Enrolled Agent SEE Part 3 UPDATED
ACTUAL Questions and CORRECT
Answers
Form 433-A - CORRECT ANSWER - Collection Information Statement for Wage Earners
and Self-Employed Individuals
Form 8863 - CORRECT ANSWER - Education Credits (American Opportunity and
Lifetime Learning Credit)
Form 4868 - CORRECT ANSWER - Application for Automatic Extension of Time To File
U.S. Individual Income Tax Return
Form 8879 - CORRECT ANSWER - IRS e-file Signature Authorization
Fiduciary - CORRECT ANSWER - relating to the governing of property or estate on
behalf of others
Taxpayer Advocate Service - CORRECT ANSWER - a service known as the taxpayer's
voice to the IRS. assists taxpayers by making sure they are treated fairly and understand their
rights
Accuracy-Related Penalty - CORRECT ANSWER - A penalty of 20% of the
underpayment amount imposed on taxpayers who file incorrect tax returns in certain situations,
including : negligence, substantial valuation misstatements, substantial overstatement of pension
liabilities, claim of tax benefit from transaction lacking economic substance
economic substance doctrine - CORRECT ANSWER - doctrine that requires transactions
to meaningfully change a taxpayer's economic position and to have a substantial purpose (apart
from a federal income tax purpose) in order for a taxpayer to obtain tax benefits.
, Form 2848 - CORRECT ANSWER - Power of Attorney and Declaration of Representative
Form 4598 - CORRECT ANSWER - a form issued by the IRS to indicate the taxpayer has
not received w2, 1099, or 1098
form 8082 - CORRECT ANSWER - Notice of Inconsistent Treatment or Administrative
Adjustment Record; used to report situations where an S Corporation shareholder return will be
inconsistent with the corporate return or a partners return will be inconsistent with the
partnership return
form 8867 - CORRECT ANSWER - Paid Preparer's EIC Checklist
injunction - CORRECT ANSWER - An order which legally prevents an individual from
participating in certain acts
Substantial Authority - CORRECT ANSWER - There is substantial authority for the tax
treatment of an item if the treatment is supported by controlling precedent of a US Court of
Appeals to which the taxpayer has a right of appeal with respect to the item.
Substantial understatement - CORRECT ANSWER - General rule: 20% of underpayment
attributable to substantial understatement (portion for which no substantial authority and no
disclosure exists)
tax shelter - CORRECT ANSWER - Any method of reducing taxable income resulting in a
reduction of the payments to tax collecting entities, including state and federal governments.
Accrual Basis Accounting - CORRECT ANSWER - reporting income when it is earned
and expenses when they are incurred
Cash Method of Accounting - CORRECT ANSWER - An overall method of accounting
under which revenue is accounted for when payment is received and expenses are accounted for
when payment is made.
ACTUAL Questions and CORRECT
Answers
Form 433-A - CORRECT ANSWER - Collection Information Statement for Wage Earners
and Self-Employed Individuals
Form 8863 - CORRECT ANSWER - Education Credits (American Opportunity and
Lifetime Learning Credit)
Form 4868 - CORRECT ANSWER - Application for Automatic Extension of Time To File
U.S. Individual Income Tax Return
Form 8879 - CORRECT ANSWER - IRS e-file Signature Authorization
Fiduciary - CORRECT ANSWER - relating to the governing of property or estate on
behalf of others
Taxpayer Advocate Service - CORRECT ANSWER - a service known as the taxpayer's
voice to the IRS. assists taxpayers by making sure they are treated fairly and understand their
rights
Accuracy-Related Penalty - CORRECT ANSWER - A penalty of 20% of the
underpayment amount imposed on taxpayers who file incorrect tax returns in certain situations,
including : negligence, substantial valuation misstatements, substantial overstatement of pension
liabilities, claim of tax benefit from transaction lacking economic substance
economic substance doctrine - CORRECT ANSWER - doctrine that requires transactions
to meaningfully change a taxpayer's economic position and to have a substantial purpose (apart
from a federal income tax purpose) in order for a taxpayer to obtain tax benefits.
, Form 2848 - CORRECT ANSWER - Power of Attorney and Declaration of Representative
Form 4598 - CORRECT ANSWER - a form issued by the IRS to indicate the taxpayer has
not received w2, 1099, or 1098
form 8082 - CORRECT ANSWER - Notice of Inconsistent Treatment or Administrative
Adjustment Record; used to report situations where an S Corporation shareholder return will be
inconsistent with the corporate return or a partners return will be inconsistent with the
partnership return
form 8867 - CORRECT ANSWER - Paid Preparer's EIC Checklist
injunction - CORRECT ANSWER - An order which legally prevents an individual from
participating in certain acts
Substantial Authority - CORRECT ANSWER - There is substantial authority for the tax
treatment of an item if the treatment is supported by controlling precedent of a US Court of
Appeals to which the taxpayer has a right of appeal with respect to the item.
Substantial understatement - CORRECT ANSWER - General rule: 20% of underpayment
attributable to substantial understatement (portion for which no substantial authority and no
disclosure exists)
tax shelter - CORRECT ANSWER - Any method of reducing taxable income resulting in a
reduction of the payments to tax collecting entities, including state and federal governments.
Accrual Basis Accounting - CORRECT ANSWER - reporting income when it is earned
and expenses when they are incurred
Cash Method of Accounting - CORRECT ANSWER - An overall method of accounting
under which revenue is accounted for when payment is received and expenses are accounted for
when payment is made.
