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RTRP STUDY CARDS
TAX - Domains 5, 6, & 7
|Can a taxpayer pay a balance due by check or money order?
|Yes. Payable to the United States Treasury with a for 1040-V completed and enclosed with the check.
|Can a TP pay a balance due by having the funds directly debited from his bank account?
|Yes. The taxpayer must provide the banks routing number and account number to enable the electronic funds transfer method. The method is secure and no fee is charged unless the taxpayer's bank imposes a fee.
|Can a taxpayer pay a balance due thru the EFTPS?
|Yes. The electronic Federal Tax Payment System allows a taxpayer who has first registered at EFTPS.gov to transfer payments from his or her bank account to the United States Treasury.
|Can a Taxpayer pay a balance due by credit card?
|Yes. Payment can be charged to a major credit card through an IRS-approved service provider. Irs does not charge a fee but the service provider likely does.
|Can the taxpayer pay a balance due with cash to the tax preparing company who then issues him a voucher as reciept of payment?
|No.Paying by cash to the tax preparing company is not one of the approved methods of payments.
|A taxpayer who does not have the funds to write a check, or transfer money using EFT or EFTPS and does not want to use a credit card to pay a balance due may do what?
|He may be able to make the payment under a short-term extension. a hardship extension, or an installment agreement.
|How long may a granted short term extension be if a taxpayer does not have the funds to pay a balance due?
|The extension granted is usually 120 days but may be as long as six months.
|What is the form a taxpayer may file if they a facing a hardship paying a balance due?
|It is for 1127, Application for Extension of Time for Payment of Tax Due To Undue Hardship
|If a person is granted a short term extension for a balance due, does he still have to pay penalties?
|This extension avoids penalties until the extended due date for payment, but interest on the unpaid taxes continue to run until payment is made.
|What fees does the taxpayer avoid by asking for a short term extension?
|Asking for a short term extension a taxpayer avoids the fee for setting up an installment agreement.
|What happens to a taxpayer who fails to make full payment thru the granted short term extension?
|The taxpay can then ask for an installment aggreement.
|What must a taxpayer do to be eligible for a hardship extension?
|The TP must show that paying the tax is more than an inconvenience and that a substantial financial loss will result if the tax owed is payed at this time.
|How much should the taxpayer send in or pay with his application for hardship extension.
|There is no cost to apply for a hardship extension, but the taxpayer must include a statement of assetss and liabilities.
|What is the penalty for a taxpayer who is granted a hardship extension for a balance due?
|No penalty will be assessed if the tax is paid within the time period provided by the extension, but interest will be charged at the federal short term rate plus 3%.
|What are the requirements for a taxpayer to obtain an automatic installment agreement for paying a balance due?
|A taxpayer who owes $25,000 or less and has filed all required tax returns to date can obtain an installment agreement automactically by submitting a request.
|How does a taxpayer submit a request for an installment agreement to pay a balance due?
|Submitting a request can be done by filing a form 9465 Installment Agreement Request, with the return or by applying on line at www.irs.gov.
|How many months does a taxpayer have to pay a balance due under the installment agreement?
|Under an installment agreement taxes are usually paid over 36 months ( 60 months in some cases).
|Can a taxpayer who owes more than $25,000 get an automatic installment on a balance due?
|Taxpayers oweing more than $25,000 must must apply using Form 9465 and must also file form 433-F Collection Information Statement. The Irs has the power to reject installment agreement requests for taxpayers owing more than $25,000.
|How much is the fee for obtaining an installment agreement?
|$52 for direct debit agreement from the TP's bank account, $105 for a standard agreement or payroll deduction and $43 if TP's income is below poverty guidelines set by the U> S> Department of Health and Human Services (DHHS).
|What is an offer in compromise?
|An affer in compromise (OIC) is an agreement between a taxpayer and the IRS that settles a tax liability for less than the full amount owed to the IRS.
|When is the IRS legally authorize to compromise a tax liability?
|The IRS is legally authorized to compromise a tax liability when there is doubt as to liability, doubt as to collectability, or effective tax administration.
|What do we mean when we speak of doubt as to liability in an OIC?
|There is doubt as to whether the taxpayer actually owes the tax. TP must submitt a detail statement explaining why the taxpayer believes he or she does not owe the tax.
|What do we mean when we speak of doubt as to collectability in an OIC?
|There is doubt as to whether the taxpayer can pay the full amount owed before the statue of limitations for collection expires.
|What do we mean when we speak of effective tax administration in an OIC?
|There is no doubt that the TP owes the tax and no doubt that the TP can pay the tax, but collection of the tax would creat an economic hardship or would be unfair or inequitable.
|What must the taxpayer do in a circumstance of effective tax administration in regards to an OIC?
|The taxpayer must submit a detail written statement explaining his or her special circumstance and why collection would creat an economic hardship or would be unfair or inequitable.
|What must a TP do in order to be considered for an OIC?
|Complete current Form 656 & Form 433-A/or 433-B, Submitt $150, submitt downpayment of 20% of OIC or 1st proposed installment req, filed all req federal tax returns, filed & be current on estimated taxes & emp taxes, no opened audit or bankruptcy cases.
|How may a TP obtain his or her tax refund?
|A check from the US Treasury, Direct deposite into eligible account(s), Application of some or all refund towards current years estimated taxes.
|What must a taxpayer do to have his refund deposited into his eligible account?
|Infclude the banks routing number and account number into the refund section of the return.
|What must the taxpayer do to his refund split between eligible accounts?
|File Form 8888 Allocation of Refun (Including Savings Bond Purchases) with the return.
|What are eligible accounts for direct deposite of tax refunds?
|Checking or Savings accounts, IRA, HSA or Archer medical account, Coverdell education savings account and Treasury Direct account, used for the purchase of Series I US Savings bonds.
|What is the limit on buying Savings bonds with a tax refund?
|The limit is $5,000
|When are refunds by check usually issued?
|Refunds by checks are usually issued within 45 days of the due date of the return
|When are refunds by direct deposite due to arrive to the taxpayer?
|Refunds thru direct deposite may arrive within 2 to 3 weeks of filing the return or even earlier.
|Can a TP recieve interest on a refund? Why or Why not?
|Yes If the refund is not issued within 45 days of the due date of the return.
|Can a taxpayer receive interest on an amended return?
|When a taxpayer recieves a refund larger than the amount owed how much interest is he or she limited to?
|If a TP recieves a refund larger than the amount owe he or she does not pay interest on the amount returned to the IRS.
|If a TP owes income taxes not paid in a prior year or past due child support, what can the federal government do with his refund?
|Keep all or part of it and apply it to offset his obligation.
|If a taxpayer owes state income taxes that were not paid in a prior year or defaults on a student loan debt, what can the government do concerning his refund?
|Keep all or part of it and apply it to offset his obligation.
|When a married person files a joint return and one spouse has taxable obligations but the other is not personally liable, what can the other spouse do to obtain his share of the refund?
|The one spouse if not personally liable for the other spuses's obligstions can make sure to obtain his or her share of ra refund by filing as an injured spouse.
|What is form 8379 and when is it used?
|Form 8379 , Injured Spouse Allocation is used to obtain the refund of a MFJ spouse with no certain outstanding obligation.
|Once Form 8379 is completed what must a taxpayer do to obtain his/her refund?
|Attach it to the return and mail it in or if filed separately, attach copies of the w2's 1099's and other relevant forms showing tax payment by injured spouse.
|If a taxpayer recieves a refund greater than the amount owed what should he do immediately with regards to the check?
|He should not cash the check, instead contact the IRS.
|True or False: A taxpayer must pay estimated taxes if he or she expects to owe at least $500 for the year after subtracting withholding and refundable tax credits.
|FALSE. A taxpayer must pay estimated taxes if he or she expects to owe at least $1,000 for the year after subtracting withholding and refundable tax credits.
|What taxes does estimated taxes include?
|Regular taxes, alternative minimum tax, self employment tax, and any tax for househould employees.
|What is the safe harbor rule with regards to estimated taxes?
|If you don’t pay the IRS enough taxes, they will charge you interest & penalties. But as long as the amt you pay the IRS this yr is as much as you paid the IRS last year, the safe harbor rule ensures that the IRS can’t charge you any penalties or interest
|When does tax law require the tax on each TP's taxable income be paid?
|Tax law requires that the tax on each TP’s taxable inc be paid at or near the time the inc is received. The TP’s tax liability for the current tax year must be paid during the course of the year through withholding or payment of estimated taxes, or both.
|What are estimated taxes?
|Estimated tax is the total amount of tax a taxpayer expects to owe for the year after subtracting nonrefundable credits, amounts to be withheld, and certain refundable credits.
|Gail Singler expects to have a 2012 tax liability of $7,000. She will have $5,000 withheld from her wages, and she will be eligible for no credits. Her estimated tax is $2,000. What is her estimated taxes?
|Her estimated tax is $2,000. [$7,000 – $5,000]
|Arlene Drake expects to have a 2012 tax liability of $8,000. $3,000 will be withheld from her wages, and she will be eligible for a child tax credit of $1,000. What is her estimated taxes?
|Her estimated tax is $4,000. [$8,000 – $3,000 withholding – $1,000 child tax credit]
|What is the form that a TP uses to file estimated taxes?
|When should Form 1040-ES be used?
|IT should be filed for 2012 if est tax is $1,000+ & it looks like total amt withheld from TP’s 2012 inc + expected credits will be less than the lesser of:• 90% of tax to be shown on TP’s 2012 return• 100% of tax shown on TP’s 2011 return (for full yr)
|Why are estimated taxes referred to as quarterly payments?
|Because they are made 4 times during the year, although not spread evenly.
|When are estimated tax payments for 2012 due ?
|April 17, 2012 - June 15th 2012 - September 17th 2012 and January 17th 2013.
|A taxpayer who underpays estimated taxes is subject to a penalty. What is the form the TP uses to figure his penalty?
|Itis figured on Form 2210, Unserpayment of Estimated Tax By Individuals, Estates and Trusts.
|What methods do we use to figure whether a penalty applies to underpayment of estimated taxes?
|The Short Method, the Regular Method, and the Annualized Method.
|When can the Short Method for Figuring underpayment of estimated taxes be used
|If the TP made no taxes or paid the same amt of taxes on each of the 4 payment due dates.
|When can the penalty for failure to make estimated payments be waived?
|If failure was due to casual, disaster or unusual circumstanceand inequitable to impose the penalty, or if the TP retired after age 62 or became disable and the ETP were req to be mad that tax yr or the 1 before and was not due to willful neglect.
|How do you request a waiver of the penalty for underpayment of estimated tax penalty?
|Check the box on for 2210
|How is interest calculated on unpaid taxes?
|Interest is COMPOUNDED DAILY and runs from the last date for making the payment to the date the amount is paid.
|Does interest stop once a TP gets an extension to file?
|No. Interest continues to apply
|Does a TP pay interest on his penalty?
|Yes, interest on penalties is due only if the penalty is not paid within 21 calendar days ( or 10 business days if notice is for $10,000 or more)from the date of notice and demand of the penalty.
|Does the IRS pay interest on overpayments of refunds?
|Yes, however no interest is payable on a tqx refund issued 45 days after the due date of the return.
|How can interest on outstanding underpayments be abated?
|Interest can be reduced or forgiven if an underpayment results from an IRS error or delay.
|How much is the is the late filing penalty.
|The failure to file penalty is usually 5% for each month or part of a month that a return is late, but not more than 25% The penality is based on the tax not paid by the due date.
|If a return is filed more than 60 days after the due date of the return, how much is the late filing or failure to file penalty?
|It is the lesser of $135 or 100% of the tax on the return.
|How much is the failure to pay penalty?
|Failure 2 pay penalty is 1/2 of 1% of unpaid taxes 4 each mo or part of a mo after due date & tax is not paid. It doesn't apply to automatic 6 mo. ext, provided 90% of tax liabilty is paid on or b/4 due date of orig ret & rest is paid when ret is filed.
|Is the failure to pay penalty rate ever increased?
|Yes, it is increased to 1 % per month for any tax that remains unpaid the day after a demand for immediate payment is issued or 10 days after a notice of intent to levy certain assets is issued.
|How much may a taxpayer be penalized on the underpayment of taxes due to certain reasons relating to accuracy?
|A TP may be penalized 20% of the underpayment due to negligence, disregard of the tax laws and regulations, or if the understatement is substantial.
|When would the understatement of taxes be considered substantial?
|The understatement of taxes would be considered substantial if it is more than the greater than 10% of the correct tax due or $5,000.
|What is the penalty of an understatement of taxes due to fraud?
|An understatement of tax due to fraud results in a penalty of 75% of the underpayment due to fraud.
|Does the fraud penalty on a joint return apply to a spouse?
|The fraud penalty on a joint return does not apply to a spouse unless some part of the underpayment is due to fraud of that spouse.
|What is a frivolous tax return?
|A frivolous tax return is one that does not include enough information to figure the correct tax or that contains information clearly showing what was reported is substantially incorrect.
|How much can a taxpayer be charged for filing a frivolous tax return?
|In ADDITION to any other penalty that may apply a TP may be subject to a penalty of $5,000 for filing a frivolous tax return or other frivolous submission.
|What is the penalty for a bounced check?
|The penalty for a bounced check is 2% of the amount of the check. However if the check is under $1250, the penalty is the amount of the check or $25, whichever is less.
|What is the final step in tax return preparation?
|It is finalizing and filing the return
|As a tax return preparer you should take steps to make sure that a return is _____________ and ___________.
|Accurrate and complete.
|As a tax return preparer you should ________ _________ entries against information provided on the TP's w-2, 1099,K-1s and other informationreturns.
|When is a paper return treated as being filed by the due date?
|Whenis is postmarked on or before the due date by the U.S, Postal Service or an IRS approved private carrier.
|When can an e-filed return be submitted in order to be considered timely filed?
|An e-filed return can be submitted up to the deadline and still be considered timely filed.
|Can an e-filed return submitted by the deadline and rejected by the IRS still be considered timely filed?
|Yes if the corrections are made & ret is e-filed again & accepted within 5 days.If the error that caused the rejection can't be resolved to allow e-filing, ret must be completed on paper with an explanation as to why & mailed to IRS within 10 days.
|TRUE OR FALSE - An individual who cannot file by the original due date of the return for aqny reason can obtain an automatic 6 month extension.
|To obtain an automatic extension for tax year 2011what form must be submitted o later than what date?
|Form 4868, Application for Automatic Extension of Time to File u.s. Individual Income Tax Return no later than April 17, 2012.
|What are the 3 ways the extension to file request can be made?
|Filing a paper for 4868, e-filing the form 4868 paying all or part of the estimates of income tax due using a credit card, debit card, or Electronic Federal Tax Payment System (EFTPS).
|How long does the IRS have to audit a return?
|The IRS generally has 3 years to audit a return, however if there is an omission of gross income of more than 25%, the IRS has 6 years to examine a return.
|TRUE OR FALSE: A tax return is not valid unless signed by the taxpayer.
|TRUE On a joint return both spouse s must sign the return.
|TRUE OR FALSE: The taxpayer and the tax preparer both bear the responsibility to the IRS for imputed information on the return and the consequences of misinformation.
|FALSE. Only the Taxpayer, not the tax preparer bears the responsibility.
|Taxpayers can grant authority to tax return preparers to give the IRS any missing information on the return and call the IRS about processing of the return and the status of a refund or payment - TRUE OR FALSE
|Taxpayers can indicate on the return if the tax preparer can recieve copies of notices related to the return and respond to IRS notices about math errors, offsets and return preparation. TRUE OR FALSE
|How does a taxpayer give permission for the preparer to speak to the IRS for the TP regarding certain issues?
|By checking the "YES" box to make the preparer the 3rd party designee.
|How long doe the authority to be the 3rd party Designee last once the TP has checked the correct box?
|It last until the due date of the following year's return. For ex. for 2011 it would last until April 15, 2013.
|Does designating a Tax preparer to speak to the IRS in certain circumstances also allow him/her to recieve a refund check or represent the TP before the IRS?
|TRUE OR FALSE: Tax Return Preparers must sign the tax return under penalty of perjury with either their PTIN #, or their SSN or their Driver;s license number.
|FALSE. Under penalty of perjury they must sign the return with their PTIN and signature.
|Who should sign a deceased TP's return?
|A personal representative if one has been appointed if not the surviving spouse if not the person who is in charged of the deceased TP's property. The word deceased and the date of death should be written across the top of the return.
|Who should sign a minor child's return?
|The parent should sign the child's name in the space provided for the TP and then enter "By (parents signature) parent for minor child.
|Who can sign an incapacitated spouse's return?
|A spouse can sign on behalf of an incapacitated spouse if the ill spouse so requests and attache a statement to the return explaining why.
|Can the spouse of a person serving in the military sig the return for both?
|The spouse of a person SERVING IN A COMBAT ZONE OR QUALIFIED HAZARDOUS DUTY AREA can sig a JOINT return on behalf of his or her spouse. Attach a statement to the return explaining taht the military spouse is serving in a combat zone.
|What does married couples filing jointly agreeing to?
|They are agreeing to share joint and several liability for the return. Each spouse alone is responsible for entire amount of taxes, interest and penalities if any on the return.
|How may a spouse may be relieved of joint and several liability?
|By requesting innocent spouse relief.
|How many types of innocent spouse relief are there?
|What is basic innocent spouse relief?
|If the innocent did not know or have reason to know of an understatement of tax on a joint return and based on facts and circumstances it would be unfair to hold the innocent spouse liable for the tax.
|What is separation of liability relief in regards to innocent spouse?
|A spouse who is legally separated or no longer married can obtain relief for the understatement of taxes attributable to the other spouse.
|What is equitable relief in regards to innocent spouse?
|If basic innocent spouse relief or separation of liability relief does not apply to the innocent spouse that spouse can get relief from and understatement of taxes or an unpaid tax where the circumstance support relief.
|What Form must a spouse who believes he or she is eligible for innocent spouse relief file?
|Form 8857, Request for Innocent Spouse Relief.
|In 2012 should a tax return preparer e-file tax retrns even if they file less than 20 returns?
|In 2012 tax preparers MUST e-file returns if they anticipate preparing 11 or more returns. If they work in a firm that prepares more than 11 returns and they themselves did not, they must e-file all.
|What are the benefits of e-filing returns?
|Faster refund, more accurate returns, and secure transmission.
|What should a tax return preparer do if a TP does not want to e-file?
|They should complete form 8948, attach it to the return and give it to the TP who has opt out of e-file to mail.
|Which returns are ineligiblefor e-filing?
|Returns on which adoption credit is claimed, because of the additional documentation, also returns of non resident aliens, amended returns, returns filed after the extension due date, returns for proor years, returns that are not for calendar year TP's.
|Sometimes a return can be e-filed even though the TP is required to maile in on or more forms or supporting documenting. Name the forms in which this situation can occur.
|Form 8332. Release/Revocation of Release of claim to Exemption for child by Custodial Parent and Form 8283 Noncash Charitable Contributions, Section A-Donated Property of $5,000or les and Section B- Donated Property of $5,000 or more.
|What purpose does the Self Select Pin or the Practioner PIn serve when e-filing the TP;s return?
|It serves as his signature
|What is the PIN?
|It is a combination of 5 digits (other than all zeros) chosen by the taxpayer or generated by the tax return preparer
|What is Form 8879?
|It is the declaration and signature document when a tax return is filed by ERO (electronic Return Originator and the TP is using the Practitioner PIN Method or is authorizing an ERO to generate the TP's Pin.
|Does the IRS recieve a copy of the Form 8879?
|NO, the form is not files with the IRs.
|How long should the completed Form 8879 and 8878 be kept?
|Three (3) years from the later of the return due date or the date the IRS received the reurn
|How long do you have to inform a TP that his return was rejected?
|You have 24 h and you must disclose the reason for the rejection.
|To be considered timely how long do you have to re-submitt a reject return ti be accepted by the IRS?
|How long does the TP have to file a return that has been rejected bythe IRS if he/she chooses not to e-file?
|To be considered timely the paper return must be mailed in within 10 days of an e-file rejection. Also an explanation must be attached to the return as to why it is being filed after the due date and form 8948
|Tax preparers may be issued warnings or sanctions for failur to comply with e-filing regulations. What is a level one infraction?
|A written reprimand for infractions having no adverse impact on the quality of e-filed returns.
|Tax preparers may be issued warnings or sanctions for failur to comply with e-filing regulations. What is a level two infraction?
|Suspensions. For infractions taht have an adverse impact on the quality of e-filed returns the IRS may restrict a provider participation in e-file for 1 year from the effective date of sanction.
|Tax preparers may be issued warnings or sanctions for failur to comply with e-filing regulations. What is a level three infraction?
|Infractions that have a significant adverse impact on the quality of e-filed ret's, IRS may suspend preparer for 2 yrs or depending on the severity of infraction expel preparer permanently from e-file.May occur if infraction is fraud or criminal content.
|The TP can autorize an AGENT to speak on his behalf for certain matters with the IRS. What are the 3 types of authorization?
|Limited authorization as a third party designee, Tax Informatio authorization, and Power of attorney and declaration of representation.
|What does Limited Authorization as a 3rd party designee allow an agent to do?
|Provide missing info to the IRS, Call the IRS about the status of a return or processing a return, recieve copies of notices and transcripts and respond to the Irs abot math errors, offsets, and tax return prep.
|What does tax information authorization allow an agent to do?
|Give the agent the authority to recieve confidential info from the IRS on behalf of the TP.
|What does Power of Authority and Declaration of Representation allow an agent to do?
|It is the broadest type of authority to act for the TP. It allows the agent to have the power to do most actions that a TP would do by him or her self, like sign any agreements, consents or other documents.
|What is the purpose of for 8821?
|It is to enable a preparer to inspect and or recieve a TP's confidential info for the type of tax and the years or periods listed on the form.
|Does Form 8821 authorize a preparer to advocate for a TP position or represent the TP before the IRS?
|TRUE OR FALSE: The irs will reject all form 8821 that contain genera; designations like "all years", "all periods" or "all taxes"
|How can a TP revoke authorization of a previous form 8821?
|By sending a copy of a previous for 8821 and writing across the top the word "REVOKED" or writing a statement indicating the authority of the previous appointee is revoked if TP has no previous copy.
|What is for 2848?
|The Power of attorney and declaration of Representative form.
|When an agent under a POA is an unenrolled tax return preparer (not an enrolled agent, attorney or CPA)what actions are he or she limited to as regarding representation on the TP?
|They are limited to representation of the TP before a CUSTOMER SERVICE REP, REVENUE AGENTS, AND EXAMINATION OFFICER.
|Can an unenrolled agent represent a TP before other offices of the IRS such as Collection of Appeals including the Automated Collection System?
|Can an unenrolled agent execute closing agreements?
|Can a Tax return preparer or an unenrolled agent extend the statutory period fro tax assessments or collection of tax?
|Can a Tax return preparer or an unenrolled agent execute waivers?
|Can a Tax return preparer or an unenrolled agent execute claims for refunds?
|Can a Tax return preparer or an unenrolled agent receive refund checks?
|How can a TP obtain a copy a previous filed tax return for the IRS?
|send in a For 4506, Request for Copy of Tax Return and $57 per copy.
|How long is a copy of an old return available for purchase?
|Generally copie of old tax returns are available for 7 years from filing.
|What is the fee for a transcript of a tax return?
|It is available free of charge.
|How long are transcripts available to the TP?
|Up to 3 years.
|Violation of TP's confidentiality can result in civil and criminal penalities. What are they?
|Civil - disclosing or using TP's info illegally from $250 per disclosure up to a max of $10,000. Criminal charges - knowingly or recklessly disclosing TP info or using for any illegaly purpose is a misdemeanor punishable by fine up to $10,000 R 1 yr jail
|What could the fine be if a tax preparer prepares a return and understates a TP liability due to unreasonable position
|If a tax preparer prepares a return and understates a TP liability due to unreasonable position he/she may be fined the GREATER of $1,000 or 50% of the income derived by the preparer.
|What could a preparer be charged If a tax preparer prepares a return and understates a TP liability was willful and reckless and intentional conduct?
|If a tax preparer prepares a return and understates a TP liability due to unreasonable position he/she may be fined the GREATER of $5,000 or 50% of the income derived by the Tax return preparer.
|Under sect 6695 if a tax preparer fails to furnish a completed copy of the return at the time of signing how much can he/she be fined?
|He/she can be fined $50 per failure up to a max of $25,000 per calendar year.
|If a tax retur preparer fails to sign a return, how much can he/she be fined?
|The penalty is $50 per failure up to $25,000 per calendar year.
|If a tax return preparer fails to sign his/her PTIN number how much can he/she be fined?
|tHE PENALTY IS $50 PER FAILURE UP TO A MAX OF $25,000 PER CALENDAR YEAR.
|How much is the fine if a tax return preparer fails to retain a copy or list of TP's names and ID numbers or failure to make a copy or list available to the IRS upon request?
|The penalty is $50 per failure up to a max of $25,000 per calendar year.
|What is the penalty for the preparer if the tax preparer fails to file correct information returns?
|The penalty is $50 per failure up to a max of $25,000 per calendar year.
|What is the fine if a tax return preparer negotiates (cashing or depositing in a preparer's account ) a TP's refund check?
|The penalty is $500 per check.
|What is the penalty for failure to due due diligence in determining aTP's eligibility for the EITC.
|The penality is $500 per failure beginning with returns required to be filed after 2011. For returns rewuired to be filed before January 1, 2012 the penality is $100 per failure.
|What are the 4 EITC due diligence requirements a preparer must meet when preparing EITC returns?
|Completion and submission of form 8867, Paid Preparer Earned Income Credit Checklist, Computtation of the credit, Knowledge, Record Retention.
|To satisfy the knowledge what must the preparer do?
|Must not know or have reason to know that info supplied is incorrect, may not ignore the implications of info furnished to or known by preparer, and must make reasonable inquires if info furnished appears to be incorrect, inconsistant or incomplete.
|A tax preparer who aids and abets in the understatement of a tax liability may be subject to what penality?
|$1,000n per document ($10,000 if corporation)
|What are the two organizations within the IRS which help to regulate and oversee the conduct of practice before the IRS?
|The Office of Professional Responsibility (OPR) and the Return Preparer Office (RPO)
|What are the 6 categories of professionals who can practice before the IRS?
|1. Attorneys, 2. CPS's. 3 EA's 4 RTRP's 5 Enrolled Actuariers 6 Enrolled Retirement Plan Agents.
|What 2 groups have limited practice before the IRS?
|Supervised preparers and Non Form 1040 Series preparers.
|Others are permitted to represent themselves b/4 the IRS and ar not req to have authorization. they can also represent family members. Who are they?
|Student attorneys, student CPS's Corporate officers, Partners, a full time employee, a fiduciary, any other person who obtains authorization from the Office pf Professional Responsibility