Circular 230
Which fees are a tax preparer NOT allowed to charge a client? - ANSContingent
How long does a preparer have to hold onto a copy of their client's tax return? - ANS3 years
Of the four types of sanctions on can receive from the IRS, which is most severe? -
ANSDisbarment
Circular 230 was implemented after the ending of which war? - ANSCivil War
Explain how you would apply due diligence while researching to see if your client qualifies for
the American Education Credit? - ANSFirst, you must begin with general questions for your
client like who is attending? Major? how long? etc. Then, research the qualifications using
credible databases. Next, document sufficiency relevant primary sources along with client
description and proof that the client meets those qualifications. You want to acquire and
organize as much info as possible to show you are acting in good faith and performing your due
diligence.
When preparing a return which of the following will not lead to a penalty?
a. Ghost preparing
b. No valid PTIN
c. Influencing an IRS employee be coercion
d. None of the above - ANSNone of the above
List 5 things a paid tax preparer should not do - ANS1. willfully not sign a tax return you
prepared
2. mislead an threaten clients
3. attempt to influence an employee of the IRS by bribes, false accusations or threats
4. assist a client to violate federal tax law
5. retain or withhold client records beyond the scope allowed by state law
it is required for a paid tax preparer to have _______ before legally being able to prepare
returns - ANSvalid PTIN
Circular 230 is a regulation issued by what major section of the US government? - ANSTreasury
Dept.
When preparing a client's tax return, they express to you some information that you deem to be
suspicious and incomplete. You have done this client's return for the past 3 years but are
worried that this might be an issue. What do you do as a CPA in this situation? - ANSPractice
due diligence and ask the appropriate questions so that you can complete the return correctly.
Which fees are a tax preparer NOT allowed to charge a client? - ANSContingent
How long does a preparer have to hold onto a copy of their client's tax return? - ANS3 years
Of the four types of sanctions on can receive from the IRS, which is most severe? -
ANSDisbarment
Circular 230 was implemented after the ending of which war? - ANSCivil War
Explain how you would apply due diligence while researching to see if your client qualifies for
the American Education Credit? - ANSFirst, you must begin with general questions for your
client like who is attending? Major? how long? etc. Then, research the qualifications using
credible databases. Next, document sufficiency relevant primary sources along with client
description and proof that the client meets those qualifications. You want to acquire and
organize as much info as possible to show you are acting in good faith and performing your due
diligence.
When preparing a return which of the following will not lead to a penalty?
a. Ghost preparing
b. No valid PTIN
c. Influencing an IRS employee be coercion
d. None of the above - ANSNone of the above
List 5 things a paid tax preparer should not do - ANS1. willfully not sign a tax return you
prepared
2. mislead an threaten clients
3. attempt to influence an employee of the IRS by bribes, false accusations or threats
4. assist a client to violate federal tax law
5. retain or withhold client records beyond the scope allowed by state law
it is required for a paid tax preparer to have _______ before legally being able to prepare
returns - ANSvalid PTIN
Circular 230 is a regulation issued by what major section of the US government? - ANSTreasury
Dept.
When preparing a client's tax return, they express to you some information that you deem to be
suspicious and incomplete. You have done this client's return for the past 3 years but are
worried that this might be an issue. What do you do as a CPA in this situation? - ANSPractice
due diligence and ask the appropriate questions so that you can complete the return correctly.
