IRS Enrolled Agent Part 3 Practice Test

Answer choices

1. A. Diagnose the reject, verify the identifying information with the taxpayer and source documents, correct the return if appropriate, and retransmit within the permitted filing path/timeframe.
2. B. File an amended return immediately.
3. C. Ignore the reject because the original transmission was timely.
4. D. Ask the IRS to waive the mismatch without verification.

Wrong-answer review

• B. File an amended return immediately.: Incorrect. This option does not apply the controlling rule tested here. The governing source is Publication 1345: Authorized IRS e-file Providers of Individual Income Tax Returns, Rejected returns; correction and retransmission.
• C. Ignore the reject because the original transmission was timely.: Incorrect. This option does not apply the controlling rule tested here. The governing source is Publication 1345: Authorized IRS e-file Providers of Individual Income Tax Returns, Rejected returns; correction and retransmission.
• D. Ask the IRS to waive the mismatch without verification.: Incorrect. This option does not apply the controlling rule tested here. The governing source is Publication 1345: Authorized IRS e-file Providers of Individual Income Tax Returns, Rejected returns; correction and retransmission.

Answer choices

1. A. IRS e-file authorization can never be suspended once issued.
2. B. Only a federal court may restrict participation in IRS e-file.
3. C. The provider avoids sanctions if all returns were mathematically correct.
4. D. The IRS may monitor and sanction providers for noncompliance, with consequences depending on the severity of the violations.

Answer choices

1. A. The software vendor becomes the signing preparer automatically.
2. B. The preparer may ignore warnings generated by the software.
3. C. Using a vendor does not transfer the preparer's own responsibility to review the return and comply with IRS e-file rules.
4. D. IRS sanctions apply only to the vendor.

Answer choices

1. A. Whether both clients agree to pay equal fees.
2. B. Whether the IRS examiner prefers one representative.
3. C. Whether Form 8821 can replace the conflict analysis.
4. D. Whether a Circular 230 conflict exists and, if so, whether the conflict is consentable and all §10.29 requirements can be satisfied.

Answer choices

1. A. Assume the full 72-hour requirement always applies regardless of the enrollment date.
2. B. Complete no CE until the second renewal cycle.
3. C. Use only the annual PTIN renewal as the CE requirement.
4. D. Use the special new-enrollee rules based on months enrolled and the ethics requirement for each enrollment year.

Answer choices

1. A. File Form 1040-X automatically.
2. B. Tell the client any paid tax is refundable for 10 years.
3. C. Use Form 2848 to create a new refund period.
4. D. Review the procedural posture, any closing or waiver documents, the substantive basis, and the refund statute before advising the client.

Answer choices

1. A. Only the taxpayer's name and the representative's phone number
2. B. A complete financial statement and credit report
3. C. The taxpayer, representative, tax matter(s), and applicable period(s), together with required signatures/declarations
4. D. The taxpayer's preferred settlement amount

Answer choices

1. A. Yes. Any paid preparer may represent any taxpayer in any IRS matter.
2. B. Yes, if the preparer has a PTIN.
3. C. No one other than an attorney may represent a taxpayer.
4. D. No. Representation rights depend on the preparer's status and the applicable limited-practice rules.

Answer choices

1. A. The taxpayer must first pay half of the liability.
2. B. The taxpayer must waive all appeal rights.
3. C. The taxpayer must have a federal tax lien filed.
4. D. All legally required returns must be filed and required current estimated tax payments and applicable federal tax deposits must be made.

Answer choices

1. A. Send every receipt to the IRS without review.
2. B. File a Tax Court petition immediately.
3. C. Organize the records by disputed issue, verify that they substantiate the claimed expenses, and identify gaps before responding.
4. D. Ask the IRS to estimate the deductible amount.