circular 230

Question 1

230

Answer 1

Choice “B” is correct. Upon discovery of an error in a previously-filed return or the client’s failure to file a
required return, the tax practitioner should promptly notify the client (either orally or in writing) of the
error, noncompliance, or omission and advise the client of the appropriate measures to be taken (e.g.,
advise the client to file the tax return). If the client does not rectify the error, the tax practitioner should
consider withdrawing from the engagement

Question 2

230

Answer 2

Circular 230 prohibits a practitioner’s endorsing the check. So, endorsing the
check and depositing it into the client’s bank account is a violation of Circular 230

Question 3

230

Answer 3

Circular 230 prohibits a practitioner’s endorsing the check. So, holding the check
until the client is billed, then endorsing and depositing the check into the CPA’s account as payment for
the bill is a violation of Circular 230.

Question 4

preparer respos

Answer 4

A preparer is not required to obtain supporting documentation, unless the preparer
has reason to suspect the accuracy of the information provided. However, the preparer must make
reasonable inquiries if the information provided by the taxpayer appears incorrect or incomplete. if not preparer may be assessed a tax preparer penalty

Question 5

written federal tax adcice

Answer 5

A CPA should not give written federal tax advice if the CPA takes into account the
possibility that a tax return will not be audited.

Question 6

client documents

Answer 6

Generally, at the request of the client, the practitioner must return all client
records. An exception is if state law allows the practitioner to retain the records in the case of a fee
dispute, the practitioner may do so. However, the practitioner must (1) return to the client those records
that must be attached to the tax return, and (2) allow the client to review and copy the practitionerretained
client records related to the client’s federal tax obligation

Question 7

IRS contacts CPA

Answer 7

If the CPA does not have possession or control of the records, the CPA must notify
the IRS of the identity of any person who, according to the CPA’s belief, could have the records

Question 8

communication of fees

Answer 8

It may be communicated in a number of ways, including in professional lists,
telephone directories, mailings, and electronic mail.

Question 9

Previous return error

Answer 9

Upon discovery of an error in a previously filed return the tax practitioner should
promptly notify the client (either orally or in writing) of the error, noncompliance, or omission and advise
the client of reasonably likely penalties.