IRS SEE Part 3 Question and answers
correctly solved
Under Treasury Circular 230, which of the following actions of a CPA tax
advisor is characteristic of a best practice in rendering tax advice?
A.Requesting written evidence from a client that the fee proposal for tax
advice has been approved by the board of directors.
B.Establishing relevant facts, evaluating the reasonableness of assumptions
and representations, and arriving at a conclusion supported by the law and
facts in a tax memorandum.
C.Requiring the client to supply a written representation, signed under
penalties of perjury, concerning the facts and statements provided to the CPA
for preparing a tax memorandum.
D.Recommending to the client that the advisor's tax advice be made orally
instead of in a written memorandum. - correct answers B.Establishing relevant
facts, evaluating the reasonableness of assumptions and representations, and
arriving at a conclusion supported by the law and facts in a tax memorandum.
Answer B is Correct.
Best practices include (1) establishing the facts, determining which facts are
relevant, evaluating the reasonableness of any assumptions or
representations, relating applicable law (including potentially applicable
judicial doctrines) to the relevant facts, and arriving at a conclusion supported
by the law and the facts; (2) communicating clearly with the client about the
terms of the engagement; (3) advising the client regarding the importance of
the conclusions reached; and (4) acting fairly and with integrity in practice
before the IRS.
A taxpayer is provided a $300 per month mileage allowance for business
travel from their employer. In order for this to be a non-taxable item, which of
the following must be true?
,A.The taxpayer must adequately account for the expenses within 60 days
after they were paid or incurred.
B.The taxpayer must return any excess reimbursement within 180 days after
the expense was paid or incurred.
C.The taxpayer must receive the advance within 60 days of the time the
taxpayer has the expense.
D.The taxpayer must adequately account for the expenses within 120 days
after they were paid or incurred. - correct answers A.The taxpayer must
adequately account for the expenses within 60 days after they were paid or
incurred.
Answer A is Correct.
Taxpayers must keep permanent books of account or records that are
sufficient to support items shown on a return. Taxpayers are required to
substantiate business deductions for travel and entertainment expenses.
Substantiation of amount, time, place, business relationship, and business
purpose is generally required. For an expense to be accounted for within a
reasonable period of time, the taxpayer must account for expenses within 60
days after they were paid or incurred.
Return transcripts are available for all of the following EXCEPT
A.Form 1040.
B.Form 1065.
C.Form 1120-S.
D.Form 1099. - correct answers D.Form 1099.
Answer D is Correct.
,Tax returns can be printed as transcripts to show most of the numbers
reported on the return and those from accompanying schedules or forms. In
many cases, transcripts are used instead of making copies of tax returns.
Transcripts are only available for the following returns: Form 1040 series,
Form 1065, Form 1120, Form 1120-A, Form 1120-H, Form 1120-L, and Form
1120-S. Form 1099 is not available as a return transcript.
An Enrolled Agent's (EA's) client is an individual taxpayer who is requesting
assistance with a proposed penalty. Which of the following is a method of
contesting the penalty?
A.Prior to a penalty's assessment, the EA can request binding arbitration to
reconsider the penalty.
B.After the penalty has been assessed and paid, the EA can file a claim for
refund with the IRS.
C.Prior to a penalty's assessment and before any request for relief has been
denied or a 30-day letter has been issued, the EA can request a conference
with the IRS Independent Office of Appeals.
D.Before the penalty has been assessed, the EA can submit a written request
for penalty abatement. - correct answers B.After the penalty has been
assessed and paid, the EA can file a claim for refund with the IRS.
Answer B is Correct.
Taxpayers have the right to challenge the assertion or assessment of a
penalty and generally may do so at any stage in the penalty process. A
taxpayer may request an abatement and refund after the payment (claim for
refund).
All of the following individuals are eligible to practice (on a limited basis)
before the IRS EXCEPT
A.A regular full-time employee of an individual may represent the employer.
, B.A limited partner in a partnership may represent the partnership.
C.A bona fide officer of a corporation may represent the corporation.
D.A trustee of a trust may represent the trust. - correct answers B.A limited
partner in a partnership may represent the partnership.
Answer B is Correct.
Circular 230 states that attorneys, CPAs, enrolled agents, and other
individuals who qualify under Sec. 10.7 for limited practice may practice
before the IRS. The individuals who qualify are a taxpayer representing
himself or herself; an individual representing a family member; a full-time
employee of a company; a general partner; a bona fide officer of a
corporation, an association, or an organized group that represents the
corporation or association; and a trustee, an administrator, or an executor of a
trust or an estate. A limited partner does not qualify; only general partners and
full-time partnership employees may represent the partnership.
Which of the following is a false statement regarding court cases, revenue
rulings, and revenue procedures?
A.The denial of a writ of certiorari by the U.S. Supreme Court is the equivalent
of a reversal or disagreement.
B.U.S. Supreme Court decisions on federal tax matters are published in
Internal Revenue Bulletins.
C.Announcements concerning the Internal Revenue Service's acquiescence
or nonacquiescence in Tax Court decisions (other than memorandum
decisions) that are adverse to the government's position are published in
Internal Revenue Bulletins.
D.The Internal Revenue Service does not publish decisions by United States
District Courts or the United States Court of Federal Claims. To find these
decisions, one must look to publications issued by commercial printing
houses. - correct answers A.The denial of a writ of certiorari by the U.S.
Supreme Court is the equivalent of a reversal or disagreement.
correctly solved
Under Treasury Circular 230, which of the following actions of a CPA tax
advisor is characteristic of a best practice in rendering tax advice?
A.Requesting written evidence from a client that the fee proposal for tax
advice has been approved by the board of directors.
B.Establishing relevant facts, evaluating the reasonableness of assumptions
and representations, and arriving at a conclusion supported by the law and
facts in a tax memorandum.
C.Requiring the client to supply a written representation, signed under
penalties of perjury, concerning the facts and statements provided to the CPA
for preparing a tax memorandum.
D.Recommending to the client that the advisor's tax advice be made orally
instead of in a written memorandum. - correct answers B.Establishing relevant
facts, evaluating the reasonableness of assumptions and representations, and
arriving at a conclusion supported by the law and facts in a tax memorandum.
Answer B is Correct.
Best practices include (1) establishing the facts, determining which facts are
relevant, evaluating the reasonableness of any assumptions or
representations, relating applicable law (including potentially applicable
judicial doctrines) to the relevant facts, and arriving at a conclusion supported
by the law and the facts; (2) communicating clearly with the client about the
terms of the engagement; (3) advising the client regarding the importance of
the conclusions reached; and (4) acting fairly and with integrity in practice
before the IRS.
A taxpayer is provided a $300 per month mileage allowance for business
travel from their employer. In order for this to be a non-taxable item, which of
the following must be true?
,A.The taxpayer must adequately account for the expenses within 60 days
after they were paid or incurred.
B.The taxpayer must return any excess reimbursement within 180 days after
the expense was paid or incurred.
C.The taxpayer must receive the advance within 60 days of the time the
taxpayer has the expense.
D.The taxpayer must adequately account for the expenses within 120 days
after they were paid or incurred. - correct answers A.The taxpayer must
adequately account for the expenses within 60 days after they were paid or
incurred.
Answer A is Correct.
Taxpayers must keep permanent books of account or records that are
sufficient to support items shown on a return. Taxpayers are required to
substantiate business deductions for travel and entertainment expenses.
Substantiation of amount, time, place, business relationship, and business
purpose is generally required. For an expense to be accounted for within a
reasonable period of time, the taxpayer must account for expenses within 60
days after they were paid or incurred.
Return transcripts are available for all of the following EXCEPT
A.Form 1040.
B.Form 1065.
C.Form 1120-S.
D.Form 1099. - correct answers D.Form 1099.
Answer D is Correct.
,Tax returns can be printed as transcripts to show most of the numbers
reported on the return and those from accompanying schedules or forms. In
many cases, transcripts are used instead of making copies of tax returns.
Transcripts are only available for the following returns: Form 1040 series,
Form 1065, Form 1120, Form 1120-A, Form 1120-H, Form 1120-L, and Form
1120-S. Form 1099 is not available as a return transcript.
An Enrolled Agent's (EA's) client is an individual taxpayer who is requesting
assistance with a proposed penalty. Which of the following is a method of
contesting the penalty?
A.Prior to a penalty's assessment, the EA can request binding arbitration to
reconsider the penalty.
B.After the penalty has been assessed and paid, the EA can file a claim for
refund with the IRS.
C.Prior to a penalty's assessment and before any request for relief has been
denied or a 30-day letter has been issued, the EA can request a conference
with the IRS Independent Office of Appeals.
D.Before the penalty has been assessed, the EA can submit a written request
for penalty abatement. - correct answers B.After the penalty has been
assessed and paid, the EA can file a claim for refund with the IRS.
Answer B is Correct.
Taxpayers have the right to challenge the assertion or assessment of a
penalty and generally may do so at any stage in the penalty process. A
taxpayer may request an abatement and refund after the payment (claim for
refund).
All of the following individuals are eligible to practice (on a limited basis)
before the IRS EXCEPT
A.A regular full-time employee of an individual may represent the employer.
, B.A limited partner in a partnership may represent the partnership.
C.A bona fide officer of a corporation may represent the corporation.
D.A trustee of a trust may represent the trust. - correct answers B.A limited
partner in a partnership may represent the partnership.
Answer B is Correct.
Circular 230 states that attorneys, CPAs, enrolled agents, and other
individuals who qualify under Sec. 10.7 for limited practice may practice
before the IRS. The individuals who qualify are a taxpayer representing
himself or herself; an individual representing a family member; a full-time
employee of a company; a general partner; a bona fide officer of a
corporation, an association, or an organized group that represents the
corporation or association; and a trustee, an administrator, or an executor of a
trust or an estate. A limited partner does not qualify; only general partners and
full-time partnership employees may represent the partnership.
Which of the following is a false statement regarding court cases, revenue
rulings, and revenue procedures?
A.The denial of a writ of certiorari by the U.S. Supreme Court is the equivalent
of a reversal or disagreement.
B.U.S. Supreme Court decisions on federal tax matters are published in
Internal Revenue Bulletins.
C.Announcements concerning the Internal Revenue Service's acquiescence
or nonacquiescence in Tax Court decisions (other than memorandum
decisions) that are adverse to the government's position are published in
Internal Revenue Bulletins.
D.The Internal Revenue Service does not publish decisions by United States
District Courts or the United States Court of Federal Claims. To find these
decisions, one must look to publications issued by commercial printing
houses. - correct answers A.The denial of a writ of certiorari by the U.S.
Supreme Court is the equivalent of a reversal or disagreement.
