Tax Return PREPARER Responsibilities || QUESTIONS
WITH 100% ACCURATE ANSWERS!!
Who is a tax return PREPARER? correct answers Any person who prepares for
COMPENSATION or EMPLOYS one or more persons to prepare for compensation, any tax
return required under IRC or claim for refund.
Federal tax returns = Needs an IRS Preparer Tax Identification Number (PTIN)
Does NOT include: person who merely furnishes typing or other mechanical assistance
Who has unlimited representation rights? correct answers Tax practitioners = licensed =
attorneys, CPAs, enrolled, registered
Representation rights for tax preparers correct answers - PTIN holders who do NOT hold
professional credentials and do NOT participate in annual filing season program = NO
authority to represent clients before IRS
How to obtain a PTIN? correct answers IRS requires all paid tax return preparers to register
with IRS and obtain PTIN
*All preparers need a PTIN
Who are the signing and nonsigning tax return preparers? correct answers Signing: primary
responsibility for the overall substantive accuracy of the return
Nonsigning: preparer who is not a signing preparer, but prepares all or a substantial portion of
return, offers advice that leads to a substantial portion of return
What are the primary authoritative sources to determine if there is substantial authority for
tax treatment of an item? correct answers - Provisions of IRC and statutory provisions
- Proposed, temporary, and final regulations construing those statutes
- Revenue rules and US Treasury Department
- Court Cases
*IRS Publications (press releases, administrative pronouncements) are NOT primary sources
Reasonable Basis standard correct answers > 20% chance that tax position will be upheld
- NOT satisfied by a return that is "merely arguable"
Substantial Authority standard correct answers > 40% but < 50%
- Objective standard, but less stringent than the more-likely-than-not
More-Likely-Than-Not standard correct answers > 50% chance
Reportable Transaction correct answers Any transaction which information is required to be
included with a return because potential for tax avoidance or evasion by the Secretary of US
Treasury.
WITH 100% ACCURATE ANSWERS!!
Who is a tax return PREPARER? correct answers Any person who prepares for
COMPENSATION or EMPLOYS one or more persons to prepare for compensation, any tax
return required under IRC or claim for refund.
Federal tax returns = Needs an IRS Preparer Tax Identification Number (PTIN)
Does NOT include: person who merely furnishes typing or other mechanical assistance
Who has unlimited representation rights? correct answers Tax practitioners = licensed =
attorneys, CPAs, enrolled, registered
Representation rights for tax preparers correct answers - PTIN holders who do NOT hold
professional credentials and do NOT participate in annual filing season program = NO
authority to represent clients before IRS
How to obtain a PTIN? correct answers IRS requires all paid tax return preparers to register
with IRS and obtain PTIN
*All preparers need a PTIN
Who are the signing and nonsigning tax return preparers? correct answers Signing: primary
responsibility for the overall substantive accuracy of the return
Nonsigning: preparer who is not a signing preparer, but prepares all or a substantial portion of
return, offers advice that leads to a substantial portion of return
What are the primary authoritative sources to determine if there is substantial authority for
tax treatment of an item? correct answers - Provisions of IRC and statutory provisions
- Proposed, temporary, and final regulations construing those statutes
- Revenue rules and US Treasury Department
- Court Cases
*IRS Publications (press releases, administrative pronouncements) are NOT primary sources
Reasonable Basis standard correct answers > 20% chance that tax position will be upheld
- NOT satisfied by a return that is "merely arguable"
Substantial Authority standard correct answers > 40% but < 50%
- Objective standard, but less stringent than the more-likely-than-not
More-Likely-Than-Not standard correct answers > 50% chance
Reportable Transaction correct answers Any transaction which information is required to be
included with a return because potential for tax avoidance or evasion by the Secretary of US
Treasury.
