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IRS SEE PART 3 TEST EXAM WITH GUARANTEED ACCURATE ANSWERS |VERIFIED
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Under Treasury Circular 230, which of the following actions of a CPA tax advisor is characteristic of a best practice in rendering tax advice? A.Requesting written evidence from a client that the fee proposal for tax advice has been approved by the board of directors. B.Establishing relevant fa...

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  • August 12, 2024
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  • 2024/2025
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IRS SEE PART 3 TEST EXAM
IRS SEE PART 3 TEST EXAM WITH GUARANTEED ACCURATE ANSWERS |VERIFIED




Under Treasury Circular 230, which of the following actions of a CPA tax advisor
is characteristic of a best practice in rendering tax advice?


A.Requesting written evidence from a client that the fee proposal for tax advice
has been approved by the board of directors.
B.Establishing relevant facts, evaluating the reasonableness of assumptions and
representations, and arriving at a conclusion supported by the law and facts in a tax
memorandum.
C.Requiring the client to supply a written representation, signed under penalties of
perjury, concerning the facts and statements provided to the CPA for preparing a
tax memorandum.
D.Recommending to the client that the advisor's tax advice be made orally instead
of in a written memorandum. - ACCURATE ANSWER✅✅B.Establishing
relevant facts, evaluating the reasonableness of assumptions and representations,
and arriving at a conclusion supported by the law and facts in a tax memorandum.

,Answer B is Correct.
Best practices include (1) establishing the facts, determining which facts are
relevant, evaluating the reasonableness of any assumptions or representations,
relating applicable law (including potentially applicable judicial doctrines) to the
relevant facts, and arriving at a conclusion supported by the law and the facts; (2)
communicating clearly with the client about the terms of the engagement; (3)
advising the client regarding the importance of the conclusions reached; and (4)
acting fairly and with integrity in practice before the IRS.


A taxpayer is provided a $300 per month mileage allowance for business travel
from their employer. In order for this to be a non-taxable item, which of the
following must be true?


A.The taxpayer must adequately account for the expenses within 60 days after they
were paid or incurred.
B.The taxpayer must return any excess reimbursement within 180 days after the
expense was paid or incurred.
C.The taxpayer must receive the advance within 60 days of the time the taxpayer
has the expense.
D.The taxpayer must adequately account for the expenses within 120 days after
they were paid or incurred. - ACCURATE ANSWER✅✅A.The taxpayer must
adequately account for the expenses within 60 days after they were paid or
incurred.


Answer A is Correct.
Taxpayers must keep permanent books of account or records that are sufficient to
support items shown on a return. Taxpayers are required to substantiate business
deductions for travel and entertainment expenses. Substantiation of amount, time,
place, business relationship, and business purpose is generally required. For an
expense to be accounted for within a reasonable period of time, the taxpayer must
account for expenses within 60 days after they were paid or incurred.

,Return transcripts are available for all of the following EXCEPT


A.Form 1040.
B.Form 1065.
C.Form 1120-S.
D.Form 1099. - ACCURATE ANSWER✅✅D.Form 1099.


Answer D is Correct.
Tax returns can be printed as transcripts to show most of the numbers reported on
the return and those from accompanying schedules or forms. In many cases,
transcripts are used instead of making copies of tax returns. Transcripts are only
available for the following returns: Form 1040 series, Form 1065, Form 1120,
Form 1120-A, Form 1120-H, Form 1120-L, and Form 1120-S. Form 1099 is not
available as a return transcript.


An Enrolled Agent's (EA's) client is an individual taxpayer who is requesting
assistance with a proposed penalty. Which of the following is a method of
contesting the penalty?


A.Prior to a penalty's assessment, the EA can request binding arbitration to
reconsider the penalty.
B.After the penalty has been assessed and paid, the EA can file a claim for refund
with the IRS.
C.Prior to a penalty's assessment and before any request for relief has been denied
or a 30-day letter has been issued, the EA can request a conference with the IRS
Independent Office of Appeals.

, D.Before the penalty has been assessed, the EA can submit a written request for
penalty abatement. - ACCURATE ANSWER✅✅B.After the penalty has been
assessed and paid, the EA can file a claim for refund with the IRS.


Answer B is Correct.
Taxpayers have the right to challenge the assertion or assessment of a penalty and
generally may do so at any stage in the penalty process. A taxpayer may request an
abatement and refund after the payment (claim for refund).


All of the following individuals are eligible to practice (on a limited basis) before
the IRS EXCEPT


A.A regular full-time employee of an individual may represent the employer.
B.A limited partner in a partnership may represent the partnership.
C.A bona fide officer of a corporation may represent the corporation.
D.A trustee of a trust may represent the trust. - ACCURATE ANSWER✅✅B.A
limited partner in a partnership may represent the partnership.


Answer B is Correct.
Circular 230 states that attorneys, CPAs, enrolled agents, and other individuals who
qualify under Sec. 10.7 for limited practice may practice before the IRS. The
individuals who qualify are a taxpayer representing himself or herself; an
individual representing a family member; a full-time employee of a company; a
general partner; a bona fide officer of a corporation, an association, or an organized
group that represents the corporation or association; and a trustee, an administrator,
or an executor of a trust or an estate. A limited partner does not qualify; only
general partners and full-time partnership employees may represent the
partnership.

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