Question 1

The Statements on Standards for Tax Services (SSTS)are issued by:

Accepted Answer

A) the Internal Revenue Service 
B) the FASB 
C) the AICPA 
D) the American Bar Association 
E) the AICPA and the American Bar Association jointly 
A) the Internal Revenue Service 
B) the FASB 
C) the AICPA 
D) the American Bar Association 
E) the AICPA and the American Bar Association jointly

Question 2

Tax practitioners (as defined by the IRS)are regulated by Circular 230.

Accepted Answer

A) True 
 B)False

Question 3

If a CPA becomes aware of an error in a tax return, he or she must immediately notify the IRS.

Accepted Answer

A) True 
 B)False

Question 4

Explain which types of services a CPA can and cannot provide toavoid engaging in the unauthorized practice of law.

Accepted Answer

Frequently, legal and accounting questio

Question 5

An attorney, CPA, or enrolled agent may use advertising toobtain clients under Circular 230.

Accepted Answer

A) True 
 B)False

Question 6

Tobecome an enrolled agent, a person must either pass a special IRS examination or must work for the IRS for at least five years.

Accepted Answer

A) True 
 B)False

Question 7

Drafting wills is a part of a CPA's professional duties.

Accepted Answer

A) True 
 B)False

Question 8

Regarding open transactions, which of the following statements is INCORRECT?

Accepted Answer

A) The transaction is not yet completed. 
B) The practitioner can suggest changes toachieve a better tax result. 
C) A tax practitioner has some degree of control over the client's tax liability. 
D) The practitioner can fix the problem by amending the client's tax return. 
A) The transaction is not yet completed. 
B) The practitioner can suggest changes toachieve a better tax result. 
C) A tax practitioner has some degree of control over the client's tax liability. 
D) The practitioner can fix the problem by amending the client's tax return.

Question 9

Explain the standards for professional services that involve tax return positions under SSTS No.1. What is the level of authority for disclosed or undisclosed positions and what types of authority can be relied upon?

Accepted Answer

Under SSTS No. 1, a member should determ

Question 10

Tax practice can be defined as the application of the tax laws tospecific accounting situations.

Accepted Answer

A) True 
 B)False

Question 11

In a closed transaction, the scope of tax planning is:

Accepted Answer

A) more limited as compared toan open transaction 
B) limited by the IRS rules of practice 
C) limited topresenting the taxpayer's facts tothe government in the most favorable, legal manner 
D) more limited as compared toan open transaction and limited topresenting the taxpayer's facts tothe government in the most favorable, legal manner 
A) more limited as compared toan open transaction 
B) limited by the IRS rules of practice 
C) limited topresenting the taxpayer's facts tothe government in the most favorable, legal manner 
D) more limited as compared toan open transaction and limited topresenting the taxpayer's facts tothe government in the most favorable, legal manner

Question 12

A member of the AICPA is not allowed toprepare tax returns that involve the use of the taxpayer's estimates.

Accepted Answer

A) True 
 B)False

Question 13

Tax avoidance and tax evasion are both illegal.

Accepted Answer

A) True 
 B)False

Question 14

Due diligence, in essence, means a tax practitioner:

Accepted Answer

A) must be efficient in performing his duties 
B) must give due respect toIRS officials 
C) should use reasonable effort tocomply with the tax laws 
D) should charge reasonable fees for work performed for a client 
A) must be efficient in performing his duties 
B) must give due respect toIRS officials 
C) should use reasonable effort tocomply with the tax laws 
D) should charge reasonable fees for work performed for a client

Question 15

Whocan represent a taxpayer before the IRS Appeals Office under Circular 230?

Accepted Answer

A) a CPA 
B) an officer of a corporation may represent the corporation 
C) an attorney 
D) all of these are correct 
E) both a CPA and an attorney 
A) a CPA 
B) an officer of a corporation may represent the corporation 
C) an attorney 
D) all of these are correct 
E) both a CPA and an attorney

Question 16

Explain the AICPA guidelines under SSTS No. 3 for relying without verification on taxpayer or third-party information when preparing a tax return.

Accepted Answer

In preparing or signing a return, an AIC

Question 17

Which of the following is CORRECT about a CPA's responsibility with regard totax return positions under Statements on Standards for Tax Services No. 1 (SSTS No. 1)?

Accepted Answer

A) A CPA may not base his or her position on authority that is not approved by the IRS under Section 6662 (accuracy-related penalty). 
B) A CPA may sign a return which has a tax position that has a realistic possibility of being sustained on the merits. 
C) A CPA may not sign a return which has any tax position that is not fully disclosed. 
D) All of these are correct. 
A) A CPA may not base his or her position on authority that is not approved by the IRS under Section 6662 (accuracy-related penalty). 
B) A CPA may sign a return which has a tax position that has a realistic possibility of being sustained on the merits. 
C) A CPA may not sign a return which has any tax position that is not fully disclosed. 
D) All of these are correct.

Question 18

Explain the concept of "limited practice without enrollment" under Circular 230 and list several of the special situations in which the IRS allows this type of representation.

Accepted Answer

Under Section 10.7 of Circular 230, cert

Question 19

The Lowell Bar Association v. Loeb case addressed the issue of:

Accepted Answer

A) unauthorized practice of law by nonattorneys engaged in tax practice 
B) legal research by taxpayers 
C) attorneys and CPAs working together in a practice 
D) all of these are correct 
A) unauthorized practice of law by nonattorneys engaged in tax practice 
B) legal research by taxpayers 
C) attorneys and CPAs working together in a practice 
D) all of these are correct

Question 20

A contingent fee is:

Accepted Answer

A) always allowed by Circular 230 
B) a fee that is out of line with the value of the service provided 
C) a fee based on a percentage of a taxpayer's refund on a tax return 
D) all of these are correct 
A) always allowed by Circular 230 
B) a fee that is out of line with the value of the service provided 
C) a fee based on a percentage of a taxpayer's refund on a tax return 
D) all of these are correct

The Statements on Standards for Tax Services (SSTS)are issued by:

Tax practitioners (as defined by the IRS)are regulated by Circular 230.

If a CPA becomes aware of an error in a tax return, he or she must immediately notify the IRS.

Explain which types of services a CPA can and cannot provide toavoid engaging in the unauthorized practice of law.

An attorney, CPA, or enrolled agent may use advertising toobtain clients under Circular 230.

Tobecome an enrolled agent, a person must either pass a special IRS examination or must work for the IRS for at least five years.

Drafting wills is a part of a CPA's professional duties.

Regarding open transactions, which of the following statements is INCORRECT?

Explain the standards for professional services that involve tax return positions under SSTS No.1. What is the level of authority for disclosed or undisclosed positions and what types of authority can be relied upon?

Tax practice can be defined as the application of the tax laws tospecific accounting situations.

In a closed transaction, the scope of tax planning is:

A member of the AICPA is not allowed toprepare tax returns that involve the use of the taxpayer's estimates.

Tax avoidance and tax evasion are both illegal.

Due diligence, in essence, means a tax practitioner:

Whocan represent a taxpayer before the IRS Appeals Office under Circular 230?

Explain the AICPA guidelines under SSTS No. 3 for relying without verification on taxpayer or third-party information when preparing a tax return.

Which of the following is CORRECT about a CPA's responsibility with regard totax return positions under Statements on Standards for Tax Services No. 1 (SSTS No. 1)?

Explain the concept of "limited practice without enrollment" under Circular 230 and list several of the special situations in which the IRS allows this type of representation.

The Lowell Bar Association v. Loeb case addressed the issue of:

A contingent fee is:

Tax Research Methodology

Constitutional and Legislative Sources

Administrative Regulations and Rulings

Judicial Interpretations

Thomson Reuters Checkpoint

CCH Intelliconnect

Other Tax Services and Tax Periodicals

Multijurisdictional Taxes

Communicating Research Results

Tax Planning

Working With the IRS

Tax Practice and Administration

Filters

Exam 1: Introduction Totax Practice and Ethics

The Statements on Standards for Tax Services (SSTS)are issued by:

Tax practitioners (as defined by the IRS)are regulated by Circular 230.

If a CPA becomes aware of an error in a tax return, he or she must immediately notify the IRS.

Explain which types of services a CPA can and cannot provide toavoid engaging in the unauthorized practice of law.

An attorney, CPA, or enrolled agent may use advertising toobtain clients under Circular 230.

Tobecome an enrolled agent, a person must either pass a special IRS examination or must work for the IRS for at least five years.

Drafting wills is a part of a CPA's professional duties.

Regarding open transactions, which of the following statements is INCORRECT?

Explain the standards for professional services that involve tax return positions under SSTS No.1. What is the level of authority for disclosed or undisclosed positions and what types of authority can be relied upon?

Tax practice can be defined as the application of the tax laws tospecific accounting situations.

In a closed transaction, the scope of tax planning is:

A member of the AICPA is not allowed toprepare tax returns that involve the use of the taxpayer's estimates.

Tax avoidance and tax evasion are both illegal.

Due diligence, in essence, means a tax practitioner:

Whocan represent a taxpayer before the IRS Appeals Office under Circular 230?

Explain the AICPA guidelines under SSTS No. 3 for relying without verification on taxpayer or third-party information when preparing a tax return.

Which of the following is CORRECT about a CPA's responsibility with regard totax return positions under Statements on Standards for Tax Services No. 1 (SSTS No. 1)?

Explain the concept of "limited practice without enrollment" under Circular 230 and list several of the special situations in which the IRS allows this type of representation.

The Lowell Bar Association v. Loeb case addressed the issue of:

A contingent fee is:

Tax Research Methodology

Constitutional and Legislative Sources

Administrative Regulations and Rulings

Judicial Interpretations

Thomson Reuters Checkpoint

CCH Intelliconnect

Other Tax Services and Tax Periodicals

Multijurisdictional Taxes

Communicating Research Results

Tax Planning

Working With the IRS

Tax Practice and Administration

Filters