IRS EA Exam 3 – Representation Questions & AnswersIRS
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Course
IRS EA
Institution
IRS EA
Taxpayer Advocate Service - ANSWERA taxpayer can request Taxpayer Advocate Service Assistance on Form 911 and must indicate one or more of the following reasons:
-he is experiencing economic harm or is about to suffer economic harm
-he is facing an immediate threat of adverse action
-he will s...
IRS EA Exam 3 – Representation
Questions & Answers
Taxpayer Advocate Service - ANSWERA taxpayer can request Taxpayer Advocate
Service Assistance on Form 911 and must indicate one or more of the following
reasons:
-he is experiencing economic harm or is about to suffer economic harm
-he is facing an immediate threat of adverse action
-he will suffer irreparable injury or long-term adverse impact if relief is not granted
-he will incur significant costs of relief is not granted (including fees for professional
representation)
-he has experienced a delay of more than 30 days to resolve a tax account problem
-he has not received a response or resolution to his problem or inquiry by the date
promised
-a system or procedure has either failed to operate as intended or failed to resolve the
taxpayer's problem or dispute with the IRS
-the manner in which the tax laws are being administered raises concerns of equity or
has impaired or will impair the taxpayer's rights
Practice before the IRS - ANSWER-Corresponding and communicating with the IRS
-Representing a taxpayer at conferences, hearings, or meetings with the IRS
-Preparing and filing documents with the IRS
-Providing written advice that has a potential for tax avoidance or evasion (opinions on
tax sheltering)
US citizenship is NOT required to practice before the IRS.
Tax preparation, in and of itself, does NOT constitute "practice before the IRS" (from
landmark Loving v IRS case where courts decided that IRS does not have authority to
regulate preparers).
Representing a taxpayer before the US Tax Court has its own set of rules and isn't
considered practicing before the IRS. Merely operating as a witness or translating isn't
either, but they can't advocate for the taxpayer.
PTIN - ANSWERPreparer Tax Identification Number
Mandatory 9 digit number that preparers (and CPAs and attorneys) must use when they
prepare and sign a tax return or claim for refund. Or if they prepare returns for
compensation.
,It is a requirement for Enrolled Agents.
Have to renew your existing PTIN each year by December 31 either online or by mailing
W-12. It now includes a Data Security Disclaimer.
The IRS has the right to charge a fee for a PTIN.
Supervised Preparers - ANSWERIndividuals that don't sign the return but help prepare
under supervision of preparer.
They must have a PTIN but they may not sign, represent taxpayers, or identity
themselves as circular 230 Preparers.
Exceptions to PTIN Requirements - ANSWERAn individual who prepares a tax return
with no agreement for compensation is not considered a tax return preparers. (You can
prepare returns for friends or family members for free or for cookies.:))
A person who gives an opinion about events that have not yet happened.
A person who furnishes typing, copying, or mechanical assistance.
A person who prepares the return of his employer. (ie full time employee or bookkeeper
filing payroll taxes).
A fiduciary who prepares a tax return for a trust or an estate.
An unpaid volunteer for VITA or TCPE (Tax Counseling for the Elderly)
An employee of the IRS who performs official duties by preparing a return for a taxpayer
who requests it.
An attorney or a CPA doesn't need a PTIN unless they prepare returns for
compensation.
Enrolled Agent Licensing - ANSWER1. Pass all three tests of SEE (Exam Track) OR
Possess a min of 5 years of past service with the IRS and technical assistance as
outlined in Circular 230 (Previous Experience Track)
2. File Form 23
3. Pass a background check, which includes a tax compliance and suitability check.
You must be at least 18 years old and can't have a felony conviction.
Any individual who is involved in disreputable or criminal conduct is subject to
disciplinary action or denial of enrollment. Failure to timely file or to pay one's taxes may
also be grounds for denial. The RPO (Return Preparer Office) must inform the applicant
of the reason and then the applicant can appeal within 30 days from date of notice.
, Enrollment becomes official on the date listed on your enrollment card (Form 24-A)
even if you haven't received your card yet.
IRS Power of Attorney - ANSWERA POA is a taxpayer's written authorization for an
individual to act on the taxpayer's behalf in tax matters. Requested on Form 2848
(Power of Attorney and Declaration of Representative) where preparer must attest he is
subject to Circular 230.
Up to four representatives can be authorized per form.
Form 2848 must be used to describe the specific tax matters the representatives are
able to handle, the specific time periods, and the specific acts. Even joint filers must
submit separate forms.
Must be eligible to practice before the IRS I order to sign. (Sometimes unenrolled
individuals can if they have limited practice rights as a family member, an executor, or a
preparer with an AFSP certificate.)
Enrolled Practitioners - ANSWERAttorneys, CPAs, EAs, enrolled retirement plan agents
(ERPAs) or enrolled actuaries authorized to practice before the IRS. Can practice by
virtue of their licensing (vs relationship)
Attorneys in good standing, CPAs, and EAs are unrestricted as to which taxpayers they
can represent and what tax matters they can handle.
Enrolled Actuaries and ERPAs are limited to certain IRC sections that relate to their
area of expertise, principally those governing employee retirement plans.
OPR and RPO - ANSWEROPR (Office of Professional Responsibility) audits preparers
(conduct, discipline)
RPO (Return Preparer Office) issues PTINs and administers AFSP (Annual Filing
Season Program) testing and continuing education.
Annual Filing Season Program - ANSWERAFSP allows non credentialed return
preparers can elect to voluntarily demonstrate completion of basic filing season tax prep
and other tax law training.
To receive an annual "record of completion " they have to have a min of 18 hours of CE
(including a six hour "Annual Federal Tax Refresher" course), pass a test at the end of
the course, have a PTIN, and consent to IRS regulations.
Replaced the IRS's old RTRP program.
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