Enrolled Agent Part 3 Sample Questions
with Verified Answers
What is the purpose of Form 2848?
a) To file an extension for a tax return
b) To apply for an EIN
✔✔c) To grant power of attorney to represent a taxpayer before the IRS
d) To report estimated tax payments
What does Circular 230 regulate?
a) Taxpayer rights during audits
b) The issuance of refund checks
✔✔c) The practice of tax professionals before the IRS
d) Deadlines for filing tax returns
What is the maximum penalty for failure to furnish a copy of a return to a client?
a) $100 per return
b) $250 per return
✔✔c) $50 per return, with a maximum of $28,000 per year
1
,d) $500 per return
What is the primary function of Form 8821?
a) To apply for tax-exempt status
✔✔b) To authorize a third party to receive information about a taxpayer’s account
c) To dispute IRS penalties
d) To claim deductions for medical expenses
What does the term "disreputable conduct" under Circular 230 include?
a) Filing a tax return late without penalty
✔✔b) Conviction of a criminal offense involving dishonesty
c) Advising clients about tax-saving strategies
d) Charging a client for copying their records
When must a preparer disclose a potential conflict of interest?
a) Only if requested by the IRS
✔✔b) Before continuing representation, and with written consent from all affected parties
c) After completing the client's return
2
,d) Conflicts do not require disclosure
What is the consequence for a preparer who endorses a taxpayer’s refund check?
✔✔a) Monetary penalties and potential suspension from practice
b) Only a warning from the IRS
c) No penalty if the taxpayer consents
d) Automatic revocation of practice rights
What is the purpose of an Enrolled Agent designation?
a) To file state tax returns
b) To provide bookkeeping services
✔✔c) To represent taxpayers before the IRS in all tax matters
d) To verify the accuracy of audit results
What is the statute of limitations for IRS collections?
a) 2 years from the tax filing date
b) 15 years from the notice of assessment
✔✔c) 10 years from the assessment date
3
, d) There is no statute of limitations
What must a tax preparer do if they become aware of an error on a client’s previously filed
return?
a) Ignore it unless the IRS contacts the taxpayer
b) Amend the return themselves without notifying the client
✔✔c) Notify the client and advise them to amend the return
d) Notify the IRS directly without consulting the client
What is the primary purpose of the Office of Professional Responsibility (OPR)?
a) To process tax return amendments
b) To manage IRS audits
✔✔c) To enforce standards for practitioners representing taxpayers
d) To collect unpaid taxes from preparers
What is the penalty for failing to include the preparer tax identification number (PTIN) on a
return?
a) Suspension from tax practice
b) Increased penalties for the taxpayer
4
with Verified Answers
What is the purpose of Form 2848?
a) To file an extension for a tax return
b) To apply for an EIN
✔✔c) To grant power of attorney to represent a taxpayer before the IRS
d) To report estimated tax payments
What does Circular 230 regulate?
a) Taxpayer rights during audits
b) The issuance of refund checks
✔✔c) The practice of tax professionals before the IRS
d) Deadlines for filing tax returns
What is the maximum penalty for failure to furnish a copy of a return to a client?
a) $100 per return
b) $250 per return
✔✔c) $50 per return, with a maximum of $28,000 per year
1
,d) $500 per return
What is the primary function of Form 8821?
a) To apply for tax-exempt status
✔✔b) To authorize a third party to receive information about a taxpayer’s account
c) To dispute IRS penalties
d) To claim deductions for medical expenses
What does the term "disreputable conduct" under Circular 230 include?
a) Filing a tax return late without penalty
✔✔b) Conviction of a criminal offense involving dishonesty
c) Advising clients about tax-saving strategies
d) Charging a client for copying their records
When must a preparer disclose a potential conflict of interest?
a) Only if requested by the IRS
✔✔b) Before continuing representation, and with written consent from all affected parties
c) After completing the client's return
2
,d) Conflicts do not require disclosure
What is the consequence for a preparer who endorses a taxpayer’s refund check?
✔✔a) Monetary penalties and potential suspension from practice
b) Only a warning from the IRS
c) No penalty if the taxpayer consents
d) Automatic revocation of practice rights
What is the purpose of an Enrolled Agent designation?
a) To file state tax returns
b) To provide bookkeeping services
✔✔c) To represent taxpayers before the IRS in all tax matters
d) To verify the accuracy of audit results
What is the statute of limitations for IRS collections?
a) 2 years from the tax filing date
b) 15 years from the notice of assessment
✔✔c) 10 years from the assessment date
3
, d) There is no statute of limitations
What must a tax preparer do if they become aware of an error on a client’s previously filed
return?
a) Ignore it unless the IRS contacts the taxpayer
b) Amend the return themselves without notifying the client
✔✔c) Notify the client and advise them to amend the return
d) Notify the IRS directly without consulting the client
What is the primary purpose of the Office of Professional Responsibility (OPR)?
a) To process tax return amendments
b) To manage IRS audits
✔✔c) To enforce standards for practitioners representing taxpayers
d) To collect unpaid taxes from preparers
What is the penalty for failing to include the preparer tax identification number (PTIN) on a
return?
a) Suspension from tax practice
b) Increased penalties for the taxpayer
4
