11.A taxpayer is claiming tax preparation expense as a legal and professional fee.They paid $430 at your office last year.Theformsbreakdownby cost is as follows:

Form 1040- $100

Form Sch. C- $125

Form SE- $55

Form 8867- $75

Form 8863- $75

What is the correct amount that can be deducted on their ScheduleC for the current year?

Choose one answer.

a.$280b.$180c.$355d.$430

Question

12

What is the most common reason the IRS assesses penalties to preparers during an audit?

Choose one answer.

a.Failure to obtain full documentation of Schedule C income b.Failure to obtain full documentation of both Schedule C income and Schedule C expense c.Failure to adequately question the client and document the responses d.Failure to prove business existence

Question

13

True orFalse- Documents that are listed on Form 8867, number 5, are required to be on file.

Choose one answer.

a.True b.False

Question

14

True orFalse- Documents that a taxpayer says they CAN provide should be listed on Form 8867, number 5.

Choose one answer.

a.True b.False

Question

15

A taxpayer brings ina 1099NEC for $7,000 and states that they made an additional $10,000 in income, but do not have any documentation.What steps need to be taken to ensure income is reasonably accurate?

Choose one answer.

a.Ask the client how the amount was determined. Document both the question and the answer b.Have taxpayer complete the Income Information Worksheet or other Reconstruction of Income c.None, the taxpayer's statement is sufficient d.Both a and b

Question

16

True orFalse- If a taxpayer brings in a logbook that adequately shows all income that is being claimed on the Schedule C, the preparer must make a copy of the full logbook.

Choose one answer.

a.True b.False

Question

17

True orFalse- All interview questions and answers must be documented in Fusion on the DD2 form.

Choose one answer.

a.True b.False

Question

18

True or False- All Schedule Cs prepared in the office must be listed on the Schedule C Reconstruction Log.

Choose one answer.

a.True b.False

Question

19

Which of the following areSchedule CRed Flags noted by the IRS?

Choose one answer.

a.Schedule C amounts are round numbers b.Schedule C with little or no expenses where expenses would be expected c.Schedule C with little or no records for income or expenses d.All of the above

Question

20

Before the Schedule C is completed, you shouldmake sure?

Choose one answer.

a.There are enough documents to support business existence b.You are confident the taxpayer operates a business c.The supporting documents agree with the tax return d.All of your questions have been answered and are documented e.All of the above