A taxpayer timely receives a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. The taxpayer wants an independent review before levy action and wants to preserve the right to seek Tax Court review of the determination. What should the representative generally do?
A. Request an equivalent hearing after the CDP deadline expires
B. Use the Collection Appeals Program instead of requesting CDP review
C. Propose an installment agreement without requesting the offered hearing
D. Timely file Form 12153 by the deadline stated in the notice
Show answer and reasoning
Correct answer: D. Timely file Form 12153 by the deadline stated in the notice
A timely Form 12153 requests a Collection Due Process hearing after the specified lien or levy notice. Timeliness matters because a CDP determination generally carries judicial-review rights that an equivalent hearing does not provide in the same manner.
- A: An equivalent hearing requested after the deadline generally does not provide the same judicial-review rights as a timely CDP hearing.
- B: The Collection Appeals Program is a different administrative remedy and does not substitute for the timely CDP request that preserves review of the determination.
- C: A collection alternative may be proposed within a CDP hearing, but proposing one alone does not invoke the offered hearing or preserve review rights.
Source: PRIMARY -- Publication 1660, sections 'Collection Due Process (CDP) Hearing' and 'How do you request a CDP or equivalent hearing?' (https://www.irs.gov/pub/irs-pdf/p1660.pdf)
A taxpayer wants an enrolled agent to argue the taxpayer's position in an IRS examination and receive confidential tax information for that matter. Which authorization is generally appropriate?
A. Form 8821 naming the agent for the same matters and periods
B. Form 2848 covering the agent, tax matters, and periods
C. A written information request signed only by the enrolled agent
D. Form 56 identifying the enrolled agent as the taxpayer's fiduciary
Show answer and reasoning
Correct answer: B. Form 2848 covering the agent, tax matters, and periods
Form 2848 authorizes an eligible individual to represent the taxpayer before the IRS for specified matters and periods and generally permits receipt or inspection of the relevant confidential information. Form 8821 permits information access but not advocacy as the taxpayer's representative.
- A: Form 8821 can authorize access to tax information for specified matters and periods, but it does not authorize advocacy before the IRS.
- C: A request signed only by the agent does not establish the taxpayer's power-of-attorney authorization.
- D: Form 56 reports an actual fiduciary relationship; it is not the ordinary appointment form for an enrolled agent.
Source: PRIMARY -- Instructions for Form 2848, sections 'Purpose of Form' and 'Authority Granted' (https://www.irs.gov/instructions/i2848)
An electronic return originator receives an IRS rejection of an individual return because a correctable taxpayer-identification entry does not match IRS records. The filing deadline has not passed and the taxpayer promptly supplies verified corrected information. What should the ERO generally do?
A. Correct and timely retransmit with the taxpayer's authorization
B. Treat the original transmission date as proof that filing is complete
C. Submit the same rejected data again without investigating the mismatch
D. Convert the return to paper without obtaining the taxpayer's approval
Show answer and reasoning
Correct answer: A. Correct and timely retransmit with the taxpayer's authorization
An ERO should inform the taxpayer of a rejected return, correct an identified correctable condition using verified information, obtain any required authorization, and retransmit promptly. Acceptance must never be obtained by altering unrelated substantive return data.
- B: A rejected transmission does not constitute an accepted filing merely because it was sent before the deadline.
- C: Retransmitting unchanged data does not correct the identified reject condition and may delay a valid filing.
- D: A paper-filing alternative still requires an accurate return and the taxpayer's proper authorization or signature.
Source: PRIMARY -- Publication 1345, section 'Acknowledgements of Transmitted Return Data' and subsection addressing rejected electronic returns (https://www.irs.gov/pub/irs-pdf/p1345.pdf)
A taxpayer executes Form 2848 appointing an enrolled agent for an examination. The taxpayer then asks the agent to sign the taxpayer's income-tax return merely because the taxpayer is traveling. No regulatory exception or specific signature authorization applies. What should the agent conclude?
A. The existing examination appointment also authorizes return signing
B. The agent may not sign the return on these facts without a qualifying regulatory exception
C. The agent may sign after documenting the taxpayer's travel schedule
D. The agent may sign if the taxpayer separately authorizes information disclosure
Show answer and reasoning
Correct answer: B. The agent may not sign the return on these facts without a qualifying regulatory exception
A power of attorney does not provide unrestricted authority to sign an income-tax return. Form 2848 instructions limit representative signature authority to circumstances allowed by the governing regulations and require the appropriate express authorization.
- A: An examination appointment does not automatically supply the separate authority and qualifying circumstances required for return signing.
- C: Travel by itself is not one of the circumstances that confers representative signature authority.
- D: Information-disclosure authority permits access to tax information but does not authorize signing the return.
Source: PRIMARY -- Instructions for Form 2848, section 'Authority Granted' and subsection 'Signing a tax return' (https://www.irs.gov/instructions/i2848)
Two former business partners ask one enrolled agent to represent both of them in an IRS examination. Their positions may become directly adverse, but the agent reasonably believes competent and diligent representation of each remains possible and representation is not prohibited by law. What additional step is required before accepting the conflict?
A. Obtain informed written consent from each affected client
B. Disclose the conflict only to the revenue agent assigned to the examination
C. Obtain oral consent from both clients and document it only if a dispute arises
D. Use separate powers of attorney without addressing the adverse interests
Show answer and reasoning
Correct answer: A. Obtain informed written consent from each affected client
Circular 230 permits representation despite a conflict only when the practitioner reasonably believes competent and diligent representation is possible, the representation is lawful, and each affected client gives informed written consent. The practitioner must retain and, when requested, provide those consents under the rule.
- B: The IRS employee does not replace the affected clients as the person whose informed consent is required.
- C: Consent must come from each affected client and must be confirmed in writing; payment size is irrelevant.
- D: Information authorizations do not resolve a professional conflict or authorize representation.
Source: PRIMARY -- 31 CFR 10.29(a)–(b), conflict conditions, informed written consent, retention, and production requirements (https://www.ecfr.gov/current/title-31/subtitle-A/part-10/section-10.29)
