRS by the employer. The employee pays 6.2% and the
employer pays 6.2% on certain employee's gross wage thresholds.
What is Social Security Wages? - ANSWER-Total wages paid to an employee that
are subject to this tax. This amount does not include tips. Wages are also subject to
medicare tax.
Tax Preparers who expect to file 11 or more Form 1040's during a calendar year
SHALL use.... - ANSWER-IRS e-file (electronic filing). Only exception is if there is an
exemption or approved hardship waiver.
What is IRS Publication 17? - ANSWER-The Federal Income Tax Guide for
Individuals
