PREPARING RETURNS EXAM
QUESTIONS AND ANSWERS
What can you use Form 8275-R to do? - Answer-Disclose items or positions taken
contrary to a regulation.
Tax Return Preparer - Answer-Any person who prepares for compensation, or who
employs one or more persons to prepare for compensation, any return of tax or any
claim for refund of tax.
A person is considered a preparer as long as he prepares a substantial portion of the
return.
A person is not a tax return preparer merely because such person: - Answer-1.
Furnishes typing, reproducing, or other mechanical assistance,
2. Prepares a return for an employer (or office or employee of the employer) by
whom he is regularly or continuously employed,
3. Prepared as a fiduciary a return or claim for refund for any person, or
4. Prepares a claim for refund for a taxpayer in response to any notice of deficiency
or in response to any waiver of restriction after the commencement of an audit.
When handling returns, a tax preparer must: - Answer-1. Sign the return (if paid
preparer) unless not required by instruction or code of law
2. Indicate their identifying number on the return. The rules require all paid tax
preparers (including attorneys, CPAs, and enrolled agents) to apply for a Preparer
Tax Identification Number (PTIN) - even if they already have one - before preparing
any federal tax returns for 2016
3. Provide a copy of the return to taxpayer no later than the time the original return is
presented for signature to the taxpayer.
4. Keep the following records for a period of 3 years after the close of the return
period during which the return or claim for refund was presented for signature to the
taxpayer:
- Retain a completed copy of the return, or
- Retain a record of taxpayer's tax ID, tax year, and name of preparer required to
sign the return.
What is a reasonable position? - Answer-To be reasonable, there must be
substantial authority for the position, or in the case of a disclosed position, a
reasonable basis for the treatment of such item on the return
What are frivolous positions? - Answer-Have no basis for validity in existing law or
which have been determined frivolous by the U.S. Tax Court or other federal court.
QUESTIONS AND ANSWERS
What can you use Form 8275-R to do? - Answer-Disclose items or positions taken
contrary to a regulation.
Tax Return Preparer - Answer-Any person who prepares for compensation, or who
employs one or more persons to prepare for compensation, any return of tax or any
claim for refund of tax.
A person is considered a preparer as long as he prepares a substantial portion of the
return.
A person is not a tax return preparer merely because such person: - Answer-1.
Furnishes typing, reproducing, or other mechanical assistance,
2. Prepares a return for an employer (or office or employee of the employer) by
whom he is regularly or continuously employed,
3. Prepared as a fiduciary a return or claim for refund for any person, or
4. Prepares a claim for refund for a taxpayer in response to any notice of deficiency
or in response to any waiver of restriction after the commencement of an audit.
When handling returns, a tax preparer must: - Answer-1. Sign the return (if paid
preparer) unless not required by instruction or code of law
2. Indicate their identifying number on the return. The rules require all paid tax
preparers (including attorneys, CPAs, and enrolled agents) to apply for a Preparer
Tax Identification Number (PTIN) - even if they already have one - before preparing
any federal tax returns for 2016
3. Provide a copy of the return to taxpayer no later than the time the original return is
presented for signature to the taxpayer.
4. Keep the following records for a period of 3 years after the close of the return
period during which the return or claim for refund was presented for signature to the
taxpayer:
- Retain a completed copy of the return, or
- Retain a record of taxpayer's tax ID, tax year, and name of preparer required to
sign the return.
What is a reasonable position? - Answer-To be reasonable, there must be
substantial authority for the position, or in the case of a disclosed position, a
reasonable basis for the treatment of such item on the return
What are frivolous positions? - Answer-Have no basis for validity in existing law or
which have been determined frivolous by the U.S. Tax Court or other federal court.
