IRS Regulations and Circular 230

Circular 230 Scope

• Circular 230 governs the practice of attorneys, CPAs, and enrolled agents before the IRS.

Private Letter Ruling Request Form

• Form 2848 is the IRS form used to request a Private Letter Ruling.

IRS Revenue Procedure Purpose

• The primary purpose of an IRS Revenue Procedure is to provide procedural guidance for IRS employees and taxpayers.

Limited Practice Rights

• Representing a taxpayer at Appeals conferences is not a situation where limited practice rights are granted to unenrolled preparers.

Practice Before IRS

• An enrolled agent can practice before the IRS without limitations.

Annual Filing Season Program

• The Annual Filing Season Program is a voluntary program that allows unenrolled preparers to obtain limited representation rights.

Special Enrollment Examination

• The Special Enrollment Examination for individuals seeking to become enrolled agents is administered by Prometric.

Enrolled Agent Suspension Time

• Under Circular 230, there is no maximum time period for which an enrolled agent can be suspended from practice before the IRS.

Practice Before IRS (Not Considered)

• Preparing a tax return is NOT generally considered practice before the IRS.

Enrolled Agent Enrollment Renewal

• An enrolled agent must renew their enrollment status with the IRS every 3 years.

Maintaining Enrolled Agent Status

• Being a U.S. citizen is not a requirement for maintaining enrollment as an enrolled agent.

IRS Tax Assessment Period

• The general period within which the IRS must assess additional tax is 3 years from the date the return was filed.

Collection Statute Expiration Date (CSED)

• The typical collection statute expiration date (CSED) for unpaid taxes is 10 years after assessment.

Statute of Limitations Extension

• Filing an amended return would NOT extend the statute of limitations for assessment.

Claim for Credit or Refund Timeframe

• A taxpayer must typically file a claim for credit or refund within 3 years from the date the return was filed or 2 years from when the tax was paid, whichever is later.

IRS Division for Individual Tax Returns

• The IRS division that primarily handles examinations of individual tax returns is the Small Business/Self-Employed Division.

Installment Agreement Period

• The maximum period of time for which an installment agreement can typically be approved is 72 months.

Offer in Compromise Evaluation

• The reason for the tax liability is NOT a factor considered by the IRS when evaluating an offer in compromise based on doubt as to collectibility.

IRS Notice of Deficiency Response Time

• The typical timeframe for responding to an IRS notice of deficiency is 90 days.

Basis for Offer in Compromise

• Doubt as to procedural accuracy is NOT generally a valid basis for an offer in compromise.

Offer in Compromise Form

• Form 656 is used to file an offer in compromise with the IRS.

Collection Due Process (CDP) Hearing Purpose

• The primary purpose of a Collection Due Process (CDP) hearing is to determine if the IRS followed proper procedures in filing a notice of lien or intent to levy.

Reasons for Penalty Abatement

• Financial hardship is NOT a reason the IRS might abate penalties.

Significance of Last Day to Respond Date

• The significance of the Last Day to Respond date on an IRS notice is it's the date by which the taxpayer must respond to avoid further collection action.

Collection Due Process Hearing Form

• Form 12153 is used to request a Collection Due Process hearing.

Reasonable Cause for Penalty Abatement

• Inability to pay the tax would NOT typically qualify as reasonable cause for penalty abatement.

Taxpayer Disagreement with IRS Examiner

• The initial step a taxpayer should take if they disagree with an IRS examiner's findings is to request a meeting with the examiner's manager.

Innocent Spouse Relief Situations

• The IRS would NOT generally grant innocent spouse relief if the requesting spouse significantly benefited from the understatement.

Statutory Notice of Deficiency

• A Statutory Notice of Deficiency is a formal notice that gives the taxpayer 90 days to petition the Tax Court.

Actions That Stop Collection Process

• Filing an amended return would NOT stop the collection process.

Offer in Compromise Minimum Payment

• The minimum payment required with the submission of an offer in compromise is 20% of the offered amount for a lump sum offer.

Collection Information Statement Purpose

• The purpose of the Collection Information Statement (Form 433-A) is to provide financial information for collection alternatives.

IRS Suspension of Collection Activities

• The typical time period for which the IRS will suspend collection activities after accepting an offer in compromise for processing is 90 days.

Partial vs Regular Installment Agreement

• A partial payment agreement may result in some tax liability not being paid before the collection statute expires.

Currently Not Collectible Status Criteria

• The tax liability is less than $10,000 is not a criterion for currently not collectible (CNC) status.

IRS Hardship Extension

• The primary consideration for the IRS in granting a hardship extension to pay tax is taxpayer would suffer undue financial hardship if forced to pay on time.

IRS Delay Collection due to Hardship

• The maximum period for which the IRS can delay collection due to financial hardship is until the hardship ceases.

Tax Court Petition

• A taxpayer would petition the U.S. Tax Court if they received a notice of deficiency and wanted judicial review without paying the tax first.

Collection Appeals Program (CAP) Purpose

• The purpose of a Collection Appeals Program (CAP) is to review the appropriateness of collection actions.

Benefit of Doubt as to Liability

• Collection is suspended while the offer is being considered is NOT a benefit of submitting a doubt as to liability offer in compromise.

Tax Return Preparer Form

• Form 8867 must be filed annually by a tax return preparer who prepares or reasonably expects to prepare 11 or more returns in a calendar year.

The Trust Fund Recovery Penalty (TFRP)

• To hold responsible persons personally liable for unpaid employment taxes.

Jeopardy Assessment

• To quickly assess tax when collection is in jeopardy.

IRS Considerations -Installment Agreement

• The taxpayer's political affiliations is NOT a factor the IRS considers when determining whether to accept an installment agreement.

Taxpayer Assistance Order (TAO)

• An order directing the IRS to stop an action or take an action to relieve taxpayer hardship.

The IRS Office of Appeals

• To resolve tax disputes without litigation.

Basis For Audit Reconsideration

• The taxpayer disagrees with the tax law itself.

Abatement Of Penalties Form

• Form 843

Streamline Installment Agreement

• No income limit

Automatic Collection System (ACS)

• To handle routine collection cases through telephone contact

Federal Tax Lien

• Property exempt under state law from creditor claims

Substitute For Return

• A return prepared by the IRS when a taxpayer fails to file

Filing Notice of Federal Tax Lien (NFTL)

• After sending at least one notice and demand for payment

CDP Notice

• To inform taxpayers of their right to a hearing before levy action

Trust Fund Recovery Penalty

• Being the highest-paid employee

Requesting A Collection Due Process

• 30 days from the date of the notice

What legal standard must the IRS meet to prove civil fraud Clear and convincing evidence

• Clear and convincing evidence

Collection Due Process Hearing

• Challenging the amount of tax owed

Manual Refund?

• When correcting an error or expediting a refund

Outline Fundamental

• To outline fundamental rights taxpayers have when dealing with the IRS

Authorize An Individual

• Form 2848

Form 2848 and Form 8821

• Form 2848 authorizes representation, while Form 8821 only authorizes information disclosure

Represent Taxpayers

• Enrolled agents

Form 2848

• Taxpayer and representative signatures

Power of Attorney

• Filing a new power of attorney for the same matter

Representation Rights"

• The right to represent clients in all matters before the IRS

Valid Form 2848

• Bind the taxpayer to a legal position

Specify The Matters

• All of the above

Substitute Another Representative

• Only with specific authorization on the form

Concept of Circular 230

• All of the Above

To Discipline Practitioners

• The Office of Professional Responsibility

Practice Activities

• Preparing a tax return

Regulations In Circular 230

• A bookkeeper who only prepares financial statements

Written Advice Under Circular 230

• Practitioners must use due diligence

Practitioner Must Respond

• 30 Days

Duty Of A Practitioner

• Guaranteeing specific tax outcomes

Action Must a Practitioner Take

• Advise the client of the error and potential consequences

Conflict of Interest

• Representing a business and its owner for the business's tax return

Resolve A Conflict Of Interest

• Obtain written informed consent from all affected clients

Primary Purpose Of the Office of OPR

• To enforce the regulations governing practice before the IRS

Actionable Act Under Circular 230

• Giving a client a conservative estimate of potential tax savings

Violation of Circular 230

• Compliant process with due rights

Receive an Expedited Suspension

• or Loss of A Profession

Limited Practiced Agreements

• To settle disciplinary proceedings with specific restrictions on practice

Enrolled Agents

• 72 hours including ethics hours

Take Continuing Education

• Ensure competence in the matter

Inappropriate Contingent Fee

• Fees for preparing an arrangement

Types of Written Advice

• Newsletters doesn't subject 230 standards

Practitioner Reveal

• When Required by Law

Primary Purpose of Season

• Give limit representation Rights

Power of Attorney

• When Valid Form

IRS Function (Spouse)

• Cincinnati

Time Limit

• Within two year of first collection activity

Spouse Relief

• Separation

Differences Spouse Relief

• Joint Return

Request A Innocent Spouse form

• Form 8857

Primary Factor Considered

• Spouses Suffers

Tax Issues

• Trust Fund

TimeFrame IRS

• Six months

Suspended Activities

• Collection is Suspended

Against Equitable Spouse Relief

• Comply tax laws since year in question

Applied to

Injured Spouse Relief

Best Describes Audit

Informal process to review audit results after assessment

Request An Reconsideration?

• Sufficient

Valid Reason Reconsideration?

• Taxpayer disagrees

(CAP) Hearing?

An administrative Appeal

Through the Appeals Program

• Filing for

CAP Appeal

• CDP provide Rights

to Program Heading?

• Submit Appeals

For Completing Heading

• 5 business days

best Describe

• resolve issues

What circumstance

• Hardships, failed

Request Assistance

• Form 911

Resolve Cases?

• action with theIRS

Fast track

• Quick resolution

Division

• Office of Appeals

Advantages

• Appeal

Due Process Hearing

• 30 days

Issues In CDP

• All of the above

The IRS

• Notice of Determinations

Agreement is rejected

• U.S. Tax Court

The Used

• abuse of discretion for collection issues

For the Hearing

• Both A and B

describes CDP hearing

• The only issue is Frivolous

A Closing Agreement

• Issues for specific periods

Disclosure Is Current

• Prosecution

Current IRS Voluntary

Criminal protection

###Element A Valid

• Timeliness

what is Summon

About A class of taxpayers

is Required and Issuing Summon

• U.S. District approval

To Represent Before The IRS

• Forms 2848

requirement for valid

• Notarization

The Corporation

• authority to sign

Represents

• Circulation

###For the Same

• All same matter

How can taxpayer Revoke

• Both And B

Primary 8821

• Recieve tax information

Can Be Performed

• Recievning inspect

Existing Forms 2848

• Does not effect

###Information Tax Matter Cover All Of The Above

For Third-Party

• Processing

A Third party Authorization

• One Year

###Would Appropriate

• Authorizing to represent the taxpayers

authorized

• Organization

2848 Valid?

Automatically terminated

Automatic

• Death of the taxpayer

###Form Do Grant Representatives

• Recieving refund checks

The Form

• Unique

Leaves Their Firm

• The Firmed remains

To Included the"Authorization Authorized"

• Authority Receive checks

Best Describe Department

• Regards governing the IRS

Enforce Circular

• Responsibility

Not Subject 230 Regulation

• bookkeepers

Would Violate Circular 230

• Knowingly false information

Duty A Practitioner

• Exercise Due Diligence

Practitioner do Upon Client Discovering

• Counsel with clients for non-compliance

Standard Be Met A practitioner Recommend

• Reassemble basis

A Requirement Under Writing Circular 230

  - Specific Disclaimers

contingent Fees Permitted

• For judicial preceeding

A type of relationship client

• Financial Outcome interest

A Conflicts to Exist Must

• Written full disclosure

A Practitioners maintains Regarding The matters

• Returns

Representation maintains records

SevenYears

the best The Circular

guidelines

Disreputable under Circular

• Ruling

Explore IRS Circular 230 regulations, covering attorneys, CPAs, and enrolled agents. Understand Private Letter Ruling requests using Form 2848 and the purpose of IRS Revenue Procedures. Learn about practice rights and the Annual Filing Season Program.