2023 Midterm New Federal Tax Research 12th Ed CHAPTER 1 INTRODUCTION TO TAX PRACTICE AND ETHICS LATEST UPDATED HIHG RATED 100% PASS!!! GUARANTEED

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CHAPTER 1
AN INTRODUCTION TO TAX PRACTICE AND ETHICS


DISCUSSIONEQUESTIONS

1-1.
InEtheEUnitedEStates,EtheEtaxEsystemEisEanEoutgrowthEofEtheEfollowingEfiveEdisciplin
es:Elaw,Eaccounting,Eeconomics,EpoliticalEscience,EandEsociology.ETheEenvironmentEforEth
eEtaxEsystemEisEprovidedEbyEtheEprinciplesEofEeconomics,Esociology,EandEpoliticalEscience,
EwhileEtheElegalEandEaccountingEfieldsEareEresponsibleEforEtheEsystem'sEinterpretationEandE

application.

EachEofEtheseEdisciplinesEaffectsEthisEcountry'sEtaxEsystemEinEaEuniqueEway.EEconomistsEa
ddressEsuchEissuesEasEhowEproposedEtaxElegislationEwillEaffectEtheErateEofEinflationEorEeco
nomicEgrowth.EMeasurementEofEtheEsocialEequityEofEaEtax,EandEdeterminingEwhetherEaEtaxE
systemEdiscriminatesEagainstEcertainEtaxpayers,EareEissuesEthatEareEexaminedEbyEsociologi
stsEandEpoliticalEscientists.EFinally,EattorneysEareEresponsibleEforEtheEinter-
EpretationEofEtheEtaxationEstatutes,EandEaccountantsEensureEthatEtheseEsameEstatutesEareEap

pliedEconsistently.

PageE4

1-2. TheEotherEmajorEcategoriesEofEtaxEpracticeEinEadditionEtoEtaxEresearchEare:

 taxEcompliance
 taxEplanning
 taxElitigation

E PageE5

1-3.
TaxEcomplianceEconsistsEofEgatheringEpertinentEinformation,EevaluatingEandEclas
sifyingEthatEinformation,EandEfilingEanyEnecessaryEtaxEreturns.EComplianceEalsoEinclud
esEotherEfunctionsEnecessaryEtoEsatisfyEgovernmentalErequirements,EsuchEasErepresentin
gEaEclientEduringEanEIRSEaudit.

PageE5

1-4.
MostEofEtheEtaxEcomplianceEworkEisEperformedEbyEcommercialEtaxEpreparers,Eenro
lledEagents,Eattorneys,EandECPAs.ENoncomplexEindividual,Epartnership,EandEcorporateEta
xEreturnsEoftenEareEcompletedEbyEcommercialEtaxEpreparers.ETheEpreparationEofEmoreEco
mplexEreturnsEusuallyEisEperformedEbyEenrolledEagents,Eattorneys,EandECPAs.ETheElatterEg
roupsEalsoEprovideEtaxEplanningEservicesEandErepresentEtheirEclientsEbeforeEtheEIRS.

AnEenrolledEagentEisEoneEwhoEisEadmittedEtoEpracticeEbeforeEtheEIRSEbyEpassingEaEspecialE
IRS-
administeredEexamination,EorEwhoEhasEworkedEforEtheEIRSEforEfiveEyears,EandEisEissuedEaE
permitEtoErepresentEclientsEbeforeEtheEIRS.ECPAsEandEattorneysEareEnotErequiredEtoEtakeEthi
sEexaminationEandEareEautomaticallyEadmittedEtoEpracticeEbeforeEtheEIRSEifEtheyEareEinEgoo
dEstandingEwithEtheEappropriateEprofessionalElicensingEboard.

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PageE5EandECircularE230




1-5.
TaxEplanningEisEtheEprocessEofEarrangingEone'sEfinancialEaffairsEtoEminimizeEanyEta
xEliability.EMuchEofEmodernEtaxEpracticeEcentersEaroundEthisEprocess,EandEtheEresultingEo
utcomeEisEtaxEavoidance.EThereEisEnothingEillegalEorEimmoralEinEtheEavoidanceEofEtaxa-
Etion,EasElongEasEtheEtaxpayerEremainsEwithinElegalEbounds.EInEcontrast,EtaxEevasionEconsti

tutesEtheEillegalEnonpaymentEofEaEtaxEandEcannotEbeEcondoned.EActivitiesEofEthisEsortEclear
lyEviolateEexistingElegalEconstraintsEandEfallEoutsideEofEtheEdomainEofEtheEprofessionalEtaxE
practitioner.

PageE6

1-6.
InEanEopenEtaxEplanningEsituation,EtheEtransactionEisEnotEyetEcomplete,Etherefore,Eth
eEtaxEpractitionerEmaintainsEsomeEdegreeEofEcontrolEoverEtheEpotentialEtaxEliability,EandEth
eEtransactionEmayEbeEmodifiedEtoEachieveEaEmoreEfavorableEtaxEtreatment.EInEaEclosedEtra
nsactionEhowever,EallEofEtheEpertinentEactionsEhaveEbeenEcompleted,EandEtaxEplanningEacti
vitiesEmayEbeElimitedEtoEtheEpresentationEofEtheEsituationEtoEtheEgovernmentEinEtheEmostEle
gallyEadvantageousEmannerEpossible.

PageE6

1-7.
TaxElitigationEisEtheEprocessEofEsettlingEaEdisputeEwithEtheEIRSEinEaEcourtEofElaw.ETy
pically,EaEtaxEattorneyEhandlesEtaxElitigationEthatEprogressesEbeyondEtheEfinalEIRSEappeal.

PageE6

1-8. CPAsEserveEisEaEsupportEcapacityEinEtaxElitigation.

PageE6

1-9.
TaxEresearchEconsistsEofEtheEresolutionEofEunansweredEtaxationEquestions.E
TheEtaxEresearchEprocessEincludesEtheEfollowing:

1. IdentificationEofEpertinentEissues;
2. SpecificationEofEproperEauthorities;
3. EvaluationEofEtheEproprietyEofEauthorities;Eand,
4. ApplicationEofEauthoritiesEtoEaEspecificEsituation.

PageE6

1-10.
CircularE230EisEissuedEbyEtheETreasuryEDepartmentEandEappliesEtoEallEwhoEpractice
beforeEtheEIRS.
E



PageE7

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1-11.
InEadditionEtoECircularE230,ECPAsEmustEfollowEtheEAICPA'sECodeEofEProfessi
onalEConductEandEStatementsEonEStandardsEforETaxEServices.ECPAsEmustEalsoEabideE
byEtheErulesEofEtheEappropriateEstateEboard(s)EofEaccountancy.

PageE7

1-12. AEreturnEpreparerEmustEobtainE18EhoursEofEcontinuingEeducationEfromEanEIRS-
approvedECEEProvider.ETheEhoursEmustEincludeEaE6EcreditEhourEAnnualEFederalETaxER
efresherEcourseE(AFTR)EthatEcoversEfilingEseasonEissuesEandEtaxElawEupdates.ETheEAF
TREcourseEmustEincludeEaEknowledge-
basedEcomprehensionEtestEadministeredEatEtheEconclusionEofEtheEcourseEbyEtheECEEPro
vider.

LimitedEpracticeErightsEallowEindividualsEtoErepresentEclientsEwhoseEreturnsEtheyEprepare
dEandEsigned,EbutEonlyEbeforeErevenueEagents,EcustomerEserviceErepresentatives,EandEsimi
larEIRSEemployees.
PageE10EandEIRS.gov

1-13.
False.EOnlyEcommunicationEwithEtheEIRSEconcerningEaEtaxpayer'sErights,Eprivile
ges,EorEliabilityEisEincluded.EPracticeEbeforeEtheEIRSEdoesEnotEincludeErepresentationEb
eforeEtheETaxECourt.

PageE7

1-14. SectionE10.2EofESubpartEAEofECircularE230EdefinesEpracticeEbeforeEtheEIRSEasEincluding:

mattersEconnectedEwithEpresentationEtoEtheEInternalERevenueEServiceEorEanyEofEits
EofficersEorEemployeesErelatingEtoEaEclient'sErights,Eprivileges,EorEliabilitiesEunderE

lawsEorEregulationsEadministeredEbyEtheEInternalERevenueEService.ESuchEpresenta
tionsEincludeEtheEpreparationEandEfilingEofEnecessaryEdocuments,Ecorrespondence
Ewith,EandEcommunicationsEtoEtheEInternalERevenueEService,EandEtheErepresentati

onEofEaEclientEatEconferences,Ehearings,EandEmeetings.

PageE7

1-15.
ToEbecomeEanEEnrolledEAgentEanEindividualEcanE(1)EpassEaEtestEgivenEbyEtheEIR
SEorE(2)EworkEforEtheEIRSEforEfiveEyears.ECircularE230,ESubpartEA,ESecs.E10.4EtoE10.6.

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1-16.
EnrolledEAgentsEmustEcompleteE72EhoursEofEContinuingEEducationEeveryEthreeEye
arsE(anEaverageEofE24EperEyear,EwithEaEminimumEofE16EhoursEduringEanyEyear.).ECircula
rE230,ESubpartEA.E§10.6.

PageE9

1-17.
True.EAsEaEgeneralErule,EanEindividualEmustEbeEanEenrolledEagent,Eattorney,EorECP
AEtoErepresentEaEclientEbeforeEtheEIRS.EThereEareElimitedEsituationsEwhereEothersEmayErep
resentEaEtaxpayer;Ehowever,EthisEfactEpatternEisEnotEoneEofEthem.ESinceELeighEdidEnotEsig

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nEtheEreturn,EsheEcannotErepresentEtheEtaxpayer,EonlyERoseEcan.