An Enthusiast about Tax: Tax Return Preparer Penalties (00316690)

This course explores the various penalties the IRS may impose on tax return preparers who engage in certain behaviors. The Internal Revenue Code contains penalties to stop the practices of fraudulent, unscrupulous, and/or incompetent tax return preparers. The penalties are intended to curb misbehavior and boost compliance with the tax laws. The penalties discussed in this course are related to the preparer’s principal work activity: the preparation and filing of federal tax returns.
Final Exam > Results Page

final exam score:

final exam status:

90%

Question 1

Correct

Code Sec. 6694(a) imposes a penalty in an amount equal to the greater of ______ or ____ of the income derived—or to be derived—by the tax return preparer from the preparation of the return.

$100 or 10 percent

$500 or 25 percent

(You Answered) (Correct Answer) $1,000 or 50 percent

$5,000 or 75 percent

Question 2

Correct

Code Sec. 6694(b) imposes a penalty in an amount equal to the greater of _____ or ____ percent of the income derived—or to

$100 or 10 percent

$500 or 25 percent

(You Answered) (Correct Answer) $5,000 or 50 percent

$10,000 or 100 percent

Question 3

Correct

If both the Code Sec. 6694(a) and Code Sec. 6694(b) penalties apply to a tax return preparer:

The 6694(a) amount must be multiplied by two

(You Answered) (Correct Answer) The 6694(b) amount must be reduced by the 6694(a) amount

The 6694(b) amount must be ignored

The greater of the two amounts is used

Question 4

Incorrect

What is the maximum penalty under Code Sec. 6695(f), Negotiation of Check, for each check issued to the taxpayer impermissibly endorsed or otherwise negotiated by a preparer?

(Correct Answer) $500

$1,000

$2,000

(You Answered) There is no maximum penalty

Question 5

Correct

All tax return preparers who prepare returns for compensation must obtain and use a preparer tax identification number (PTIN) unless the returns are exempt by the IRS. The PTIN requirement applies as of ______.

January 1, 2009

(You Answered) (Correct Answer) January 1, 2011

January 1, 2012

January 1, 2013

Question 6

Correct

Under United States-Republic of Korea Free Trade Agreement Implementation Act of 2011, the penalty for noncompliance with

$100 per failure

$250 per failure

$300 per failure

(You Answered) (Correct Answer) $500 per failure

Question 7

Correct

Under Code Sec. 7216, the maximum penalty for tax return preparers who knowingly or recklessly make unauthorized disclosures or uses of information furnished in connection with the preparation of an income tax return is:

Six months imprisonment or a fine of up to $500 or both

(You Answered) (Correct Answer) One year imprisonment or a fine of up to $1,000 or both

Two years imprisonment or a fine of up to $5,000 or both

Five years imprisonment or a fine of up to $10,000 or both

Question 8

Correct

The new designation for tax return preparers initiated as a result of an IRS oversight study in 2009 is:

(You Answered) (Correct Answer) Registered tax return preparers

Unenrolled agents

Supervised preparers

Enrolled tax return practitioners

Question 9

Correct

A specified tax return preparer for purposes of mandatory e-filing is any person who prepares covered returns for compensation unless that person reasonably expects to file _____ or fewer individual income tax returns in a calendar year.

(You Answered) (Correct Answer) 10

100

Question 10

Correct

Circular 230’s rules of practice are enforced by the:

Financial Accounting Standards Board

(You Answered) (Correct Answer) IRS Office of Professional Responsibility

International Financial Reporting Standards Board

Public Company Accounting Oversight Board