HRB 27 QUESTIONS AND ANSWERS SURE A+
✔✔What is a conflict of interest? - ✔✔A conflict of interest is when one's situation might
benefit at the expense of another's situation. (26.3)
✔✔What actions can resolve a conflict of interest? - ✔✔A conflict of interest is resolved
when it is acknowledged, disclosed to all parties, and the parties have consented to
waiving the conflict. (26.3)
✔✔What client information is confidential? - ✔✔Any information that could potentially
identify the client is confidential.
Information includes (but is not limited to):
• Name
• Address and phone number
• Social security numbers
• Place of employment
• Any information from a tax return (26.4)
✔✔Is it acceptable for a Tax Professional to leave a detailed phone message for a
client, letting them know their tax return is complete? - ✔✔• Tax Professionals must
have prior consent from the client to leave phone messages related to their tax return.
• The fact that a taxpayer is the client of a Tax Professional or tax preparation business
is confidential information that must not be disclosed. (26.5)
✔✔What is a Tax Professional's responsibility upon finding out that a client has not
complied with any tax law? - ✔✔A Tax Professional must advise the client of the
noncompliance and the consequences for not correcting the situation. (26.7)
✔✔What action should a Tax Professional take if a client insists on reporting information
that is inaccurate? - ✔✔A Tax Professional should never prepare a return that contains
inaccurate information. (26.7)
, ✔✔If the employee thinks his Form W-2 is not correct, what should he do? - ✔✔• If the
name or social security number is incorrect, the taxpayer may change it himself and
need not obtain a corrected W-2 before filing his tax return.
• The employer should be notified of the error and asked to update his records.
• Furthermore, the employee's social security number and earnings records should be
verified with the Social Security Administration to ensure that the earnings were properly
credited. (2.17)
✔✔Where can the regular standard deduction amounts be found? - ✔✔• In the left-hand
margin at the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be
claimed as dependents by other taxpayers.
[2010]
✔✔What is the exemption amount for 2009? - ✔✔$3,650 with a reduction for higher-
income taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
✔✔Are early distributions from qualified retirement plans always penalized? - ✔✔No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
✔✔How does a Tax Professional know if a distribution exception applies? - ✔✔• He can
determine that by using thorough interview questions when discussing the distribution
with the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional.
(22.12)
✔✔Is there a time limit for filing amended returns? - ✔✔Yes.
Three years from the date the return was filed or within two years the tax was paid,
whichever is later. (23.3)
✔✔A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return
was examined by the IRS on January 9, 2009 and $280 additional tax was paid that
date. What is the latest date on which an amended return may be filed? - ✔✔January 9,
2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date
the amended return was filed). (23.3)
✔✔What is a conflict of interest? - ✔✔A conflict of interest is when one's situation might
benefit at the expense of another's situation. (26.3)
✔✔What actions can resolve a conflict of interest? - ✔✔A conflict of interest is resolved
when it is acknowledged, disclosed to all parties, and the parties have consented to
waiving the conflict. (26.3)
✔✔What client information is confidential? - ✔✔Any information that could potentially
identify the client is confidential.
Information includes (but is not limited to):
• Name
• Address and phone number
• Social security numbers
• Place of employment
• Any information from a tax return (26.4)
✔✔Is it acceptable for a Tax Professional to leave a detailed phone message for a
client, letting them know their tax return is complete? - ✔✔• Tax Professionals must
have prior consent from the client to leave phone messages related to their tax return.
• The fact that a taxpayer is the client of a Tax Professional or tax preparation business
is confidential information that must not be disclosed. (26.5)
✔✔What is a Tax Professional's responsibility upon finding out that a client has not
complied with any tax law? - ✔✔A Tax Professional must advise the client of the
noncompliance and the consequences for not correcting the situation. (26.7)
✔✔What action should a Tax Professional take if a client insists on reporting information
that is inaccurate? - ✔✔A Tax Professional should never prepare a return that contains
inaccurate information. (26.7)
, ✔✔If the employee thinks his Form W-2 is not correct, what should he do? - ✔✔• If the
name or social security number is incorrect, the taxpayer may change it himself and
need not obtain a corrected W-2 before filing his tax return.
• The employer should be notified of the error and asked to update his records.
• Furthermore, the employee's social security number and earnings records should be
verified with the Social Security Administration to ensure that the earnings were properly
credited. (2.17)
✔✔Where can the regular standard deduction amounts be found? - ✔✔• In the left-hand
margin at the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be
claimed as dependents by other taxpayers.
[2010]
✔✔What is the exemption amount for 2009? - ✔✔$3,650 with a reduction for higher-
income taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
✔✔Are early distributions from qualified retirement plans always penalized? - ✔✔No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
✔✔How does a Tax Professional know if a distribution exception applies? - ✔✔• He can
determine that by using thorough interview questions when discussing the distribution
with the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional.
(22.12)
✔✔Is there a time limit for filing amended returns? - ✔✔Yes.
Three years from the date the return was filed or within two years the tax was paid,
whichever is later. (23.3)
✔✔A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return
was examined by the IRS on January 9, 2009 and $280 additional tax was paid that
date. What is the latest date on which an amended return may be filed? - ✔✔January 9,
2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date
the amended return was filed). (23.3)
