EASY
When does a durable power of attorney expire?
A. When the taxpayer is deemed incompetent.
B. Upon death or incapacitation of the individual.
C. Upon death of the individual.
D. A durable power of attorney never expires.
C. Upon death of the individual.
Glenda is an enrolled agent, and Gustavo is her client. Gustavo wants Glenda to represent him during his IRS audit. Glenda prepares a Form 2848, Power of Attorney. Which of the following is NOT required in order for the Form 2848 to be valid?
A. Gustavo's Social Security Number must be listed on the form.
B. Gustavo must sign as the taxpayer.
C. Gustavo's Telephone Number must be listed on the form.
D. Glenda must sign the 2848 as the EA
C. Gustavo's Telephone Number must be listed on the form.
When does Form 8821, Tax Information Authorization, expire?
A. Only upon the taxpayer’s death.
B. Upon the taxpayer’s revocation or the appointee’s withdrawal.
C. One year from the due date of the taxpayer’s current tax return, including any extension date.
D. One year from the due date of the taxpayer’s current tax return, regardless of any extension date.
B. Upon the taxpayer’s revocation or the appointee’s withdrawal.
With the taxpayer’s properly signed power of attorney, an enrolled agent can:
A. Receive a taxpayer’s refund check and deposit it in order to split the fees.
B. Receive a taxpayer’s refund check, but not endorse or cash the check.
C. Receive a taxpayer’s refund check and endorse it in order to pay tax preparation fees only.
D. Receive and endorse a taxpayer’s refund check and invest the proceeds in the taxpayer’s own mutual fund.
B. Receive a taxpayer’s refund check, but not endorse or cash the check.
Form 2848 will be rejected in all of the following instances except:
A. When the representative fails to sign and date the declaration of representative.
B. When the taxpayer fails to sign and date the form.
C. When the tax period states “all years” or makes other general references.
D. When a CAF number is not included.
D. When a CAF number is not included.
The IRS has a centralized computer database system called the CAF system. What information does the CAF system contain?
A. Previously transmitted returns.
B. Taxpayer birth and death records.
C. The authority of taxpayer representatives.
D. A record of tax credits that each taxpayer has claimed for the last 10 years.
C. The authority of taxpayer representatives.
The IRS will reject a Form 2848 in all of the following instances except:
A. The tax periods covered by the form are missing.
B. The form is missing the taxpayer's signature.
C. The designation of the authorized representative is missing.
D. The representative is an unenrolled practitioner without a CAF number.
D. The representative is an unenrolled practitioner without a CAF number.
Why would a taxpayer sign Form 8821?
A. To designate any third party to receive confidential tax information, including tax transcripts and wage information.
B. To grant power of attorney for a third party to represent him in proceedings before the IRS.
C. To file for an automatic six-month extension of time to file a tax return.
D. To request a tax return transcript.
A. To designate any third party to receive confidential tax information, including tax transcripts and wage information.
Amelie and Danny are married and have always filed jointly. This year, they receive an audit notice that their prior year return is being examined by the IRS. Amelie hires Carole, an enrolled agent, to represent her in the examination of her joint return. Danny does not want to hire anybody and decides to ignore the audit notice and not respond to the IRS at all. Danny also refuses to speak to Carole. Is Carole still allowed to represent Amelie before the IRS, even though it is a joint return?
A. Yes, Carole can represent Amelie by herself, as long as Amelie signs Form 2848 to designate Carole as her representative.
B. Carole cannot represent Amelie by herself, and must obtain a signed power of attorney from Danny, as well, before she can represent the married couple.
C. Carole cannot represent Amelie, because this is a clear conflict of interest.
D. Carole can represent Amelie by herself, as long as Amelie signs Form 8821 to designate Carole as her representative.
A. Yes, Carole can represent Amelie by herself, as long as Amelie signs Form 2848 to designate Carole as her representative.
Courtney is a licensed CPA. She provided written tax advice to a corporation on a federal tax matter. The Securities and Exchange Commission is reviewing a required filing of the corporation and requests a copy of Courtney’s tax advice. What is the correct statement regarding this situation?
A. The confidentiality privilege under §7525 applies only to tax attorneys and not to other federally-authorized practitioners.
B. She can assert her practitioner confidentiality privilege under §7525.
C. She cannot assert her practitioner confidentiality privilege because it does not apply to tax advice.
D. The practitioner confidentiality privilege does not apply to governmental agencies other than the IRS.
D. The practitioner confidentiality privilege does not apply to governmental agencies other than the IRS.
Where is a third-party designee authorization recorded?
A. The taxpayer must record the third-party designee authorization in his own account.
B. In the CAF system.
C. Directly in the taxpayer’s account with the IRS.
D. This authorization is not recorded by the IRS; it is recorded by the practitioner.
C. Directly in the taxpayer’s account with the IRS.
Ahmed is an enrolled agent who just got his first representation engagement. When he signs the "declaration of representative" on an IRS power of attorney (Form 2848), what is Ahmed attesting to?
A. Ahmed is attesting that he will not charge contingent fees.
B. Ahmed is attesting that he is not currently under suspension or disbarment from practice before the Internal Revenue Service.
C. Ahmed is attesting that he will provide diligent representation to the taxpayer.
D. Ahmed is attesting that he is competent and ethical.
B. Ahmed is attesting that he is not currently under suspension or disbarment from practice before the Internal Revenue Service.
What is the purpose of a CAF number?
A. A CAF number is a unique nine-digit identification number that is assigned to preparers who work for VITA and other volunteer-only organizations.
B. A CAF number is a substitute for a PTIN for foreign preparers who are not eligible for a PTIN.
C. A CAF number is a unique nine-digit identification number that the IRS assigns to tax preparers the first time they file a third party authorization with the IRS.
D. A CAF number is a nine-digit identification number that the IRS assigns to disbarred and suspended preparers.
C. A CAF number is a unique nine-digit identification number that the IRS assigns to tax preparers the first time they file a third party authorization with the IRS.
Adam is an enrolled agent. He fires his client, Nancy, for nonpayment of past invoices. Adam had been representing Nancy in an IRS audit. What action should Adam take in order to permanently withdraw as Nancy's representative?
A. Adam should formally withdraw from the engagement by submitting a formal letter to the CAF unit.
B. Adam should formally withdraw from the engagement and write “WITHDRAW” across the top of Form 2848 and send it to the IRS via mail or fax.
C. Adam should formally withdraw from the engagement and write “REVOKED” across the top of Form 2848 and send it to the IRS via mail or fax.
D. Adam should formally withdraw from the engagement by directly contacting the IRS examiner assigned to Nancy's audit.
B. Adam should formally withdraw from the engagement and write “WITHDRAW” across the top of Form 2848 and send it to the IRS via mail or fax.
Dodie is a taxpayer who wants to revoke an IRS power of attorney that she had previously executed, because she wants to find a new accountant. What should Dodie do?
A. She must send a letter to her nearest IRS center, stating that she wants to revoke the current POA that is on file.
B. She must send a copy of the previously executed POA to the IRS (with an original signature) and write “REVOKE” across the top of the POA.
C. She must send a new POA to the IRS office where the prior POA was originally filed and name herself as the representative.
D. She must call the IRS toll-free number, verify her identity, and state that she wants to revoke the current POA that is on file.
B. She must send a copy of the previously executed POA to the IRS (with an original signature) and write “REVOKE” across the top of the POA.
When does the authorization for a third-party designee expire?
A. Three months after the return is filed.
B. Three years after the return is filed.
C. One year after the return is filed.
D. On the due date of the next tax return.
D. On the due date of the next tax return.
Darrel is an enrolled agent. He fired his client, Madalyn, for the non-payment of her bill. He wants to withdraw from representation, but he has a power of attorney in effect with the IRS. How can Darrel withdraw from the representation of Madalyn?
A. Darrel can call the IRS directly and revoke the power of attorney over the phone.
B. Darrel must write the word “REVOKE” on the POA form and mail or fax it to the IRS.
C. A POA automatically expires after one year from the date of signing, so Darrel does not need to take any special action to withdraw.
D. Darrel must write the word “WITHDRAW” on the POA form and mail or fax it to the IRS.
D. Darrel must write the word “WITHDRAW” on the POA form and mail or fax it to the IRS.
The "checkbox authority" lasts:
A. For three years from the due date of the return.
B. For one year from the due date of the return not including extensions.
C. For one year from the due date of the return, including extensions.
D. For three years after the return is filed, according to the postmark date.
B. For one year from the due date of the return not including extensions.
Martina has a significant tax debt. Her tax preparer, Ricardo, is not an enrolled agent or CPA, but he does have his AFSP certificate. Can Ricardo file a Form 8821 in order to represent Martina during the OIC application process?
A. Yes, with an AFSP Certificate and a Form 8821, Ricardo can represent Martina before the IRS.
B. Ricardo can only represent Martina if he files her tax returns.
C. Ricardo can only represent Martina if she authorizes him with a Durable Power of Attorney.
D. No, Ricardo cannot represent Martina using a Form 8821.
D. No, Ricardo cannot represent Martina using a Form 8821.
Devon is a tax preparer. During the year, he gets an offer from an investment services firm. The firm wants Devon to share his client list so the investment firm can market investments to his clients. Devon agrees, and emails a spreadsheet to the investment firm with all his client's names, addresses and other personal biometric information. Devon did not ask his clients' permission before sharing this information with the investment firm. What penalty may be assessed against Devon?
A. 6695(g) Penalty, for failure to be diligent in determining eligibility for certain tax benefits
B. 7216 Penalty, for disclosure or use of information by the preparer of the return without the taxpayer’s consent.
C. 7201 Penalty, for tax evasion
D. 6700 Penalty, for promoting abusive tax shelters
B. 7216 Penalty, for disclosure or use of information by the preparer of the return without the taxpayer’s consent.
Vikram is an enrolled agent that does representation work for his clients. When Vikram signs Form 2848 on behalf of a client, he declares under penalties of perjury that:
A. He is subject to the regulations in Circular 230.
B. He is familiar with federal income tax regulations.
C. He is aware of recent tax law developments that relate to the tax matter(s) listed on line 3 of Form 2848.
D. All of the above.
A. He is subject to the regulations in Circular 230.
What is a durable power of attorney?
A. A type of power of attorney that is terminated only when an individual dies or becomes incapacitated or incompetent.
B. A type of power of attorney that is not subject to a time limit and is terminated only upon death.
C. A type of power of attorney that transfers from a deceased spouse to a surviving spouse upon death.
D. A type of power of attorney that is terminated only when an individual becomes incapacitated or incompetent.
B. A type of power of attorney that is not subject to a time limit and is terminated only upon death.
Kaba is an enrolled agent who represents multiple clients during the year. In which of the following situations is a power of attorney NOT required?
A. When Kaba responds to an IRS notice on behalf of a partnership.
B. When Kaba agrees to receive a refund check on behalf of a client that lives and works overseas.
C. When Kaba prepares a client's federal income tax return for compensation.
D. When Kaba represents an individual client during the examination of an original return.
C. When Kaba prepares a client's federal income tax return for compensation.
Farrel is a tax preparer with a new client named Kira. Kira lost all her W-2 forms and 1099 forms when she moved, and Farrel cannot prepare her returns without that information. Kira wants to request her own transcripts from the IRS. What transcript type should she request?
A. She should request account transcripts.
B. She should request wage and income transcripts.
C. She should request payment transcripts.
D. She should request tax return transcripts.
B. She should request wage and income transcripts.
There are stringent privacy regulations governing the disclosure of private taxpayer information to a third party. These privacy regulations apply to:
A. All federally-authorized practitioners (i.e. CPAs, enrolled agents, and tax attorneys).
B. All paid and volunteer tax preparers.
C. All paid preparers, electronic return originators, and IRS employees.
D. All paid preparers, electronic return originators, tax software developers, other persons engaged in tax preparation, and unpaid volunteers for VITA and TCE.
D. All paid preparers, electronic return originators, tax software developers, other persons engaged in tax preparation, and unpaid volunteers for VITA and TCE.