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1‑7. Tax litigation is the process of settling a dispute with the IRS in a court of law. Typically, a tax attorney handles tax litigation that progresses beyond the final IRS appeal.
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1-8. CPAs serve is a support capacity in tax litigation.
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1‑9. Tax research consists of the resolution of unanswered taxation questions. The tax research process includes the following:
- Identification of pertinent issues;
- Specification of proper authorities;
- Evaluation of the propriety of authorities; and,
- Application of authorities to a specific situation.
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1‑10. Circular 230 is issued by the Treasury Department and applies to all who practice before the IRS.
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1‑11. In addition to Circular 230, CPAs must follow the AICPA’s Code of Professional Conduct and Statements on Standards for Tax Services. CPAs must also abide by the rules of the appropriate state board(s) of accountancy.
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1-12. A return preparer must obtain 18 hours of continuing education from an IRS-approved CE Provider. The hours must include a 6 credit hour Annual Federal Tax Refresher course (AFTR) that covers filing season issues and tax law updates. The AFTR course must include a knowledge-based comprehension test administered at the conclusion of the course by the CE Provider.
Limited practice rights allow individuals to represent clients whose returns they prepared and signed, but only before revenue agents, customer service representatives, and similar IRS employees.
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1‑13. False. Only communication with the IRS concerning a taxpayer’s rights, privileges, or liability is included. Practice before the IRS does not include representation before the Tax Court.
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1‑14. Section 10.2 of Subpart A of Circular 230 defines practice before the IRS as including:
matters connected with presentation to the Internal Revenue Service or any of its officers or employees relating to a client’s rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service. Such presentations include the preparation and filing of necessary documents, correspondence with, and communications to the Internal Revenue Service, and the representation of a client at conferences, hearings, and meetings.
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1-15. To become an EA an individual can (1) pass a test given by the IRS or (2) work for the IRS for five years. Circular 230, Subpart A, §§ 10.4 to 10.6.
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1-16. EAs must complete 72 hours of continuing education every three years (an average of 24 per year, with a minimum of 16 hours during any year). Circular 230, Subpart A. § 10.6.