1.If the work is thoroughly documented, atax preparermay recommend a tax return position or prepare or sign a tax return reflecting a position thatexploits the tax audit selection processorserves as a mere arguing positionto obtain leverage in a negotiation with a taxing authority.

True

False

2.If a tax preparer identifies an error on a prior year tax return --

A	The preparer must immediately disclose the error to the tax authorities in writing or by amended tax return.
B	The preparer must immediately disclose the error to the client and then disclose the error to the tax authorities via amended tax return.
C	The preparer must immediately disclose the error to the client in writing, the impact of the error,and advise the client of the method to correct the error. The preparer is not obligated to disclose the error to the tax authorities, except under certain circumstances.
D	The preparer must immediately disclose the error to the client (either verbally/orally or in writing), the impact of the error,and advise the client of the method to correct the error. The preparer is not obligated to disclose the error to the tax authorities, except under certain circumstances.

3.Final responsibility for the contents of the tax return are the responsibility of the ---

A.	tax preparer.
B.	taxpayer.
C.	both the taxpayer and the tax preparer.
D.	It depends on the facts and circumstances.

4.For preparing a tax return, estimated amounts --

A.	may never be used. Only verified data can be used.
B.	may be used only if it is not practical to obtain exact data.
C.	may be usedif the tax preparer determines the estimates are reasonable under the circumstances.
D.	do not include appraisals and valuations.
E.	Options B, C, and D are correct.

5.In general, a tax preparer may sign a tax return if the preparer concludes that there is a "reasonable basis" for a tax position and the position is appropriately disclosed.

True

False

6.A tax preparer should never provide tax advice -- orally/verbally. All tax advice, no matter how basic, should always be provided in written format (i.e. email, letter, fax, etc.).

True

False

7.A tax preparer may rely on unverified data provided by the client under the following circumstances:

A.	The tax preparer may waive verification if the client has been with the tax preparer for more than two tax years.
B.	If the information appears incorrect, the preparer has made reasonable follow-up inquiries with the client and is now satisfied that it is correct.
C.	If the unverified information provided appears reasonable, correct, and complete.
D.	Options B & C are correct.
E.	Options A, B & C are correct.

8In general, a tax preparer may sign a tax returnif that return has an undisclosedposition which has no "realistic possibility" of being sustained administratively or judicially on its merits if challenged.

True

False

9.Regardinganswering questions on a tax return, a tax preparer should make a reasonable effort to answer questions for all of the following reasons EXCEPT

A.	A tax prepareroften must sign a preparers declaration stating that the return is true, correct, and complete.
B.	All questions on a tax return are automatically considered to have equal importance and should receive reasonable attention.
C.	A question may be of importance in determining taxable income or loss, or the tax liability shown on the return, in which circumstance an omission may detract from the quality of the return.
D.	A request for information may require a disclosure necessary for a complete return or to avoid penalties.