TAX PRACTICES AND PROCEDURES –
26 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
1.2 Rules for refund check negotiation
Negotiation of taxpayer refund checks: - Answer-Individuals subject to Circular 230
may not endorse or otherwise negotiate any check (including directing or accepting
payment by any means, electronic or otherwise, into an account owned or controlled
by the practitioner or any firm or other entity with whom the practitioner is
associated) issued to a client by the government in respect of a Federal tax liability.
1.2 Standards for written advice, covered opinions, tax return positions and
preparing returns
Tax Returns Cir230 § 10.34 - Answer-a) Tax returns. (1) A practitioner may not
willfully, recklessly, or through gross incompetence — (i) Sign a tax return or claim
for refund that the practitioner knows or reasonably should know contains a position
that — (A) Lacks a reasonable basis; (B) Is an unreasonable position as described in
section 6694(a)(2) of the Internal Revenue Code (Code) (including the related
regulations and other published guidance); or
(C) Is a willful attempt by the practitioner to understate the liability for tax or a
reckless or intentional disregard of rules or regulations by the practitioner as
described in section 6694(b)(2) of the Code (including the related regulations and
other published guidance). (ii) Advise a client to take a position on a tax return or
claim for refund, or prepare a portion of a tax return or claim for refund containing a
position, that — (A) Lacks a reasonable basis; (B) Is an unreasonable position as
described in section 6694(a)(2) of the Code (including the related regulations and
other published guidance); or (C) Is a willful attempt by the practitioner to understate
the liability for tax or a reckless or intentional disregard of rules or regulations by the
practitioner as described in section 6694(b)(2) of the Code (including the related
regulations and other published guidance). (2) A pattern of conduct is a factor that
will be taken into account in determining whether a practitioner acted willfully,
recklessly, or through gross incompetence
1.2 Continuing education requirements - Answer-72 hours every three years (16
hours a year, 2 of which are ethics)
Must be from an approved continuing education provider
1.2 Enrollment cycle and renewal - Answer-§ 10.6 Term and renewal of status as an
enrolled agent, enrolled retirement plan agent, or registered tax return preparer. (a)
Term. Each individual authorized to practice before the Internal Revenue Service as
an enrolled agent, enrolled retirement plan agent, or registered tax return preparer
will be accorded active enrollment or registration status subject to renewal of
enrollment or registration as provided in this part. (b) Enrollment or registration card
or certificate. The Internal Revenue Service will issue an enrollment or registration
card or certificate to each individual whose application to practice before the Internal
, Revenue Service is approved. Each card or certificate will be valid for the period
stated on the card or certificate. An enrolled agent, enrolled retirement plan agent, or
registered tax return preparer may not practice before the Internal Revenue Service
if the card or certificate is not current or otherwise Treasury Department Circular No.
230 valid. The card or certificate is in addition to any notification that may be
provided to each individual who obtains a preparer tax identification number. (c)
Change of address. An enrolled agent, enrolled retirement plan agent, or registered
tax return preparer must send notification of any change of address to the address
specified by the Internal Revenue Service within 60 days of the change of address.
This notification must include the enrolled agent's, enrolled retirement plan agent's,
or registered tax return preparer's name, prior address, new address, tax
identification number(s) (including preparer tax identification number), and the date
the change of address is effective. Unless this notification is sent, the address for
purposes of any correspondence from the appropriate Internal Revenue Service
office responsible for administering this
1.2 Rules for prompt disposition of matters before the IRS
Cir230 § 10.23 - Answer-Prompt disposition of pending matters.
A practitioner may not unreasonably delay the prompt disposition of any matter
before the Internal Revenue Service
1.2 Rules for returning a client's records and documents
Cir230 § 10.28 - Answer-Return of client's records. (a) In general, a practitioner
must, at the request of a client, promptly return any and all records of the client that
are necessary for the client to comply with his or her Federal tax obligations. The
practitioner may retain copies of the records returned to a client. The existence of a
dispute over fees generally does not relieve the practitioner of his or her
responsibility under this section. Nevertheless, if applicable state law allows or
permits the retention of a client's records by a practitioner in the case of a dispute
over fees for services rendered, the practitioner need only return those records that
must be attached to the taxpayer's return. The practitioner, however, must provide
the client with reasonable access to review and copy any additional records of the
client retained by the practitioner under state law that are necessary for the client to
comply with his or her Federal tax obligations. (b) For purposes of this section —
Records of the client include all documents or written or electronic Page 22 — §
10.27 materials provided to the practitioner, or obtained by the practitioner in the
course of the practitioner's representation of the client, that preexisted the retention
of the practitioner by the client. The term also includes materials that were prepared
by the client or a third party (not including an employee or agent of the practitioner)
at any time and provided to the practitioner with respect to the subject matter of the
representation. The term also includes any return, claim for refund, schedule,
affidavit, appraisal or any other document prepared by the practitioner, or his or her
employee or agent, that was presented to the client with respect to a prior
representation if such document is necessary for the taxpayer to comply with his or
her current Federa
1.2 PTIN requirements - Answer--Personal information (name, mailing address)
-Business information (name, mailing address)
26 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
1.2 Rules for refund check negotiation
Negotiation of taxpayer refund checks: - Answer-Individuals subject to Circular 230
may not endorse or otherwise negotiate any check (including directing or accepting
payment by any means, electronic or otherwise, into an account owned or controlled
by the practitioner or any firm or other entity with whom the practitioner is
associated) issued to a client by the government in respect of a Federal tax liability.
1.2 Standards for written advice, covered opinions, tax return positions and
preparing returns
Tax Returns Cir230 § 10.34 - Answer-a) Tax returns. (1) A practitioner may not
willfully, recklessly, or through gross incompetence — (i) Sign a tax return or claim
for refund that the practitioner knows or reasonably should know contains a position
that — (A) Lacks a reasonable basis; (B) Is an unreasonable position as described in
section 6694(a)(2) of the Internal Revenue Code (Code) (including the related
regulations and other published guidance); or
(C) Is a willful attempt by the practitioner to understate the liability for tax or a
reckless or intentional disregard of rules or regulations by the practitioner as
described in section 6694(b)(2) of the Code (including the related regulations and
other published guidance). (ii) Advise a client to take a position on a tax return or
claim for refund, or prepare a portion of a tax return or claim for refund containing a
position, that — (A) Lacks a reasonable basis; (B) Is an unreasonable position as
described in section 6694(a)(2) of the Code (including the related regulations and
other published guidance); or (C) Is a willful attempt by the practitioner to understate
the liability for tax or a reckless or intentional disregard of rules or regulations by the
practitioner as described in section 6694(b)(2) of the Code (including the related
regulations and other published guidance). (2) A pattern of conduct is a factor that
will be taken into account in determining whether a practitioner acted willfully,
recklessly, or through gross incompetence
1.2 Continuing education requirements - Answer-72 hours every three years (16
hours a year, 2 of which are ethics)
Must be from an approved continuing education provider
1.2 Enrollment cycle and renewal - Answer-§ 10.6 Term and renewal of status as an
enrolled agent, enrolled retirement plan agent, or registered tax return preparer. (a)
Term. Each individual authorized to practice before the Internal Revenue Service as
an enrolled agent, enrolled retirement plan agent, or registered tax return preparer
will be accorded active enrollment or registration status subject to renewal of
enrollment or registration as provided in this part. (b) Enrollment or registration card
or certificate. The Internal Revenue Service will issue an enrollment or registration
card or certificate to each individual whose application to practice before the Internal
, Revenue Service is approved. Each card or certificate will be valid for the period
stated on the card or certificate. An enrolled agent, enrolled retirement plan agent, or
registered tax return preparer may not practice before the Internal Revenue Service
if the card or certificate is not current or otherwise Treasury Department Circular No.
230 valid. The card or certificate is in addition to any notification that may be
provided to each individual who obtains a preparer tax identification number. (c)
Change of address. An enrolled agent, enrolled retirement plan agent, or registered
tax return preparer must send notification of any change of address to the address
specified by the Internal Revenue Service within 60 days of the change of address.
This notification must include the enrolled agent's, enrolled retirement plan agent's,
or registered tax return preparer's name, prior address, new address, tax
identification number(s) (including preparer tax identification number), and the date
the change of address is effective. Unless this notification is sent, the address for
purposes of any correspondence from the appropriate Internal Revenue Service
office responsible for administering this
1.2 Rules for prompt disposition of matters before the IRS
Cir230 § 10.23 - Answer-Prompt disposition of pending matters.
A practitioner may not unreasonably delay the prompt disposition of any matter
before the Internal Revenue Service
1.2 Rules for returning a client's records and documents
Cir230 § 10.28 - Answer-Return of client's records. (a) In general, a practitioner
must, at the request of a client, promptly return any and all records of the client that
are necessary for the client to comply with his or her Federal tax obligations. The
practitioner may retain copies of the records returned to a client. The existence of a
dispute over fees generally does not relieve the practitioner of his or her
responsibility under this section. Nevertheless, if applicable state law allows or
permits the retention of a client's records by a practitioner in the case of a dispute
over fees for services rendered, the practitioner need only return those records that
must be attached to the taxpayer's return. The practitioner, however, must provide
the client with reasonable access to review and copy any additional records of the
client retained by the practitioner under state law that are necessary for the client to
comply with his or her Federal tax obligations. (b) For purposes of this section —
Records of the client include all documents or written or electronic Page 22 — §
10.27 materials provided to the practitioner, or obtained by the practitioner in the
course of the practitioner's representation of the client, that preexisted the retention
of the practitioner by the client. The term also includes materials that were prepared
by the client or a third party (not including an employee or agent of the practitioner)
at any time and provided to the practitioner with respect to the subject matter of the
representation. The term also includes any return, claim for refund, schedule,
affidavit, appraisal or any other document prepared by the practitioner, or his or her
employee or agent, that was presented to the client with respect to a prior
representation if such document is necessary for the taxpayer to comply with his or
her current Federa
1.2 PTIN requirements - Answer--Personal information (name, mailing address)
-Business information (name, mailing address)
