Part 3 Exam 1

EA Full Length Practice Test Part III – Exam 1

This is an EA full-length practice exam designed to replicate real test conditions as closely as possible.

📘 Exam Instructions

Before You Begin

Time Limit: 210 minutes (Timer will start when you click ‘Start’)
Format: 100 multiple-choice questions
Environment: Choose a quiet space with no distractions
No Resources: Close books, notes, and this guide
Answer Every Question: Even if unsure, make your best guess
Simulate Real Conditions:
- No phone
- No interruptions
- No unnecessary breaks

🧠 When You Start

Start the timer and begin with Question 1
Work steadily — do not spend too much time on one question
If a question is too difficult, skip it and return later if time allows
Stay focused and maintain a consistent pace

⏱️ After Completion

Stop immediately at 210 minutes, even if you are not finished
Do not check answers during the test
Review your answers only after completing the entire exam

1 / 100

Tags: Circular, practitioner, aware, that

A. Under Circular 230, if a practitioner is aware that a client has made an error in a return, the practitioner must:

A. Promptly notify the Internal Revenue Service.

B. File an amended return immediately on behalf of the client.

C. Promptly advise the client of the error and the potential consequences.

D. Withdraw from the representation immediately to avoid complicity.

2 / 100

Tags: Which, following, acts, Enrolled

B. Which of the following acts by an Enrolled Agent would be considered “Disreputable Conduct” subject to censure or disbarment?

A. Requesting a timely extension for a client's return.

B. Charging a fee for representing a client in an audit.

C. Knowingly giving false or misleading information to the Department of the Treasury.

D. Disagreeing with an Internal Revenue Agent's interpretation of a Revenue Ruling.

3 / 100

Tags: Power, attorney, form, generally

C. A Power of Attorney (Form 2848) generally remains in effect until:

A. The tax year in question is closed by the statute of limitations.

B. The taxpayer receives a refund check.

C. 90 days after the initial filing.

D. The practitioner dies or the client revokes it in writing.

4 / 100

Tags: Enrolled, Agent, charge, Contingent

D. An Enrolled Agent may NOT charge a “Contingent Fee” for which of the following services?

A. Representing a client in a judicial proceeding.

B. An original tax return filing.

C. A claim for credit or refund in connection with a statutory notice of deficiency.

D. Representation in connection with the examination of an amended return.

5 / 100

Tags: Which, following, Qualified, Written

E. Which of the following is a “Qualified Written Communication” regarding a private solicitation by a practitioner?

A. An email marked "Advertising Material" sent to a person known to need tax services.

B. A verbal recommendation given at a golf course.

C. A text message sent to a stranger.

D. A billboard on a highway.

6 / 100

Tags: practitioner, Conflict, Interest, involving

F. If a practitioner has a “Conflict of Interest” involving two clients with adverse interests, they may still represent both if:

A. They charge both clients the same fee.

B. Both clients provide "Informed Consent, confirmed in writing" within 30 days.

C. The practitioner believes they can provide competent and diligent representation to each.

D. Both B and C are met.

7 / 100

Tags: Freedom, Information, FOIA, required

G. Under the “Freedom of Information Act” (FOIA), the IRS is required to disclose:

A. . IRS internal policy training manuals.

B. The tax returns of a neighbor upon request

C. Investigatory records that would interfere with enforcement proceedings.

D. Information specifically exempted by statute.

8 / 100

Tags: Centralized, authorization, file, computerized

H. The “Centralized Authorization File” (CAF) is a computerized system that:

A. Stores all taxpayer bank account numbers.

B. Records authorizations for Power of Attorney and Tax Information Authorizations.

C. Calculates the accuracy-related penalty automatically.

D. Tracks the physical location of IRS revenue officers.

9 / 100

Tags: statutory, Notice, Deficiency, letter

I. A “Statutory Notice of Deficiency” (90-day letter) gives the taxpayer the right to petition which court?

A. U.S. District Court.

B. U.S. Court of Federal Claims.

C. U.S. Tax Court.

D. U.S. Supreme Court.

10 / 100

Tags: eligible, First, Time, penalty

J. To be eligible for the “First-Time Penalty Abatment” (FTA) administrative waiver, the taxpayer must have:

A. Filed all required returns or filed a valid extension.

B. Paid, or arranged to pay, any tax currently due.

C. Had no penalties (except estimated tax) for the prior 3 years.

D. All of the above.

11 / 100

Tags: Which, form, used, authorize

K. Which form is used to authorize a practitioner to receive confidential tax information but NOT to represent the taxpayer before the IRS?

A. Form 2848

B. Form 8821

C. Form 8300

D. Form 1040-X

12 / 100

Tags: Circular, requires, practitioners, Exercise

L. Circular 230 requires practitioners to exercise “Due Diligence” in:

A. Preparing and filing tax returns.

B. Determining the correctness of oral or written representations made to the client.

C. Determining the correctness of representations made to the Treasury Department.

D. All of the above.

13 / 100

Tags: practitioner, generally, rely, Information

M. A practitioner may generally rely on information provided by a client without verification, UNLESS:

A. The client is a new client.

B. The information appears to be incorrect, inconsistent, or incomplete.

C. The client has a history of small errors.

D. The practitioner is charging a flat fee.

14 / 100

Tags: Enrolled, Agent, status, must

N. An “Enrolled Agent” status must be renewed every:

A. Year.

B. Two years.

C. Three years.

D. Five years.

15 / 100

Tags: taxpayer, files, small, Case

O. If a taxpayer files a “Small Tax Case” (S-Case) in Tax Court (for amounts $leq$ $50,000), the decision is:

A. Subject to appeal by the IRS only.

B. Subject to appeal by the taxpayer only.

C. Final and cannot be appealed by either party.

D. Only valid for 1 year.

16 / 100

Tags: Which, following, taxpayer, Right

P. Which of the following is NOT a “Taxpayer Right” under the Taxpayer Bill of Rights?

A. The Right to Pay No More than the Correct Amount of Tax.

B. The Right to Retain Representation.

C. The Right to a Guaranteed Refund.

D. The Right to Confidentiality.

17 / 100

Tags: trust, Fund, Recovery, penalty

Q. A “Trust Fund Recovery Penalty” (TFRP) is typically assessed against “Responsible Persons” for willful failure to pay:

A. Corporate income tax.

B. Employment taxes (Social Security and withheld income tax).

C. Excise taxes on luxury goods.

D. Capital gains tax.

18 / 100

Tags: Collection, Appeal, program, available

R. The “Collection Appeal Program” (CAP) is available to a taxpayer for which of the following?

A. To challenge a Notice of Federal Tax Lien or a Levy.

B. To challenge the underlying tax liability.

C. To request an extension to file.

D. To ask for a private letter ruling.

19 / 100

Tags: Best, Practices, advisors, practitioner

S. Under the “Best Practices” for tax advisors, a practitioner should establish the “relevant facts” and:

A. Evaluate the reasonableness of any assumptions or representations.

B. Ignore any facts that are unfavorable to the client

C. Charge a fee based on the amount of tax saved.

D. Only provide advice over the phone.

20 / 100

Tags: practitioner, Disbarred, petition, reinstatement

T. A practitioner who is “Disbarred” may petition for reinstatement after:

A. 1 year.

B. 3 years.

C. 5 years.

D. 10 years.

21 / 100

Tags: Offer, compromise, based, Doubt

U. An “Offer in Compromise” (OIC) based on “Doubt as to Collectibility” requires the taxpayer to prove:

A. The tax law is unconstitutional.

B. They cannot pay the full amount of the tax liability within the remaining period for collection.

C. The IRS agent was rude during the audit.

D. They have enough assets to pay, but simply don't want to.

22 / 100

Tags: Circular, officially, known

V. “Circular 230” is officially known as:

A. IRS Publication 17.

B. The Taxpayer Advocate Service Charter.

C. The Internal Revenue Code.

D. Title 31 of the Code of Federal Regulations, Part 10.

23 / 100

Tags: practitioner, represent, Client, without

W. A practitioner may represent a client before the IRS without a Form 2848 if the practitioner is:

A. Present during the meeting with the taxpayer and the taxpayer provides oral consent.

B. A family member.

C. The taxpayer's neighbor.

D. None of the above (written authorization is always required for full representation).

24 / 100

Tags: accuracy, Related, penalty, Section

X. The “Accuracy-Related Penalty” (Section 6662) is generally what percentage of the underpayment?

A. 10%

B. 20%

C. 40%

D. 75%

25 / 100

Tags: taxpayer, many, days, file

Y. A taxpayer has how many days to file a petition with the U.S. Tax Court after receiving a Statutory Notice of Deficiency (if they reside in the U.S.)?

A. 30 days

B. 60 days

C. 90 days

D. 120 days

26 / 100

Tags: statute, limitations, assess, additional

Z. The “Statute of Limitations” for the IRS to assess additional tax generally expires how many years after the return was filed (or the due date, whichever is later)?

A. 3 years

B. 2 years

C. 6 years

D. Unlimited

27 / 100

Tags: taxpayer, omits, amount, gross

AA. If a taxpayer omits an amount of “Gross Income” that is greater than 25% of the gross income stated on the return, the Statute of Limitations for assessment is extended to:

A. 5 years

B. 6 years

C. 10 years

D. Unlimited

28 / 100

Tags: cases, false, Fraudulent, return

AB. In cases of a “False or Fraudulent” return filed with the intent to evade tax, the Statute of Limitations for assessment is:

A. 6 years

B. 10 years

C. 20 years

D. Unlimited

29 / 100

Tags: Which, following, Authorized, file

AC. Which of the following is an “Authorized e-file Provider” responsibility?

A. To verify the taxpayer's identity and ensure the return is signed.

B. To guarantee the taxpayer receives their refund within 10 days.

C. To keep paper copies of all returns for 10 years.

D. To provide free tax advice to anyone who walks in the door.

30 / 100

Tags: practitioner, must, inform, Client

AD. A practitioner must inform a client of the “Retention Period” for records. Under Circular 230, if a practitioner publishes a “Fee Schedule,” they must stick to those rates for at least how many days after the last publication?

A. 30 days

B. 60 days

C. 90 days

D. 120 days

31 / 100

Tags: trust, Fund, Recovery, penalty

AE. The “Trust Fund Recovery Penalty” (TFRP) can be assessed against which of the following?

A. An outside bookkeeper with no decision-making power.

B. A volunteer member of a board of directors who has no financial control.

C. An officer or employee with the power to direct the payment of funds.

D. A shareholder who owns 1% of the stock and does not work at the company.

32 / 100

Tags: Enrolled, Agent, representing, Client

AF. When an Enrolled Agent is representing a client in an audit, the IRS “Revenue Agent” (RA) generally must:

A. Bypass the EA and speak directly to the taxpayer.

B. Provide the EA with a copy of all other clients' tax returns.

C. Only speak to the taxpayer's spouse.

D. Deal directly with the EA unless the EA causes unreasonable delay.

33 / 100

Tags: Information, Document, request, used

AG. An “Information Document Request” (IDR) is used by the IRS during an examination to:

A. Arrest a taxpayer.

B. Request specific documents or information relevant to the audit.

C. Seize a taxpayer's bank account.

D. Issue a final notice of deficiency.

34 / 100

Tags: Which, following, Nonsubstantive, error

AH. Which of the following is a “Nonsubstantive” error on an e-filed return that does NOT require a new signature from the taxpayer?

A. . A change in the "Total Income" or "Amount Owed" of $50 or less.

B. A change in the Taxable Income of more than $100

C. A change in the Social Security Number of the primary taxpayer.

D. A change in the filing status from Single to Head of Household.

35 / 100

Tags: practitioner, charged, Incompetence, Disreputable

AI. If a practitioner is charged with “Incompetence” or “Disreputable Conduct,” the case is heard by:

A. The U.S. Tax Court.

B. The local police.

C. An Administrative Law Judge (ALJ).

D. The Supreme Court.

36 / 100

Tags: Notice, federal, Lien, NFTT

AJ. A “Notice of Federal Tax Lien” (NFTT) is filed to:

A. Publicly notify creditors that the IRS has a legal right to the taxpayer's property.

B. Take money directly from a paycheck.

C. Forgive the taxpayer's debt.

D. Extend the time the taxpayer has to file a return.

37 / 100

Tags: Which, penalty, applied, taxpayer

AK. Which “Penalty” is applied if a taxpayer fails to file a return by the due date (including extensions)?

A. 0.5% per month of the unpaid tax.

B. $10,000 flat fee.

C. 20% of the underpayment.

D. 5% per month of the unpaid tax (up to 25%).

38 / 100

Tags: taxpayer, request, Collection, process

AL. A taxpayer can request a “Collection Due Process” (CDP) hearing within how many days of the filing of a Notice of Federal Tax Lien?

A. 10 days

B. 30 days

C. 60 days

D. 90 days

39 / 100

Tags: Circular, practitioner, must, provide

AM. Under Circular 230, a practitioner must NOT provide “Written Advice” that:

A. Is based on reasonable factual or legal assumptions.

B. Takes into account the possibility that a return will not be audited.

C. Relies on representations that the practitioner knows are incorrect.

D. Both B and C.

40 / 100

Tags: Information, authorization, form, differs

AN. A “Tax Information Authorization” (Form 8821) differs from a “Power of Attorney” (Form 2848) because the 8821:

A. Does not allow the practitioner to advocate for or represent the taxpayer.

B. Lasts for 100 years.

C. Can only be used by CPAs.

D. Allows the practitioner to sign the tax return.

41 / 100

Tags: Office, Appeals, intended

AO. The IRS “Office of Appeals” is intended to be:

A. An extension of the audit division to find more tax.

B. An independent organization within the IRS to resolve tax disputes without litigation.

C. A court of law where witnesses are subpoenaed.

D. Only for corporations with assets over $100 million.

42 / 100

Tags: Which, following, valid, reason

AP. Which of the following is NOT a valid reason for “Penalty Abatement” based on “Reasonable Cause”?

A. Death or serious illness of the taxpayer or immediate family.

B. Destruction of records by fire or flood.

C. Ignorance of the law.

D. Erroneous advice from a competent tax professional.

43 / 100

Tags: John, Summons, used

AQ. A “John Doe Summons” is used when:

A. The IRS knows the identity of the taxpayer but can't find them.

B. The IRS wants to summon a person named John Doe.

C. A taxpayer uses a fake name.

D. The IRS wants to summon a person named John Doe. The IRS doesn't know the specific identity of the taxpayer(s) but has reason to believe a group is violating tax laws.

44 / 100

Tags: Which, form, used, report

AR. Which IRS form is used to report “Cash Payments” over $10,000 received in a trade or business?

A. Form 8300

B. Form 1040

C. Form 1099-INT

D. Form 1120

45 / 100

Tags: Enrolled, Agent, Continuing, Professional

AS. An Enrolled Agent’s “Continuing Professional Education” (CPE) must include at least how many hours of “Ethics” per year?

A. 1 hour

B. 4 hours

C. 2 hours

D. 10 hours

46 / 100

Tags: form, disclosure, statement, used

AT. “Form 8275” (Disclosure Statement) is used by taxpayers to:

A. Request a refund.

B. Disclose items or positions that are not otherwise adequately disclosed on a return to avoid certain penalties.

C. Report a change of address.

D. Apply for S-Corporation status.

47 / 100

Tags: Levy, different, Lien, because

AU. A “Levy” is different from a “Lien” because a Levy:

A. Is just a piece of paper in the public record.

B. Is the actual legal seizure of property to satisfy a tax debt.

C. Is always voluntary.

D. Only applies to real estate.

48 / 100

Tags: Circular, practitioner, represent, Client

AV. Under Circular 230, a practitioner may NOT represent a client if the practitioner is a “Federal Officer” or “Employee” of the U.S. Government.

A. True.

B. False.

C. Only if they work for the IRS.

D. Only if they work for the Department of Defense.

49 / 100

Tags: Injured, spouse, relief, form

AW. “Injured Spouse” relief (Form 8379) is requested when:

A. A spouse is physically hurt by the other spouse.

B. A joint overpayment is applied to the past-due debt of the other spouse.

C. A spouse wants to file "Married Filing Separately."

D. A spouse fails to report their income.

50 / 100

Tags: Preparer, Identification, number, PTIN

AX. The “Preparer Tax Identification Number” (PTIN) must be renewed:

A. Every 3 years.

B. Every 5 years.

C. Annually.

D. Once per lifetime.

51 / 100

Tags: Which, following, Appeals, process

AY. Which of the following is an “Appeals” process specifically designed for a taxpayer to contest a “Notice of Federal Tax Lien” or “Notice of Intent to Levy” before the seizure occurs?

A. Collection Appeal Program (CAP).

B. Offer in Compromise (OIC).

C. Post-Appeals Mediation.

D. Collection Due Process (CDP).

52 / 100

Tags: practitioner, required, Promptly, return

AZ. A practitioner is required to “Promptly” return a client’s records. However, under Circular 230, a practitioner may retain “Client Records” if:

A. The client owes a significant amount of money for tax preparation.

B. The records are needed to prepare a future return for a different client.

C. The practitioner is currently under IRS investigation.

D. A state law allows for a "practitioner’s lien" on records in the event of a fee dispute.

53 / 100

Tags: practitioner, Censured, Office, Professional

BA. If a practitioner is “Censured” by the Office of Professional Responsibility (OPR), this means:

A. They are permanently banned from IRS practice.

B. They are issued a public reprimand.

C. They are required to retake the SEE exam within 30 days.

D. Their PTIN is revoked for exactly one year.

54 / 100

Tags: Appeal, trust, Fund, Recovery

BB. To appeal a “Trust Fund Recovery Penalty” (TFRP) assessment, a taxpayer must file a formal protest within how many days of the date on the “Letter 1153”?

A. 10 days

B. 30 days

C. 60 days

D. 90 days

55 / 100

Tags: Which, following, Material, limitation

BC. Which of the following is a “Material Limitation” conflict of interest under Section 10.29 of Circular 230?

A. Representing a husband and wife who are filing a joint return.

B. Representing a corporation and its 100% shareholder in a non-adverse audit.

C. Representing two partners in a partnership where one partner is accusing the other of embezzlement.

D. Representing a father and son who are both independent contractors.

56 / 100

Tags: Notice, Deficiency, often, referred

BD. A “Notice of Deficiency” is often referred to as the “Ticket to Tax Court.” If the 90-day period expires and no petition is filed:

A. The taxpayer is granted an automatic 30-day extension.

B. The tax is assessed and the IRS begins the collection process.

C. The IRS must file a lawsuit in District Court to collect the money.

D. The taxpayer's refund is automatically approved.

57 / 100

Tags: Which, Administrative, Waiver, allows

BE. Which “Administrative Waiver” allows the IRS to remove a “Failure to File” penalty for a taxpayer who has a clean compliance history for the past three years?

A. Reasonable Cause.

B. Statutory Exception.

C. First-Time Abate (FTA).

D. Hazard of Litigation.

58 / 100

Tags: practitioner, Knowingly, helps, Client

BF. A practitioner who “Knowingly” helps a client prepare a fraudulent return can be subject to a “Preparer Penalty” of:

A. $1,000 per return.

B. $5,000 or 75% of the income derived from the return, whichever is greater.

C. 10% of the taxpayer's total assets.

D. A flat fee of $100,000.

59 / 100

Tags: practitioner, served, Summons, Client

BG. If a practitioner is served with an IRS summons for a client’s records, but the records are “Privileged,” the practitioner should:

A. Hand them over immediately to show good faith.

B. Destroy the records to protect the client.

C. Assert the "Privilege" and decline to provide the specific protected documents.

D. Turn the records over to the local police.

60 / 100

Tags: taxpayer, Advocate, Service, independent

BH. The “Taxpayer Advocate Service” (TAS) is an independent organization within the IRS that helps taxpayers who:

A. Are experiencing financial difficulties or "Systemic" problems with the IRS.

B. Want to find a way to stop paying all federal taxes.

C. Are looking for a free tax preparer.

D. Want to sue their private tax preparer for malpractice.

61 / 100

Tags: Installment, agreement, generally, Guaranteed

BI. An “Installment Agreement” (IA) is generally guaranteed for an individual taxpayer if the liability is $10,000 or less and:

A. The taxpayer hasn't failed to file or pay in the last 5 years.

B. The taxpayer agrees to pay the full amount within 3 years.

C. The taxpayer cannot get credit elsewhere.

D. All of the above.

62 / 100

Tags: form, used, taxpayer, request

BJ. “Form 12153” is used by a taxpayer to request:

A. An automatic 6-month extension to file.

B. A Collection Due Process (CDP) or Equivalent Hearing.

C. A change in accounting method.

D. A refund of overpaid social security tax.

63 / 100

Tags: Which, statute, limitations, applies

BK. Which “Statute of Limitations” applies if the IRS proves the taxpayer willfully attempted to evade tax?

A. 3 years

B. 6 years

C. 10 years

D. None (Unlimited)

64 / 100

Tags: practitioner, must, obtain, Informed

BL. A practitioner must obtain “Informed Consent, confirmed in writing” from each affected client to waive a conflict of interest. The practitioner must keep these written consents for how long?

A. 3 years from the conclusion of the representation

B. 1 year

C. 6 years

D. Permanently

65 / 100

Tags: Enrolled, Agent, status, granted

BM. “Enrolled Agent” status is granted by:

A. The AICPA.

B. The U.S. Tax Court. The

C. Treasury Department (Internal Revenue Service).

D. The State Board of Accountancy.

66 / 100

Tags: Bypass, practitioner, contact, taxpayer

BN. The IRS may “Bypass” a practitioner and contact the taxpayer directly if:

A. The practitioner is too busy to answer the phone.

B. The practitioner fails to respond to repeated requests for information within a reasonable time.

C. The Revenue Agent finds the practitioner's office to be messy.

D. The taxpayer is a high-profile celebrity.

67 / 100

Tags: Section, privilege, practitioner, Client

BO. A “Section 7525” privilege (Tax Practitioner-Client Privilege) applies to communications regarding:

A. Tax advice on civil tax matters between a client and a federally authorized practitioner.

B. Criminal tax matters.

C. The preparation of a tax return.

D. Tax shelters.

68 / 100

Tags: practitioner, Suspended, practice, They

BP. If a practitioner is “Suspended” from practice, they are prohibited from:

A. Only signing tax returns.

B. Talking to their friends about the IRS.

C. Charging any fees for any type of work, including non-tax work.

D. Representing clients before any branch of the IRS during the suspension period.

69 / 100

Tags: Which, Collection, Action, involves

BQ. Which “Collection Action” involves the IRS taking a portion of a taxpayer’s wages directly from their employer?

A. Lien.

B. Levy (Notice of Levy on Wages).

C. Summons.

D. Jeopardy Assessment.

70 / 100

Tags: small, Case, Case, Court

BR. A “Small Case” (S-Case) in Tax Court is limited to disputes involving how much tax/penalties per year?

A. $10,000 or less

B. $25,000 or less

C. $50,000 or less

D. $100,000 or less

71 / 100

Tags: Circular, practitioner, sign, return

BS. Under Circular 230, a practitioner may NOT “Sign” a tax return as a preparer unless they have:

A. A CPA license.

B. A valid Preparer Tax Identification Number (PTIN).

C. A law degree.

D. At least 10 years of experience.

72 / 100

Tags: Offer, compromise, processed, effective

BT. An “Offer in Compromise” (OIC) may be processed under the “Effective Tax Administration” (ETA) category if:

A. There is doubt that the tax is correct.

B. There is doubt that the tax can be collected.

C. Collection would create an "Economic Hardship" or would be "Unfair and Inequitable."

D. The taxpayer has already paid the tax.

73 / 100

Tags: Ombudsman, Head, Which, Office

BU. The “Ombudsman” of the IRS is the head of which office?

A. Office of Professional Responsibility (OPR).

B. Large Business and International (LB&I).

C. Criminal Investigation (CI).

D. Taxpayer Advocate Service (TAS).

74 / 100

Tags: practitioner, Written, Advice, must

BV. A practitioner’s “Written Advice” must not be based on “Unreasonable Assumptions.” An example of an unreasonable assumption is:

A. Assuming the client is telling the truth unless there is a reason to doubt it.

B. Assuming that the client will pay their bill.

C. Assuming that a relevant tax law will remain in effect.

D. Assuming that a transaction will not be audited by the IRS.

75 / 100

Tags: Expedited, suspension, practitioner, occur

BW. “Expedited Suspension” of a practitioner can occur without a full hearing if the practitioner has:

A. Failed to renew their PTIN on time.

B. Been convicted of a crime involving dishonesty or breach of trust.

C. Been late to a meeting with an IRS agent.

D. Charged a fee higher than the industry average.

76 / 100

Tags: Which, following, employees, Authorized

BX. Which of the following IRS employees is authorized to carry a firearm and execute search warrants during a tax investigation?

A. Revenue Agent (RA)

B. Revenue Officer (RO)

C. Special Agent (Criminal Investigation)

D. Taxpayer Advocate

77 / 100

Tags: Kovel, doctrine, attorney, Client

BY. Under the “Kovel” doctrine, the attorney-client privilege can be extended to a tax practitioner if:

A. The practitioner is hired by the attorney to assist in providing legal advice to the client.

B. The practitioner is also a CPA.

C. The client pays the practitioner directly.

D. The practitioner is representing the client in a civil audit.

78 / 100

Tags: Notice, Intent, Levy, must

BZ. A “Notice of Intent to Levy” must generally be sent to the taxpayer at least how many days before the levy actually occurs?

A. 10 days

B. 30 days

C. 60 days

D. 90 days

79 / 100

Tags: Enrolled, Agent, representing, Client

CA. An Enrolled Agent is representing a client in an audit. The Revenue Agent asks for a document that the EA knows does not exist. The EA should:

A. Create the document to satisfy the agent.

B. Tell the agent the document is "lost."

C. Inform the agent that the document does not exist.

D. Ignore the question entirely.

80 / 100

Tags: Which, following, Abridged, Expedited

CB. Which of the following is an “Abridged” or “Expedited” proceeding for a practitioner’s suspension under Circular 230?

A. Failing to pay personal income taxes for five consecutive years.

B. Being convicted of a felony under the Internal Revenue Code.

C. Losing a CPA license due to professional misconduct.

D. All of the above.

81 / 100

Tags: taxpayer, Offer, compromise, rejected

CC. If a taxpayer’s “Offer in Compromise” (OIC) is rejected, the taxpayer has how many days to appeal the rejection?

A. 15 days

B. 30 days

C. 45 days

D. 60 days

82 / 100

Tags: practitioner, provides, Marketed, Opinions

CD. A practitioner who provides “Marketed Opinions” (tax shelter advice) must include which of the following in the written advice?

A. A statement that the advice cannot be used for the purpose of avoiding penalties.

B. A guarantee that the IRS will not audit the transaction.

C. The names of all other clients who have used the strategy.

D. A copy of the practitioner's diploma.

83 / 100

Tags: Burden, Proof, Court, proceeding

CE. The “Burden of Proof” in a court proceeding generally shifts to the IRS if the taxpayer:

A. Is a corporation with assets over $50 million.

B. Has complied with all substantiation requirements and maintained all required records.

C. Refuses to speak to the IRS.

D. Files an amended return.

84 / 100

Tags: Which, following, constitutes, Insolvency

CF. Which of the following constitutes “Insolvency” for the purpose of an Offer in Compromise?

A. The taxpayer has a low credit score.

B. The taxpayer's total liabilities exceed the fair market value of their total assets.

C. The taxpayer is currently unemployed.

D. The taxpayer has no cash in their checking account.

85 / 100

Tags: Circular, Best, Practices, advisors

CG. Under Circular 230, “Best Practices” for tax advisors include which of the following?

A. Communicating clearly with the client regarding the terms of the engagement.

B. Establishing the facts and evaluating assumptions.

C. Advising the client regarding the import of the conclusions reached.

D. All of the above.

86 / 100

Tags: Summons, issued, Third, Party

CH. A “Summons” issued to a “Third-Party Recordkeeper” (such as a bank) requires the IRS to provide notice to the taxpayer within:

A. 3 days of the service of the summons.

B. 10 days of the service of the summons.

C. 23 days before the day fixed for the examination of records.

D. 90 days after the records are received.

87 / 100

Tags: penalty, Frivolous, Submissions, Section

CI. The penalty for “Frivolous Tax Submissions” (Section 6702) is generally:

A. $500

B. $1,000

C. $5,000

D. 10% of the tax due.

88 / 100

Tags: Enrolled, Agent, term, Certified

CJ. An Enrolled Agent may use the term “Certified Tax Preparer” in their advertising.

A. False, as Circular 230 prohibits misleading descriptions of professional status.

B. True, if they have a certificate from a local college.

C. True, because EAs are certified by the Treasury.

D. False, only if they are not a CPA.

89 / 100

Tags: practitioner, Partner, firm, another

CK. If a practitioner is a “Partner” in a firm, and another partner is disbarred from IRS practice, the practitioner:

A. Is also automatically disbarred.

B. Must pay a fine to the OPR.

C. Must dissolve the partnership immediately.

D. May still practice, but must not allow the disbarred partner to assist in any IRS-related representation.

90 / 100

Tags: Which, following, Preparer, penalty

CL. Which of the following is NOT a “Preparer Penalty” under the Internal Revenue Code?

A. Failure to sign a return.

B. Failure to provide a copy of the return to the taxpayer.

C. Failure to provide the IRS with a list of all clients.

D. Failure to maintain a copy of the return or a list of taxpayers.

91 / 100

Tags: taxpayer, Assistance, Order, issued

CM. A “Taxpayer Assistance Order” (TAO) is issued by:

A. The Commissioner of the IRS.

B. The National Taxpayer Advocate (or their delegate).

C. A U.S. District Court Judge.

D. The Secretary of the Treasury.

92 / 100

Tags: representing, Client, Appeals, conference

CN. If an EA is representing a client in an Appeals conference and realizes the client has “Understated” their income on a different, non-audited year, the EA must:

A. Advise the client of the error and the consequences of not correcting it.

B. Tell the Appeals Officer immediately.

C. Resign from the case.

D. Keep the information secret due to attorney-client privilege.

93 / 100

Tags: Collection, statute, Expiration, date

CO. The IRS “Collection Statute Expiration Date” (CSED) is generally how many years from the date of assessment?

A. 3 years

B. 6 years

C. 10 years

D. 20 years

94 / 100

Tags: Jeopardy, Assessment, made

CP. A “Jeopardy Assessment” is made when:

A. The taxpayer is a professional gambler.

B. The statute of limitations is about to expire in 30 days.

C. The taxpayer refuses to sign a Form 870.

D. The IRS believes the collection of tax will be endangered if done through normal procedures.

95 / 100

Tags: Enrolled, Agent, Enrollment, Card

CQ. An Enrolled Agent’s “Enrollment Card” is the property of:

A. The Enrolled Agent.

B. The Internal Revenue Service (U.S. Government).

C. The National Association of Enrolled Agents.

D. The State where the EA lives.

96 / 100

Tags: practitioner, Recklessly, discloses, taxpayer

CR. A practitioner who “Recklessly” discloses taxpayer information can be subject to a:

A. Monetary penalty and potential imprisonment.

B. Mandatory 10-year suspension.

C. Fine of $1.00 per disclosure.

D. Public apology in a national newspaper.

97 / 100

Tags: form, request, must, filed

CS. “Form 12153” (Request for CDP) must be filed within 30 days of which of the following?

A. The date of the first bill sent to the taxpayer.

B. The date the taxpayer realizes they cannot pay.

C. The date of the "Notice of Intent to Levy and Notice of Your Right to a Hearing."

D. The date the tax return was filed.

98 / 100

Tags: Circular, practitioner, Lead, Case

CT. Under Circular 230, if a practitioner is not the “Lead” on a case but provides “Significant Advice,” they are:

A. Held to the same standards of due diligence as the signing preparer.

B. Not responsible for the accuracy of the return.

C. Only responsible if they are paid more than $1,000.

D. Exempt from OPR oversight.

99 / 100

Tags: practitioner, fails, comply, request

CU. A practitioner who fails to comply with a “Request for Information” from the OPR may be:

A. Fined $10,000.

B. Forced to move to a different state.

C. Ignored by the IRS.

D. Subject to disciplinary action, including suspension or disbarment.

100 / 100

Tags: privacy, protects, taxpayers

CV. The “Privacy Act of 1974” protects taxpayers by:

A. Ensuring the IRS cannot share information with any other government agency.

B. Allowing taxpayers to see what records the IRS has about them (with exceptions).

C. Making all tax returns public after 50 years.

D. Deleting all IRS records every 10 years.

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