Final Exam > Results Page
final exam score:
final exam status:
87%
1, A Tax Professional's high level of ethical conduct: Cannot be evaluated by the IRS. XXXGives public confidence in the quality of service. Is only maintained by strict industry regulation. Has little effect on public confidence in individual members of the group.2, A Tax Professional's high ethical standards protect taxpayers by: XXXProviding them with an accurate return, including all tax benefits to which they are entitled. Guaranteeing their returns will not be questioned by the IRS. Promising they will be free from IRS penalties. Do not help taxpayers; they only protect the Tax Professional.
3, What is a Tax Professionals' correct response to a taxpayer who omitted items on an income tax return which was submitted in a previous year? Advise the taxpayer promptly of the fact of such omission and: Refuse to prepare the current-year return until the previous return is amended. Make an adjustment for the previous year's omission on the current-year return. XXXAdvise them of the consequences as provided under the Internal Revenue code and Preparer Regulations. Refer the taxpayer to a supervisor.
4, The IRS has the authority to assess a monetary penalty to which of the following? The taxpayer. The Tax Professional. H&R Block. XXXAll three of these.
5, (Wrong Answer) Rachel is the qualifying child of Greta, her grandmother, and Lisa, her mother. Greta's AGI is $22,000, and Lisa's AGI is $14,000. Both Greta and Lisa want to claim Rachel. Can you prepare a return for Greta claiming Rachel for EITC? Yes, Greta can claim Rachel for EITC because her AGI is higher. Yes, Greta can claim Rachel for EITC if she files before Lisa. XXXNo, Greta cannot claim Rachel for EITC because she is not her parent. No, Greta cannot claim Rachel for EITC because Lisa, the mother, holds a higher right than Greta, the grandmother.
6, Which of the following is NOT one of the four requirements for a Tax Professional to meet the EITC due diligence requirement? XXXProof of relationships claimed. Completion of an Eligibility Checklist. Computation of the Credit. Satisfaction of the Knowledge Requirement.
7, (Wrong Answer) Sabrina, who wants to claim EITC, informs her Tax Professional that she is still married but is separated from her spouse, and that her seven-year-old son lives with her. Logically, what is the first EITC-related question to ask her? How long has your son lived in your household? When did your spouse last live in your household? XXXDid anyone else live in your household? Do you want to file a joint return with your spouse?
8, Tax preparation software is designed to meet EITC due diligence tests. But the software alone cannot satisfy which test? Retain a record of how and when EITC information was obtained and the identity of the person who provided it. XXXComply with the Knowledge Requirement. Complete an Eligibility Checklist. Compute the amount of the Credit.
9, Harmon comes to you for help filing a return this year because he received a Form W-2 from a second job. He tells you that he has not filed tax returns for the past two years because his wages from his first job are paid in cash. Which of the following most accurately states your responsibilities as a Tax Professional? Advise the IRS about Harmon's failure to report income. Advise Harmon he should report his cash wages and file his prior-year returns. Advise Harmon that if the IRS has not investigated him before, they will probably not do so now. XXXAdvise Harmon he must report his cash wages and file prior-year returns, and explain the consequences for failure to do so.
10, Henry, who is not a dependent, states he wishes to claim EITC this year for his 35-year-old dependent child. Both reside in the U.S. Henry states that the child lives with Henry, is not married, is disabled, and has not worked during the year. What does Henry's Tax Professional need to do to determine if the child can qualify Henry for EITC? Enter Henry's child on his return and identify him as a disabled qualifying child. XXXAdvise the taxpayer of the tax definition of disabled and apply sound judgment and common sense to see if the definition is met. Ask for proof of the child's income. Explain to Henry that a 35-year-old child is too old to be a qualifying child for EITC.
11, The H&R Block Maximum Refund Guarantee: Gives clients the right to claim whatever deductions they wish on their returns. XXXNever excuses preparing an inaccurate or incomplete Schedule C. Is only for Peace of Mind® Extended Service Plan clients. Does not respect EITC due diligence rules.
12, Karla is an unenrolled preparer. For the past five years, the information Michael provided Karla to prepare his return included a Form 1099-R from a pension that shows significant income. This year, a 1099-R is not included in Michael's information.What is true about Karla's duty? XXXKarla is required by due diligence to tell Michael that she noticed a 1099-R is missing, and inquire as to whether or not he should have received a 1099-R this year. Karla must contact the IRS and advise them that Michael has not disclosed all his income tax information. Karla must refuse to prepare Michael's return this year because he may have missing information. Karla should prepare Michael's return without discussion. Tax returns are prepared based on the information provided by the taxpayer.
13, To claim the filing status of head of household, a taxpayer must: Have a dependent who pays less than half of their own support. Be single according to the laws of the state of residence. XXXPay over half the cost of maintaining the household for themselves and a qualifying person. Live in the U.S. more than half the year.
14, When a taxpayer comes to H&R Block hoping to defraud the government by electronically filing a false return: The taxpayer is protected by IRS privacy rules which forbid the Tax Professional from telling anyone else about the return. XXXContact your supervisor. Call the IRS as soon as possible. Confront the taxpayer and, in no uncertain terms, accuse them of fraud.
15, When a taxpayer receives more EITC after adding a Schedule C to their return than they would have received without it, the Tax Professional must: Document in notes the amount of EITC with and without Schedule C. Omit Schedule C from the return. XXXApply sound judgment and common sense to the information provided and provide question and answer documentation to show the questions asked and the taxpayer's responses. Enter only a modest amount of expenses on Schedule C.
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Collection of Other Ethics Quiz
Ethics WBT (2014) - B
(00547028, 2014)
This course covers
ethical standards for Tax Professionals.
To explain tax law regarding: ▪ Confidentiality ▪ Due diligence ▪ Conflicts of interest ▪ Best practices
Final: Passed
Completion Status: Successful
Score: 93
To explain tax law regarding: ▪ Confidentiality ▪ Due diligence ▪ Conflicts of interest ▪ Best practices
Final: Passed
Completion Status: Successful
Score: 93
Question 1
Virginia comes to your tax office to have her
income tax return prepared. She is eligible to claim EITC based on Kellie, her
granddaughter and qualifying child. Kellie's father, Herman, also is eligible
and plans to claim Kellie as a qualifying child for EITC. Which of the
following statements is accurate?
XX Herman holds a higher right and may claim
EITC based on Kellie because Herman is Kellie's parent.
As long as Virginia files before Herman, you
may prepare her return claiming EITC based on Kellie.
Virginia may claim EITC based on Kellie if her
AGI was higher than Herman's and if she files first.
Herman and Virginia may agree to each claim
one-half of the EITC based on Kellie, their qualifying child.
Question 2
Tax preparation software is designed to meet
EITC due diligence tests. But the software alone cannot satisfy which test?
Retain a record of how and when EITC
information was obtained and the identity of the person who provided it.
XX Comply with the knowledge requirement.
Complete an eligibility checklist.
Compute the amount of the credit.
Question 3
Harmon comes to you for help filing a return
this year because he received a Form W-2 from a second job. He tells you he has
not filed tax returns for the past two years because his wages from his first
job are paid in cash. Which of the following most accurately states your
responsibilities as a Tax Professional?
Advise the IRS about Harmon's failure to
report income.
Advise Harmon he should report his cash wages
and file his prior-year returns.
Advise Harmon that if the IRS has not
investigated him before, they will probably not do so now.
XX Advise Harmon he must report his cash wages
and file prior-year returns, and explain the consequences for failure to do so.
Question 4
When a taxpayer comes to H&R Block hoping
to defraud the government by electronically filing a false return:
The taxpayer is protected by IRS privacy
rules, which forbid the Tax Professional to tell anyone else about the return.
XX Contact your supervisor.
Call the IRS as soon as possible.
Confront the taxpayer and, in no uncertain
terms, accuse them of fraud.
Question 7
Sabrina, who wants to
claim EITC, informs her Tax Professional that she is still married but is
separated from her spouse, and that her seven-year-old son lives with her.
Logically, what is the first EITC-related question to ask her?
How long has your son
lived in your household?
When did your spouse
last live in your household?
(This is a WRONG
answer) X Did anyone else live in your household?
Do you want to file a
joint return with your spouse?
Ethics WBT (2014)
(00547003, 2014)
This course covers
ethical standards for Tax Professionals. To explain tax law regarding:
▪ Confidentiality
▪ Due diligence
▪ Conflicts of interest
▪ Best practices
▪ Confidentiality
▪ Due diligence
▪ Conflicts of interest
▪ Best practices
New Question for 2014
A score of 100%
Question A1
Under what circumstances may a tax preparer
who prepares federal tax returns endorse or otherwise negotiate a client's
federal tax refund check?
·
A tax preparer may cash a federal tax refund check if the client
endorses the check and grants power of attorney on Form 2848.
·
XXX No circumstances exist that allow a tax preparer
to endorse or otherwise negotiate a client's federal tax refund check.
·
A tax preparer may endorse and cash a federal tax refund check
if the amount of the check is less than $100 and the client has no bank
account.
·
A tax preparer, who is authorized to represent taxpayers, may
endorse and cash a federal tax refund check for a client.
Question A2
Which of the following is NOT one of the four
requirements for a Tax Professional to meet the EITC due diligence requirement?
·
XXX Proof of relationships claimed
·
Completion of an eligibility checklist
·
Computation of the credit
·
Satisfaction of the knowledge requirement
Question A3
Pete, who is unmarried and wants to claim
EITC, is 18-years-old and has a two-year-old daughter. They both live with his
parents. Pete earned $3,000 from a part-time job. Logically, what is the first
EITC-related question to ask him?
·
XXX When did you live with your parents?
·
When did your daughter live with you?
·
Where is the child's mother?
·
Were you a full-time student?
Question A4
Which of the following is NOT an example of
tax preparation due diligence? Taking reasonable steps to:
·
Assure that all income is reported on a tax return.
·
Assure that the taxpayer meets all required criteria for
claiming dependency exemptions.
·
Provide tax returns to clients before filing deadlines.
·
XXX Enter your PTIN on the return that you sign
Question A5
A Tax Professional asks probing questions to
protect:
·
Only the taxpayer
·
Only H&R Block and the Tax Professional
·
Only the Tax Professional
·
XXX The taxpayer, the Tax Professional, and H&R Block
Ethics WBT (2013)
(00321568, 2013)
This course covers ethical standards for Tax
Professionals. This course explains tax law regarding:
▪ Confidentiality
▪ Due diligence
▪ Conflicts of interest
▪ Best practices
Final Exam
SCORE: 81%
PASSED
Question 1
A Tax Professional group's high level of
ethical conduct:
Cannot be evaluated by the IRS.
X Gives the public confidence in the quality
of service provided, regardless of which member of the group provides the
service.
Is only maintained by strict industry
regulation.
Has little effect on public confidence in
individual members of the group.
Question 2
A Tax Professional's high ethical standards
protect clients by:
X Providing them with an accurate return,
including all tax benefits to which they are entitled.
Guaranteeing their returns will not be
questioned by the IRS.
Promising they will be free from IRS
penalties.
None of the above. High Tax Professional
standards do not help clients; they only protect the Tax Professional.
Question 3
Who does a Tax Professional contact after
suspecting a client of using H&R Block services for an unlawful purpose?
The IRS
X The Tax Professional's manager
No one
H&R Block Client Support
Question 4
The IRS has the authority to assess a monetary
penalty to which of the following?
The client
The Tax Professional
H&R Block
X All three of these
Question 5
Rachel is the qualifying child of Greta, her
grandmother, and Lisa, her mother. Greta’s AGI is $22,000, and Lisa’s AGI is
$14,000. Both Greta and Lisa want to claim Rachel. Can you prepare a return for
Greta claiming Rachel for EITC?
Yes, Greta can claim Rachel for EITC because
her AGI is higher.
Yes, Greta can claim Rachel for EITC if she
files before Lisa.
No, Greta cannot claim Rachel for EITC because
she is not her parent.
X No, Greta cannot claim Rachel for EITC
because Lisa, the mother, holds a higher right than Greta, the grandmother.
Question 6
Which of the following is NOT one of the four
requirements for a Tax Professional to meet the EITC due diligence requirement?
Maintain a record of how and when EITC
information was obtained and the identity of the person who provided it.
X Investigate and verify the accuracy of
information a client provides to show eligibility for EITC.
Prepare an EITC eligibility checklist for a
potential EITC client by completing Form 8867 or an alternate eligibility
record.
Compute the EITC by completing an Earned
Income Credit worksheet or alternate computation record.
Question 7
Sabrina, who wants to claim EITC, informs her
Tax Professional that she is still married but is separated from her spouse,
and that her seven-year-old son lives with her. Logically, what is the first
EITC-related question to ask her?
How long has your son lived in your
household?
When did your spouse last live in your
household?
X Did anyone else live in your
household?
Do you want to file a joint return with your
spouse?
Question 8
Grace is your best friend's 20-year-old
daughter. Grace has a one-year-old child. You know that Grace lived at home and
was a full-time student until she quit college at the end of September of the
tax year. Your friend (Grace's mom) gives you Grace's tax documents and tells
you to let Grace claim herself and claim her child for EITC. To meet the EITC
due diligence knowledge requirement, you:
X Cannot ignore the facts about Grace living
with her mother for nine months of the year when she was a full-time
student.
Can disregard information obtained through a
personal relationship.
Cannot complete Grace's return under any
circumstances.
Can complete Grace's return filing her as a
single non-dependent, with EITC for her child.
Question 9
Which of the following is NOT an example of
tax preparation due diligence? Taking reasonable steps to:
Assure that all income is reported on a tax
return.
Assure that the taxpayer meets all required
criteria for claiming dependency exemptions.
Provide tax returns to clients before filing
deadlines.
X All of these are examples of due diligence.
Question 10,
Henry, who is not a dependent, states he
wishes to claim EITC this year for his 35-year-old dependent child. Both reside
in the U.S. Henry states that the child lives with Henry, is not married, is
disabled, and has not worked during the year. What does Henry's Tax
Professional need to do to determine if the child can qualify Henry for EITC?
Enter Henry's child on his return and identify
him as a disabled qualifying child.
X Advise the client of the tax definition of
disabled and apply sound judgment and common sense to see if the definition is
met.
Ask for proof of the child's income.
Explain to Henry that a 35-year-old child is too
old to be a qualifying child for EITC.
Question 11
The H&R Block Maximum Refund Guarantee:
Gives clients the right to claim whatever
deductions they wish on their returns.
X Never excuses preparing an inaccurate or
incomplete Schedule C.
Is only for Peace of Mind® Extended Service
Plan clients.
Does not respect EITC due diligence rules.
Question 12
If a Schedule C client does NOT bring the Tax
Professional documentation to prove income:
They cannot claim EITC.
The Tax Professional cannot prepare the
return.
They can make a Form 1099-MISC to document
their own income.
X They must give the Tax Professional other
indication that the self-employment income is accurate before the Tax
Professional can complete and sign the return.
Question 13
A good Schedule C interview includes a Tax
Professional:
X Explaining to the client that an accurate
Schedule C reports all income and expenses associated with the business.
Accepting the client's statement of expenses
with no questions asked.
Ignoring items which might reduce the client's
refund.
Providing amounts for expenses typical in the
region where the return is being prepared.
Question 14,
When a client files for EITC based on earned
income from Schedule C, their Tax Professional must:
Attach to the return documentation of their
income and expenses.
Prepare the return in a way which is
disadvantageous to the client.
Document all questions they asked the client
and all of the client's responses.
X Document the questions they asked and the
client's answers to questions they asked pertaining to the income that is
advantageous for EITC.
Question 15,
When a taxpayer receives more EITC after
adding a Schedule C to their return than they would have received without it,
the Tax Professional must:
Document in notes the amount of EITC with and
without Schedule C.
Omit Schedule C from the return.
X Apply sound judgment and common sense to the
information provided and provide question and answer documentation to show the
questions asked and the taxpayer's responses.
Enter only a modest amount of expenses on
Schedule C.
Question 16,
Under Circular 230, Lisa, a Tax Professional,
may sign, as the preparer, a tax return that:
Reports a $12,000 loss from an investment with
no documentation or written opinion.
Shows zero income tax due and includes a claim
that filing and paying income taxes are voluntary.
X Takes a non-frivolous position and has
substantial authority for the position.
Takes an undisclosed position that Marissa has
not encountered before and does not have time to research.
Ethics (2012) ITC
(00289634, 2012)
88%
1, A Tax Professional group's high level of ethical conduct:
Cannot be evaluated by the IRS.
(Correct) Gives public confidence in the quality of
service provided regardless of which member of the group provides the service.
Is only maintained by strict industry regulation.
Has little effect on public confidence in individual members of
the group.
2, A Tax Professional's high ethical standards protect clients
by:
(Correct) Providing them with an accurate return,
including all tax benefits to which they are entitled.
Guaranteeing their returns will not be questioned by the IRS.
Promising they will be free from IRS penalties.
High Tax Professional standards do not help clients; they only
protect the Tax Professional.
3, What is a Tax Professional's correct response to a client who
omitted items on an income tax return which was submitted in a previous year?
Advise the client promptly of the fact of such omission and:
Refuse to prepare the current-year return until the previous
return is amended.
Make an adjustment for the previous year's omission on the
current-year return.
(Correct) Advise them of the consequences as provided
under the Internal Revenue code and Preparer Regulations.
Refer the client to a supervisor.
4, The IRS has the authority to assess a monetary penalty to
which of the following?
The client
(incorrect) The Tax Professional
H&R Block
All three of these
5, Rachel is the qualifying child of Greta, her grandmother, and
Lisa, her mother. Greta’s AGI is $22,000, and Lisa’s AGI is $14,000. Both Greta
and Lisa want to claim Rachel. Can you prepare a return for Greta claiming
Rachel for EITC?
Yes, Greta can claim Rachel for EITC because her AGI is higher.
Yes, Greta can claim Rachel for EITC if she files before Lisa.
No, Greta cannot claim Rachel for EITC because she is not her
parent.
(Correct) No, Greta cannot claim Rachel for EITC
because Lisa, the mother, holds a higher right than Greta, the grandmother.
6,Which of the following is NOT one of the four requirements for
a Tax Professional to meet the EITC due diligence requirement?
Maintain a record of how and when EITC information was obtained
and the identity of the person who provided it.
(Correct) Investigate and verify the accuracy of
information a client provides to show eligibility for EITC.
Prepare an EITC eligibility checklist for a potential EITC
client by completing Form 8867 or an alternate eligibility record.
Compute the EITC by completing an Earned Income Credit worksheet
or alternate computation record.
7, Sabrina, who wants to claim EITC, informs her Tax
Professional that she is still married but is separated from her spouse, and
that her seven-year-old son lives with her. Logically, what is the first
EITC-related question to ask her?
(incorrect)V How long has your son lived in your household?
When did your spouse last live in your household?
Did anyone else live in your household?
Do you want to file a joint return with your spouse?
8, Tax preparation software is designed to meet EITC due
diligence tests. But the software alone cannot satisfy which test?
Retain a record of how and when EITC information was obtained
and the identity of the person who provided it.
(Correct) Comply with the knowledge requirement.
Complete an eligibility checklist.
Compute the amount of the credit.
9, Harmon comes to you for help filing a return this year
because he received a Form W-2 from a second job. He tells you he has not filed
tax returns for the past two years because his wages from his first job are
paid in cash. Which of the following most accurately states your
responsibilities as a Tax Professional?
Advise the IRS about Harmon's failure to report income.
Advise Harmon he should report his cash wages and file his
prior-year returns.
Advise Harmon that if the IRS has not investigated him before,
they will probably not do so now.
(Correct) Advise Harmon he must report his cash wages
and file prior-year returns, and explain the consequences for failure to do so.
10, In which of the following situations should a Tax
Professional be especially wary?
In which of the following situations should a Tax Professional
be especially wary?
Many Forms W-2 for one tax year
(Correct) A handwritten Form W-2
All income and expenses are reported on Schedule C
Many children live in the taxpayer's household
11, The H&R Block Maximum Refund Guarantee:
Gives clients the right to claim whatever deductions they wish
on their returns.
(Correct) Never excuses preparing an inaccurate or
incomplete Schedule C.
Is only for Peace of Mind® Extended Service Plan clients.
Does not respect EITC due diligence rules.
12, If a Schedule C client does NOT bring the Tax Professional
documentation to prove income:
They cannot claim EITC.
The Tax Professional cannot prepare the return.
They can make a Form 1099-MISC to document their own income.
(Correct) They must give the Tax Professional other
indication that the self-employment income is accurate, before the Tax
Professional can complete and sign the return.
13, A good Schedule C interview includes a Tax Professional:
(Correct) Explaining to the client that an accurate
Schedule C reports all income and expenses associated with the business.
Accepting the client's statement of expenses with no questions
asked.
Ignoring items which might reduce the client's refund.
Providing amounts for expenses typical in the region where the
return is being prepared.
14, When a client comes to H&R Block hoping to defraud the
government by electronically filing a false return:
The client is protected by IRS privacy rules which forbid the
Tax Professional to tell anyone else about the return.
(Correct) Contact your supervisor.
Call the IRS as soon as possible.
Confront your client and, in no uncertain terms, accuse them of
fraud.
15, When a taxpayer receives more EITC after adding a Schedule C
to their return than they would have received without it, the Tax Professional
must:
Document in notes the amount of EITC with and without Schedule
C.
Omit Schedule C from the return.
(Correct) Apply sound judgment and common sense to
the information provided and provide question and answer documentation to show
the questions asked and the taxpayer's responses.
Enter only a modest amount of expenses on Schedule C.
16, Under what circumstances may a tax preparer who prepares
federal tax returns endorse or otherwise negotiate a client’s federal tax
refund check?
A tax preparer may cash a federal tax refund check if the client
endorses the check and grants power of attorney on Form 2848.
(Correct) No circumstances exist that allow a tax preparer to
endorse or otherwise negotiate a client’s federal tax refund check.
A tax preparer may endorse and cash a federal tax refund check
if the amount of the check is less than $100 and the client has no bank
account.
A tax preparer, who is authorized to represent taxpayers, may
endorse and cash a federal tax refund check for a client.