REPRESENTATION - PARKINGLOT LIST

Question 1

What to do with a hand-written W-2

Answer 1

The ERO is required to enter the non-standard form code for a handwritten W-2.

Question 2

When can an electronic funds withdrawal be scheduled to pay taxes owed?

Answer 2

An electronic funds withdrawal can be scheduled to occur any time after the return is e-filed and BEFORE the April 15 return due date.

Question 3

If a Preparer doesn’t agree with a proposed penalty they can:

Answer 3

1. Request a conference with the agent to present additional info.
2. Wait for the penalty to be assessed and a notice and demand statement to be issued, then pay the penalty within 30 days and file a claim for refund.
3. Wait for the penalty to be assessed and a notice and demand statement to be issued, then pay at least 15% of the penalty within 30 days and file a claim for refund.

Question 4

A TP must specify WHAT when authorizing a Preparer represent him before the IRS

Answer 4

1. The type of tax matter
2. Number of tax form
3. Years or periods covered by the authorization

Question 5

Period of Renewal for an enrollment cycle?

Answer 5

Nov 1 - Jan 31

Question 6

Docs you should keep for a completed Return

Answer 6

Form 8879, Form 8453, and copies of all Forms W-2.

Question 7

The Director of Practice, with docs showing an enrolled practitioner has violated the law or regulations governing practice before the IRS, may

Answer 7

1. Reprimand such person
2. Institute proceedings for disbarment
3. Institute proceedings for suspension.

Question 8

How many days are allotted to file a written protest letter by a TP when disagreeing with a PROPOSED INDIVIDUAL TAX ASSESSMENT?

Answer 8

30 days

Question 9

The IRS may accept an Offer in Compromise (OIC) to settle unpaid tax accounts for less than the full amount of the balance due. This applies to all:

Answer 9

Taxes, including any interest, penalties, or additional amounts arising under the Internal Revenue Laws.

Question 10

What is true with respect to an Offer in Compromise?

Answer 10

1. The TP may be allowed to pay less than the full amount owed.
2. Collection actions, such as levy, may be delayed.
3. A rejected offer may be appealed.

Question 11

The Federally Authorized Tax Practitioner Privilege under IRC section 7525 protect an Enrolled Practitioner’s advice:

Answer 11

ONLY against disclosure to the IRS, not other government agencies.

Question 12

Which of the following may the IRS settle by accepting an OIC for less than the full amount of the balance due?

Answer 12

Either a doubt as to liability or collectability.

Question 13

An individual who is denied enrollment by the Director of the office of Professional Responsibility has how much time to appeal?

Answer 13

30 days after receipt of the notice of denial.

Question 14

What is the period of limitations.

Answer 14

The period of time during which a TP can amend a filed return to claim a credit or refund.

The period of time during which the IRS can assess additional tax.

Question 15

Installment agreement rules

Answer 15

TPs may request a monthly installment plan if they are unable to pay the full amount owed. A valid request is one the IRS has approved.

However, if the taxpayer owes $10,000 or less and certain other criteria are met, the IRS must accept the request.

Installment agreements generally require equal monthly payments.

It must be paid within the remaining time of the 10-year period during which the IRS can collect tax.

Question 16

When can an unenrolled preparer NOT practice before the IRS?

Answer 16

An unenrolled preparer can NOT practice before the IRS if they did NOT prepare the Tax Return

Question 17

A tax preparer penalty assessed for the preparers willful or reckless conduct with respect to an understatement of liability is:

Answer 17

REDUCED by any penalty paid by that preparer for understatement due to an unreasonable position.

Question 18

Who can NOT practice before the IRS on behalf of a taxpayer?

Answer 18

An Unenrolled Preparer.

Question 19

A tax preparer may use a stamp in lieu of a signature.

True or False?

Answer 19

True.

Question 20

A complaint from the Office of Professional Responsibility for disreputable conduct is NOT required to include the Unit and Employee of the IRS that recommend an action.

True or False.

Answer 20

True.

Question 21

If there is no Substantial Authority for a position taken on a return, but there is Reasonable Basis, what must the preparer do to avoid penalties?

Answer 21

Prepare the return together with a completed disclosure statement or otherwise disclose the position on the return.

Question 22

If a tax preparer prepares a business’s taxes, and his work includes preparing Form 1065 K-1 that was relied upon for an individual’s tax return, and that amount was a substantial portion of the individual income, then the Tax Preparer is considered a preparer for that individual.

True or False?

Answer 22

True.

Question 23

Written consents due to conflicts of interest must be kept for at least 36 months from the date of the conclusion of the representation of the affected clients.

True or False?

Answer 23

True.

Question 24

The ERO should caution taxpayers that some financial institutions do not permit the deposit of joint refunds into individual accounts.

True or False?

Answer 24

True.

Question 25

The IRS may subordinate it’s lien for the convenience of the IRS.

True or False?

Answer 25

True.

NOTE:
The IRS may subordinate it’s lien if the IRS determines that to do so will increase the amount the government realizes and make collection of the tax liability easier.

The TP must apply by filing Form 14134, Application for Certificate of Subordination of Federal Tax Lien, which is found in Publication 784.

Question 26

Form 2848, Power of Attorney, may be used to authorize receipt of a refund check.

True or False?

Answer 26

True.

NOTE:
A TP can authorize a third party with Form 8821 to receive tax information, not checks.

No form issued by or approved by the IRS authorizes anyone other than the taxpayer(s) named on the check to cash a refund check.

Question 27

An EA whose conduct is alleged to be incompetent or disreputable is Entitled to a hearing before an Administrative Law Judge before sanctions can be imposed.

Ture or False?

Answer 27

True.

NOTE:
The Administrative Law Judge and the Office of Professional Responsibility act as the prosecutor.

Question 28

If a practitioner believes in good faith and on reasonable grounds that information requested by the Office of Professional Responsibility about a former partner is privileged or that the request is of doubtful legality, then the practitioner doesn’t have to provide the information.

True or False?

Answer 28

True.

Question 29

A notice of disbarment or suspension of a CPA from practice before the IRS may be issued to:

Answer 29

1. IRS Employees
2. Interested Depts and agencies of the Fed Gov’t
3. State Authorities

Question 30

Paid preparers and taxpayers (or the TP’s duly designated representative) are the ONLY individuals required to sign returns.

True or False?

Answer 30

True.

Question 31

Equal monthly payments, a user fee, and the requirement to comply with current tax obligations are all requirements to set up an installment agreement.

True or False?

Answer 31

True.

Question 32

It is a $50 §6695(e) penalty for each failure to timely or properly file an information return (not to exceed $26,500 per return period).

True or False?

Answer 32

True.

Question 33

You can take your case to the US Tax Court if you disagree with the IRS over what taxes?

Answer 33

Income Tax
Estate Tax
Gift Tax

But NOT Employment Tax.

Question 34

What is the penalty applied to a Taxpayer for a Frivolous Return?

Answer 34

$5,000

Question 35

The IRS must give a taxpayer how many days notice for filing a Notice of Federal Tax Lien.

Answer 35

Within 5 business days from the day the Notice of Federal Tax Lien is filed.

Question 36

Proof of CPE must be kept for a period of four years following the date of removal of enrollment.

True or False?

Answer 36

True.

Question 37

It is a $530 penalty for each failure to comply wit EIC due diligence requirements.

True or False?

Answer 37

True.

Question 38

If an EA is unhappy with the Administrative Law Judges’ decision to sanction him for disreputable conduct, the Director of the OPR will review the appeal and make a final determination.

True or False?

Answer 38

True.