Question

Answer the following five multiple choice:

1) Under Circular 230, a practitioner must exercise due diligence in preparing tax returns, which would include all of the following except:

a. Rely on the work of others.

b. Not relying on the work of others.

c. Due diligence presumed as long as the preparer used care in engaging, supervising, training and evaluating the person.

d. The correctness of written and oral representations to the IRS and to the client.

2) Suzanne is a new tax preparer, and she has just finished training through a 10-week Tax Preparing course. What is the minimum criteria that must be met in order for Suzanne to be able to prepare a return for a Liberty office? Choose one answer.

a. She must acquire her PTIN and be at least White Star certified in the Tax Preparer Certification system

b. She must acquire her PTIN, meet all applicable state registration requirements, and pass any applicable state tests

c. She must acquire her PTIN and pass any applicable state tests

d. She must acquire her PTIN, meet all applicable state registration requirements, pass any applicable state tests, and be at least White Star certified in the Tax Preparer Certification system

3) As a preparer of income tax returns, you leave your clients’ files on the top of your desk face up so you can only see their name, even when other clients are getting their returns prepared in case you have time to work on them. This is okay because: Choose one answer.

a. Only their names are on display and not any SSNs or other information

b. It is your desk and the other clients should not be looking at the other papers on it

c. You haven’t had time to set up their folder yet and file their file but plan to do it before you go home.

d. None of the above

4) What are potential IRS sanctions for providing false statements to or misleading the IRS?

a. Suspension

b. Censure

c. Public Reprimand

d. All of the above

5) A practitioner may not perform any official act as a notary public with respect to any matter administrated by IRS in which they are in any way interested. In which of the following situations would a practitioner be allowed to notarize a tax payers documents.

a. Notarizes documents that are true copies to be attached to W-7 application for an ITIN

b. Notarizing a financial power of attorney for a client to be able to access a parent’s bank account while taxpayer’s parent is living in an assisted living facility.

c. Notarizing a statement made by client that is submitted to IRS as part of a request for information

d. None of the above

Answer 1