IRS Representation
Part 3 · 114 study cards · Active recall format
Q1.When may the burden of proof shift to IRS under section 7491?
Exam wording
taxpayer introduces credible evidence on a factual issue taxpayer satisfies substantiation and recordkeeping requirements taxpayer cooperates with reasonable IRS requests qualifying taxpayer meets applicable net-worth limitations special rules apply to penalties and statistical information
Q2.What is the role of Form 8879 in an individual e-file submission?
Exam wording
taxpayer authorizes electronic filing after reviewing the return taxpayer and ERO complete the declaration before transmission ERO retains the form rather than sending it with the return unless IRS requests it PIN information must be handled under Publication 1345
Q3.Where is the authoritative distribution source for official IRS tax guidance such as revenue rulings, revenue procedures, notices, and announcements?
Exam wording
The Internal Revenue Bulletin. The Internal Revenue Bulletin is the authoritative distribution source for official IRS tax guidance.
Q4.A practitioner wants the authoritative published source for a newly issued IRS revenue procedure. Which source should the practitioner consult?
Exam wording
The Internal Revenue Bulletin. Official IRS guidance, including revenue procedures, is authoritatively distributed through the Internal Revenue Bulletin.
Q5.Maya is named only on Form 8821. May she advocate the taxpayer's legal position before the IRS?
Exam wording
No; Form 8821 does not authorize advocacy or representation. Form 8821 does not authorize a designee to advocate or represent the taxpayer.
Q6.Which form should generally be used to authorize a qualified individual to represent a taxpayer before the IRS?
Exam wording
Form 2848. The Form 8821 instructions direct taxpayers to use Form 2848 to authorize representation before the IRS.
Q7.A taxpayer in the United States receives a statutory notice of deficiency. How long does the taxpayer generally have from the notice date to petition the Tax Court?
Exam wording
90 days. Publication 556 states the general Tax Court petition period is 90 days, or 150 days when the notice is addressed outside the United States.
Q8.A statutory notice of deficiency is addressed to a taxpayer outside the United States. What petition period does Publication 556 state?
Exam wording
150 days. Publication 556 states a 150-day period when the notice is addressed outside the United States.
Q9.What is the stated mission of the IRS Independent Office of Appeals?
Exam wording
Resolve federal tax controversies without litigation on a fair and impartial basis.
Q10.A taxpayer disagrees with proposed IRS examination changes and wants administrative review without immediately litigating. Which forum fits Publication 5's mission?
Exam wording
The IRS Independent Office of Appeals. Publication 5 identifies the Independent Office of Appeals as the administrative forum for resolving tax controversies without litigation.
Q11.An individual e-filed return was timely transmitted but rejected. By when must the corrected electronic return generally be resubmitted to retain timely-filed treatment?
Exam wording
By the fifth calendar day after the return due date.
Q12.A rejected individual return was submitted on the due date. The corrected return is accepted four calendar days after that due date. How is it generally treated under Publication 1345?
Exam wording
Timely filed. Resubmission by the fifth calendar day after the due date preserves timely-filed treatment.
Q13.What does the FTC Safeguards Rule require professional tax return preparers to create and enact?
Exam wording
Security plans to protect client data. Publication 4557 states that tax return preparers must create and enact security plans to protect client data.
Q14.A tax practice stores taxpayer data but has no written information security plan. Which corrective action aligns with Publication 4557?
Exam wording
Create and implement a security plan protecting client data. Publication 4557 explains the legal duty to create and enact a client-data security plan.
Q15.What should a representative verify about signature authority (e.g., extension of assessment period, closing agreement)?
Exam wording
Form 2848 does not automatically authorize every high-consequence act; signing returns and specified acts require the form's express rules.
Q16.Give the practical federal-tax rule for proper completion of power of attorney (Form 2848).
Exam wording
Form 2848 must identify the taxpayer, representative, tax matters, and periods with the specificity required by its instructions.
Q17.What is the key limitation involving alternate forms of power of attorney (durable)?
Exam wording
A non-IRS durable or general power of attorney must contain the required information and declaration before IRS representation is recognized.
Q18.How should a practitioner handle rules for client privacy and consent to disclose?
Exam wording
A representative's access to confidential tax information depends on taxpayer authorization and the disclosure rules.
Q19.What official rule governs requirements to be met when changing or dropping representatives or withdrawal of representative?
Exam wording
A taxpayer revokes, or a representative withdraws from, an authorization by following the Form 2848 instructions, including the required notation and signature.
Q20.Summarize the correct treatment of purpose of a Centralized Authorization File (CAF) number.
Exam wording
A CAF number is the IRS identifier for a representative's authorization records; it is not the representative's PTIN.
Q21.What common mistake should be avoided with conference and practice requirements (Publication 216)?
Exam wording
A recognized representative must be eligible to practice and properly authorized for the conference or matter.
Q22.How does current authority treat identification of tax issue(s) with supporting details?
Exam wording
Before responding to an examination, identify the disputed tax issues and assemble facts and records that address them.
Q23.Give the practical federal-tax rule for transcripts from IRS (e.g., access to and use of e-services).
Exam wording
IRS transcripts can provide account and return information, but access requires the taxpayer or a properly authorized person.
Q24.How does current authority treat financial documents and expense records (e.g., cancelled checks or equivalent, bank statements, credit card statements, receipts, brokerage records)?
Exam wording
Canceled checks, statements, receipts, and other contemporaneous financial records can substantiate return entries under examination.
Q25.What should a representative verify about legal documents (e.g., birth certificate, divorce decrees, lawsuit settlements)?
Exam wording
Legal documents are relevant when they establish status, rights, obligations, ownership, or the tax treatment of a transaction.
Q26.State the controlling rule for prior and subsequent tax returns.
Exam wording
Prior and subsequent returns can reveal carryovers, consistency issues, and facts relevant to the year under examination.
Q27.What must an EA remember about other substantive and contemporaneous documentation (e.g., corporate minutes)?
Exam wording
Contemporaneous business records are stronger support than an unsupported reconstruction prepared only after an IRS inquiry.
Q28.Give the practical federal-tax rule for business entity supporting documents (e.g., partnership agreement, corporate bylaws).
Exam wording
Entity agreements, minutes, and governing documents may be needed to establish authority and the substance of business transactions.
Q29.How should a practitioner handle internal Revenue Code and income tax regulations?
Exam wording
The Internal Revenue Code is enacted tax law, while Treasury regulations interpret and implement statutory provisions.
Q30.What official rule governs case law?
Exam wording
Court opinions interpret tax law; the controlling court and procedural posture matter when evaluating precedent.
Q31.Summarize the correct treatment of the IRS forms, instructions, and publications.
Exam wording
IRS forms, instructions, and publications are official guidance resources but are not substitutes for controlling law.
Q32.What common mistake should be avoided with private letter ruling?
Exam wording
A private letter ruling applies to the requesting taxpayer and generally may not be used as precedent by others.
Q33.What should a representative verify about tax treaties?
Exam wording
A tax treaty can reduce or exempt U.S. tax on specified income when the treaty, taxpayer, and item of income satisfy its terms.
Q34.How should a practitioner handle third-party correspondence (e.g., witness communications, employment records)?
Exam wording
Third-party correspondence and records may corroborate facts, but disclosure, summons, privilege, and contact rules still apply.
Q35.What is the exam-ready rule on freedom of Information Act (FOIA) requests?
Exam wording
FOIA provides a process to request agency records, subject to statutory exemptions and tax-return confidentiality limits.
Q36.What official rule governs requesting an audit reconsideration (e.g., documents and forms)?
Exam wording
Audit reconsideration is an administrative process for reevaluating an assessment when the taxpayer supplies qualifying information.
Q37.Summarize the correct treatment of representing a decedent.
Exam wording
A decedent's personal representative handles the decedent's final return and related tax responsibilities under the applicable authority.
Q38.How does current authority treat the IRS authority to investigate?
Exam wording
The IRS may examine relevant books, papers, records, and other data to determine the correctness of a return.
Q39.What must an EA remember about the IRS authority to fix time and place of investigation?
Exam wording
The IRS sets a reasonable time and place for an examination under the governing procedural rules.
Q40.Give the practical federal-tax rule for steps in the process (e.g., initial meeting, submission of IRS requested information).
Exam wording
An examination proceeds through notice, issue development and requested information, proposed findings, and the taxpayer's agreement or appeal options.
Q41.What is the key limitation involving interpretation and analysis of revenue agent report (RAR) (e.g., 30-day letter)?
Exam wording
A revenue agent's report and 30-day letter explain proposed changes and the route to request Appeals consideration.
Q42.What threshold rule applies to request for appeals consideration (e.g., preparation, elements contained)?
Exam wording
A request for Appeals consideration must contain the information required for the applicable protest or small-case request.
Q43.How does current authority treat enrolled Agent appearance at appeals conference?
Exam wording
An EA may appear at an IRS Appeals conference when eligible to practice and authorized by the taxpayer.
Q44.Give the practical federal-tax rule for reliance on software (e.g., review of results).
Exam wording
An ERO remains responsible for reviewing the return and e-file output; reliance on software does not excuse obvious errors.
Q45.What is the key limitation involving miscalculations and recognition of duplicate entries?
Exam wording
The preparer and ERO should review calculations, entries, and reject diagnostics rather than transmit known duplicate or inconsistent data.
Q46.Give the practical federal-tax rule for eFIN revocation appeal process.
Exam wording
An applicant or provider may use the administrative review and appeal procedures stated for denial, sanction, suspension, or expulsion from IRS e-file.
Q47.If a taxpayer disagrees with a proposed IRS examination change, what can they do?
Exam wording
Appeal the proposed change by following the procedures provided by the IRS.
Q48.In matters of tax law, the IRS must acquiesce in all decisions rendered by the:
Exam wording
U.S. Supreme Court
Q49.Treasury regulations are published in ____.
Exam wording
The Federal Register
Q50.The IRS generally has ____ to say whether it will comply with an FOIA request.
Exam wording
20 business days
Q51.Connor is having serious financial difficulties. Of the following situations, which is most likely to warrant intervention by the Taxpayer Advocate Service?
Exam wording
Connor has waited for months for the IRS to discharge the lien on his property, which must be removed immediately, or else the sale of the property will fall through.
Q52.Which of the following would have the highest authority in establishing a precedent for tax law for all taxpayers?
Exam wording
Treasury regulation.
Q53.Which branch of government is the primary source of tax law in the United States?
Exam wording
Legislative.
Q54.An IRS revenue officer has a question about a collection procedure involving a taxpayer. The revenue officer should consult:
Exam wording
The Internal Revenue Manual.
Q55.Circular 230 regulations are codified in:
Exam wording
Title 31 of the Code of Federal Regulations
Q56.Which of the following statements regarding revenue rulings is correct?
Exam wording
Revenue rulings can be used to avoid certain IRS penalties.
Q57.Of the following sources of information, which cannot factor into "substantial authority" for federal tax law purposes?
Exam wording
Legal opinion printed in a law school journal.
Q58.A private letter ruling is legally binding on the IRS if:
Exam wording
The taxpayer that received the private letter ruling, fully and accurately described the proposed transaction in their request and carried out the transaction as described.
Q59.Under which of the following scenarios would the Taxpayer Advocate Service (TAS) most likely provide assistance to a taxpayer?
Exam wording
Damian has contacted the IRS repeatedly, but is experiencing significant delays in resolving a tax matter.
Q60.What happens to an ITIN that has not been used on a federal tax return for three consecutive years?
Exam wording
It expires
Q61.Esteban is an enrolled agent. He fires his client, Jackie, for nonpayment. Esteban had submitted a power of attorney for Jackie several months ago, but now Esteban does not want to represent Jackie anymore, or receive any more IRS notices regarding her tax accounts. What should Esteban do?
Exam wording
Esteban should write the word "WITHDRAW" on the POA form and mail or fax it to the IRS.
Q62.The Centralized Authorization File (CAF) is:
Exam wording
An IRS computer database with information regarding the authority of individuals appointed under powers of attorney or designated under tax information authorizations.
Q63.What is the primary purpose of Form 2848 in tax-related matters?
Exam wording
To grant power of attorney to a representative.
Q64.Bellamy self-prepared his own tax return in 2025. He later received an audit notice for that return, but he does not want to deal with the IRS. Bellamy wants to hire someone to represent him at the examination. In order to have someone else represent him during the audit, all the following statements are correct except:
Exam wording
In order to save some money, Bellamy can potentially hire an unenrolled preparer, as long as that person has an AFSP certificate.
Q65.Which of these tasks is NOT permitted for an authorized representative to carry out on behalf of a taxpayer, even with a power of attorney?
Exam wording
Deposit a client's refund into their own bank account.
Q66.How many representatives can a taxpayer appoint using a single Form 2848?
Exam wording
Four
Q67.Taxpayers are granted a limited confidentiality privilege with any federally-authorized tax practitioner. Confidential communications include all of the following except:
Exam wording
Participation in a tax shelter.
Q68.Which authorization form gives the appointed person the greatest rights to represent a taxpayer?
Exam wording
Form 2848, Power of Attorney and Declaration of Representative.
Q69.How many years in the future can an authorization on a Form 2848 be recorded to the Centralized Authorization File (CAF)?
Exam wording
Current year + 3 years.
Q70.Which of the following relationships is considered "related" for the purpose of disclosing tax return information?
Exam wording
A child and their parent
Q71.What form must a taxpayer complete to renew an expiring ITIN?
Exam wording
Form W-7
Q72.Which of the following statements regarding the §7525 tax practitioner confidentiality privilege is correct?
Exam wording
Advice on non-criminal tax matters from a federally authorized practitioner has the same confidentiality protection as communication with an attorney.
Q73.Shane's tax return was chosen for examination, but he does not want to communicate with the IRS directly. Who may represent Shane in an examination, assuming the proper power of attorney authorization is in place?
Exam wording
All of the above may represent Shane before the IRS examination division.
Q74.Which of the following is NOT an eligible partner in order for a partnership to elect-out of the Centralized Partnership Audit Regime?
Exam wording
Trusts
Q75.Which of the following is a reason that the IRS would reopen a closed audit case?
Exam wording
There was fraud or misrepresentation from the taxpayer during the audit process.
Q76.Which type of IRS examination is conducted entirely by mail?
Exam wording
Correspondence Audit
Q77.Joshua received a notice from the IRS saying a prior year's tax return had been examined, creating a tax assessment of $2,875. Joshua disagrees with the amount of tax assessed. He could request an audit reconsideration in all of the following situations EXCEPT:
Exam wording
The full amount owed has already been paid.
Q78.Hazel trades a large number of stocks every year, although she is just a casual investor. Hazel's 2023 and 2024 tax returns were audited for investment interest expense. Both examinations resulted in no change to the return as filed. Hazel was notified that her 2025 return was selected again for examination for the same type of expenses. What should Hazel do?
Exam wording
Since Hazel has two prior no change audits, she should notify the Internal Revenue Service to see if the examination should be discontinued.
Q79.Gibson is being audited for a prior year, and he wishes to record the audit using an audio device. What must he do in order to record the audit?
Exam wording
Notify the examiner ten days in advance, in writing.
Q80.What is the maximum number of partners a partnership can have to be eligible to elect out of the Centralized Partnership Audit Regime?
Exam wording
100
Q81.Where does an office audit typically take place?
Exam wording
At a nearby IRS field office
Q82.Which of the following is not a term the IRS uses to classify an audit determination?
Exam wording
Acknowledged.
Q83.Armando's tax return was selected for audit, and he went through the examination. He was represented by Ginny, an unenrolled preparer with an AFSP certificate. Ginny prepared the return under audit. Armando wishes to appeal the examination, and prefers that Ginny represent him before IRS Appeals. What are his options?
Exam wording
Ginny cannot represent him before IRS Appeals. Armando may represent himself or hire an enrolled practitioner (CPA, attorney, or EA) to represent him at the Appeals level.
Q84.Which of the following best states the purpose of the IRS Independent Office of Appeals?
Exam wording
To help the taxpayer and the government settle their tax dispute and reach an equitable settlement.
Q85.Gamila owes a substantial sum to the IRS. She files a petition with the U.S. Tax Court. Her case is later determined to be frivolous, wholly without merit, and merely to cause delay. As a repercussion to Gamila's action, the Tax Court may impose a penalty of:
Exam wording
Up to $25,000.
Q86.A Statutory Notice of Deficiency is also known as a "90-day letter" because:
Exam wording
Taxpayers have 90 days from the date of the letter to file a petition with the U.S. Tax Court.
Q87.Kevin and Javier are general partners in FastLane Auto Repair, a body shop business. The partnership elected-out of the Centralized Partnership Audit Regime. Both had their individual returns examined, in separate examinations, and based on how each of them treated flow-through items from the partnership, the IRS assessed additional tax on both Kevin and Javier. However, both of them disagreed with the IRS. Kevin decided to take his case to the IRS Appeals office. After the conference, he and the IRS still disagreed. Javier decided to bypass the Appeals office altogether and go directly to court. Which of the following statements is correct?
Exam wording
Both Kevin and Javier can take their cases to the following courts: U.S. Tax Court, U.S. Court of Federal Claims, or the U.S. District Court.
Q88.Alyssa disagrees with the IRS examiner regarding the outcome of her recent audit. Her appeal rights are explained to her, and she decides to contest the tax by pursuing the case in the U.S. Tax Court. Which of the following statements is correct?
Exam wording
Alyssa must receive a Notice of Deficiency before she can petition the U.S. Tax Court.
Q89.Which of the following statements is correct regarding a taxpayer's right to appeal a tax assessment?
Exam wording
A taxpayer must first pay the contested tax before they can appeal in a U.S. District Court.
Q90.Geraldine is an EA. Which of the following tasks can she perform on behalf of a client?
Exam wording
Prepare and sign a protest to challenge examination results in the IRS Appeals Office.
Q91.Vivian's return went under examination, and she disagreed with the findings of the IRS. She filed a formal protest, and her case was then sent to the IRS Office of Appeals. What happens if Vivian and the IRS Appeals Office cannot reach an agreement?
Exam wording
The IRS will issue a notice of deficiency, giving Vivian the right to challenge the proposed deficiency in the U.S. Tax Court.
Q92.If a taxpayer and the IRS fail to settle a non-docketed examination controversy in the IRS Appeals Office, the next event to occur is:
Exam wording
Issuance of a notice of deficiency.
Q93.If a taxpayer wishes to challenge the IRS in a District Court, the taxpayer must:
Exam wording
Pay the contested liability first and then sue the IRS for a refund.
Q94.Under which of the following conditions would it be likely that the IRS will reopen a closed examination case to make an unfavorable adjustment and assess additional tax?
Exam wording
There was fraud or misrepresentation in the original examination.
Q95.An Enrolled Agent may NOT represent a taxpayer in a dispute before:
Exam wording
A U.S. District Court judge.
Q96.Lucas meets with a brand new client, Patty. Lucas has never worked with Patty before and does not know her personally. Under the IRS' verification requirements, what must Lucas do to authenticate Patty's identity if he is using electronic signatures, even if he is meeting with Patty in person?
Exam wording
Inspect Patty's government-issued picture ID, compare the picture to the applicant, and record the name, Social Security number, address, and date of birth.
Q97.What is the "perfection period" in the context of e-filed tax returns?
Exam wording
The time period during which a preparer can correct and re-transmit a rejected e-filed return.
Q98.The IRS may sanction providers who fail to comply with e-file regulations. It uses a specific system of categorizing how serious infractions are. Which is the most serious?
Exam wording
Level Three
Q99.What is the first step of the process for an individual to become an authorized e-file provider?
Exam wording
Create an authorized e-Services account online.
Q100.The IRS may excuse a preparer from the mandate to e-file in which of the following instances?
Exam wording
An individual case of hardship documented by the preparer.
Q101.Elizabeth e-filed a return for her new client, Bobby. The IRS rejected the e-filed tax return and the reason for the rejection cannot be rectified with the information that Bobby already provided to Elizabeth. What is her responsibility at that point?
Exam wording
Elizabeth must attempt to notify the taxpayer within 24 hours and provide the taxpayer with the rejection code accompanied by an explanation.
Q102.Which of the following tax preparers would be subject to the mandate that requires preparers to e-file their clients' returns?
Exam wording
Scott, who files sixteen individual tax returns and fifty payroll tax returns for compensation.
Q103.Electronic filing identification numbers (EFINs) are issued:
Exam wording
On a firm basis.
Q104.Uther recently opened a new tax practice and is advertising for his business. Which of the following presentations will violate the IRS' e-file advertising standards?
Exam wording
Uther offers to prepare a client's tax return using only a pay stub.
Q105.What should a tax preparer do if an e-filed return is rejected and cannot be corrected and accepted by the IRS through e-file?
Exam wording
The preparer should prepare a paper return, attach Form 8948, and have the taxpayer mail it.
Q106.Why is it important to use encrypted methods and procedures when transferring a client's information electronically?
Exam wording
To protect the confidentiality and integrity of the information
Q107.Which of the following events would be considered an "information security incident"?
Exam wording
An event that results in an unauthorized disclosure, misuse, or destruction of sensitive taxpayer information.
Q108.What is an IP PIN?
Exam wording
A six-digit number that helps prevent the misuse of a taxpayer's Social Security number.
Q109.The maximum number of refunds that may be electronically deposited into a single financial account is:
Exam wording
Three.
Q110.For how long is an IP PIN valid?
Exam wording
One year.
Q111.Which of the following security measures are professional tax preparers required by law to implement?
Exam wording
Implement a written information security plan.
Q112.What is an indication that a business's EIN might have been compromised?
Exam wording
The business receives IRS notices regarding a defunct, closed, or dissolved business entity.
Q113.Which type of plan is mandatory for every professional tax preparer to implement?
Exam wording
Written information security plan
Q114.What should a business do if it receives IRS notices about fictitious contractors or non-existent employees?
Exam wording
Contact the IRS immediately to report a potential business identity theft.
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