Question 1

Circular 230 includes rules on all of the following topics EXCEPT:

Accepted Answer

A)  whois authorized topractice before the IRS
B)  standards for "covered opinions"
C)  compliance with state ethical requirements
D)  a set of best practices toguide practitionersE) A) and B)
F) A) and D)

Question 2

The ABA Model Code of Professional Responsibility has the force of law and covers all attorneys practicing in the United States.

Accepted Answer

A) True 
 B)False  False

Question 3

Tax planning has a higher likelihood of success when a tax practitioner is dealing with an open transaction instead of a closed transaction.

Accepted Answer

A) True 
 B)False

Question 4

Tax litigation is a process of:

Accepted Answer

A)  participating in an administrative audit
B)  settling tax-related disputes in a court of law
C)  filing amended tax returns as prescribed by tax laws
D)  arranging a taxpayer's affairs tominimize tax liabilitiesE) A) and B)
F) A) and C)

Question 5

Tax evasion is:

Accepted Answer

A)  a fraudulent act involving illegal nonpayment of taxes
B)  one of the objectives of tax planning
C)  an act of deferring tax payments tofuture periods
D)  the same as tax avoidance as both of them result in nonpayment of taxesE) None of the above
F) A) and B) A

Question 6

Which of the following statements is CORRECT regarding the unauthorized practice of law?

Accepted Answer

A)  Taxpayers may not represent themselves in Tax Court.
B)  A CPA cannot express a legal opinion on a non-tax matter.
C)  A CPA cannot  draft wills or trust  instruments.
D)  Both b and c are correct.E) None of the above
F) A) and D)

Question 7

What standard must tax practitioners meet under Section 6694 (preparer penalties)of the Internal Revenue Code with respect toundisclosed positions taken on tax returns?

Accepted Answer

Tax return positions which are not discl...

Question 8

Under Section 10.3, Subpart A, of Circular 230, the following individuals may practice before the IRS EXCEPT:

Accepted Answer

A)  unenrolled agents
B)  enrolled agents
C)  enrolled actuaries
D)  enrolled retirement plan agentsE) C) and D)
F) A) and B)

Question 9

The six principles of professional conduct under the AICPA Code include:

Accepted Answer

A)  responsibilities
B)  public interest
C)  integrity
D)  All of these are correctE) None of the above
F) A) and B)

Question 10

The three categories of modern tax practice include tax planning, tax compliance, and tax research.

Accepted Answer

A) True 
 B)False

Question 11

In which of the following situations would a CPA be engaged in the unauthorized practice of law?

Accepted Answer

A)  The CPA drafts a contract for his small business client.
B)  The CPA files a client's state tax return.
C)  The CPA answers estate tax questions for his client.
D)  The CPA represents his client before the IRS.E) C) and D)
F) A) and D)

Question 12

Tax compliance is the process of:

Accepted Answer

A)  filing necessary tax returns
B)  gathering the financial information necessary toreport taxable income
C)  representing a taxpayer at an IRS audit
D)  all of these are correctE) A) and C)
F) B) and C)

Question 13

Tax research is required only for tax planning, not preparing returns.

Accepted Answer

A) True 
 B)False  False

Question 14

State Boards of Accountancy are the organizations with responsibility tolicense public accountants in each state.

Accepted Answer

A) True 
 B)False

Question 15

Taxation and tax practice are comprised of the interaction of several disciplines. What are those disciplines? Briefly discuss their impact on the tax system.

Accepted Answer

Tax practice involves a blend of account...

Question 16

The Statements on Standards for Tax Services are:

Accepted Answer

A)  part of the ABA Code of Professional Responsibility
B)  intended toreplace Circular 230
C)  intended tosupplement the AICPA Code of Professional Conduct and Circular 230
D)  none of these are correctE) None of the above
F) B) and C)

Question 17

A CPA can rely without verification on information given tothe CPA by a taxpayer unless the information appears tobe incorrect.

Accepted Answer

A) True 
 B)False

Question 18

Who may represent a taxpayer before the IRS in cases which gobeyond the examination of the return?

Accepted Answer

Under Circular 230, the following indivi...

Question 19

Circular 230 bans tax practitioners from giving written advice on a federal tax issue based on the likelihood of an audit.

Accepted Answer

A) True 
 B)False

Question 20

Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:

Accepted Answer

A)  m embers of the AICPA
B)  enrolled agents
C)  attorneys
D)  IRS authorities
E)  all of these are correctF) A) and D)
G) A) and B)

Exam 1: Introduction Totax Practice and Ethics

Circular 230 includes rules on all of the following topics EXCEPT:

Correct AnswerverifiedShow Answer

The ABA Model Code of Professional Responsibility has the force of law and covers all attorneys practicing in the United States.

Correct AnswerverifiedFalse

Tax planning has a higher likelihood of success when a tax practitioner is dealing with an open transaction instead of a closed transaction.

Correct AnswerverifiedShow Answer

Tax litigation is a process of:

Correct AnswerverifiedShow Answer

Tax evasion is:

Correct AnswerverifiedA

Which of the following statements is CORRECT regarding the unauthorized practice of law?

Correct AnswerverifiedShow Answer

What standard must tax practitioners meet under Section 6694 (preparer penalties)of the Internal Revenue Code with respect toundisclosed positions taken on tax returns?

Correct AnswerverifiedTax return positions which are not discl...View AnswerShow Answer

Under Section 10.3, Subpart A, of Circular 230, the following individuals may practice before the IRS EXCEPT:

Correct AnswerverifiedShow Answer

The six principles of professional conduct under the AICPA Code include:

Correct AnswerverifiedShow Answer

The three categories of modern tax practice include tax planning, tax compliance, and tax research.

Correct AnswerverifiedShow Answer

In which of the following situations would a CPA be engaged in the unauthorized practice of law?

Correct AnswerverifiedShow Answer

Tax compliance is the process of:

Correct AnswerverifiedShow Answer

Tax research is required only for tax planning, not preparing returns.

Correct AnswerverifiedFalse

State Boards of Accountancy are the organizations with responsibility tolicense public accountants in each state.

Correct AnswerverifiedShow Answer

Taxation and tax practice are comprised of the interaction of several disciplines. What are those disciplines? Briefly discuss their impact on the tax system.

Correct AnswerverifiedTax practice involves a blend of account...View AnswerShow Answer

The Statements on Standards for Tax Services are:

Correct AnswerverifiedShow Answer

A CPA can rely without verification on information given tothe CPA by a taxpayer unless the information appears tobe incorrect.

Correct AnswerverifiedShow Answer

Who may represent a taxpayer before the IRS in cases which gobeyond the examination of the return?

Correct AnswerverifiedUnder Circular 230, the following indivi...View AnswerShow Answer

Circular 230 bans tax practitioners from giving written advice on a federal tax issue based on the likelihood of an audit.

Correct AnswerverifiedShow Answer

Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:

Correct AnswerverifiedShow Answer

Correct Answer
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False

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A

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Tax return positions which are not discl...
View Answer

Correct Answer
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False

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Tax practice involves a blend of account...
View Answer

Correct Answer
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Correct Answer
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Under Circular 230, the following indivi...
View Answer

Correct Answer
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Correct Answer
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