, TESTBANK FOR Federal Tax Research 13th Edition Sawyers
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
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,Chapter 01 - Introduction to Tax Practice and Ethics
1. Tax compliance is the process of:
a. filing necessary tax returns
b. gathering the financial information necessary to report taxable income
c. representing a taxpayer at an IRS audit
d. all of these are correct.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-1 Elements of Tax Practice: Tax Compliance
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:56 PM
DATE MODIFIED: 12/18/2023 7:56 PM
2. Tax evasion is:
a. a fraudulent act involving illegal nonpayment of taxes
b. one of the objectives of tax planning
c. an act of deferring tax payments to future periods
d. the same as tax avoidance, as both of them result in nonpayment of taxes
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 7:57 PM
DATE MODIFIED: 12/18/2023 7:57 PM
3. Tax litigation is a process of:
a. participating in an administrative audit
b. settling tax-related disputes in a court of law
c. filing amended tax returns as prescribed by tax laws
d. arranging a taxpayer’s affairs to minimize tax liabilities
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-3 Elements of Tax Practice: Tax Litigation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:58 PM
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 01 - Introduction to Tax Practice and Ethics
DATE MODIFIED: 12/18/2023 7:59 PM
4. Regarding open transactions, which of the following statements is INCORRECT?
a. The transaction is not yet completed.
b. The practitioner can suggest changes to achieve a better tax result.
c. A tax practitioner has some degree of control over the client’s tax liability.
d. The practitioner can fix the problem by amending the client’s tax return.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-2 Elements of Tax Practice: Tax Planning
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:59 PM
DATE MODIFIED: 12/18/2023 7:59 PM
5. Which of the following statements best describes Circular 230?
a. Circular 230 has been adopted by the AICPA as its set of rules of practice for CPAs.
b. Circular 230 is a set of Treasury Department ethical and legal standards for those engaging in
practice before the IRS.
c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from
unfair discipline by the IRS.
d. Circular 230 is a set of ethical rules for taxpayers.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:00 PM
DATE MODIFIED: 12/18/2023 8:00 PM
6. Who can represent a taxpayer before the IRS Appeals Office under Circular 230?
a. a CPA
b. an officer of a corporation may represent the corporation
c. an attorney
d. all of these are correct.
e. both a CPA and an attorney
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 01 - Introduction to Tax Practice and Ethics
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:01 PM
DATE MODIFIED: 12/18/2023 8:01 PM
7. In a closed transaction, the scope of tax planning is:
a. more limited as compared to an open transaction
b. limited by the IRS rules of practice
c. limited to presenting the taxpayer’s facts to the government in the most favorable, legal
manner
d. more limited as compared to an open transaction and limited to presenting the taxpayer’s facts
to the government in the most favorable, legal manner
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1-2 Elements of Tax Practice: Tax Planning
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 8:02 PM
DATE MODIFIED: 12/18/2023 8:02 PM
8. Circular 230 includes rules on all of the following topics EXCEPT:
a. who is authorized to practice before the IRS
b. standards for “covered opinions”
c. compliance with state ethical requirements
d. a set of best practices to guide practitioners
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:03 PM
DATE MODIFIED: 12/18/2023 8:04 PM
9. Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:
a. members of the AICPA
b. enrolled agents
c. attorneys
d. IRS authorities
e. all of these are correct.
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 01 - Introduction to Tax Practice and Ethics
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:05 PM
DATE MODIFIED: 12/18/2023 8:06 PM
10. An EA must renew his or her enrollment card on a:
a. 5-year cycle
b. 3-year cycle
c. 2-year cycle
d. Renewal is not required once an EA gets a card
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-6 Rules and Ethics in Tax Practice: National Association of Enrolled
Agents (NAEA) Rules of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:06 PM
DATE MODIFIED: 12/18/2023 8:07 PM
11. Under Section 10.3, Subpart A, of Circular 230, the following individuals may practice before the IRS
EXCEPT:
a. unenrolled agents
b. enrolled agents
c. enrolled actuaries
d. enrolled retirement plan agents
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:07 PM
DATE MODIFIED: 12/18/2023 8:09 PM
12. Due diligence, in essence, means a tax practitioner:
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 01 - Introduction to Tax Practice and Ethics
a. must be efficient in performing his duties
b. must give due respect to IRS officials
c. should use reasonable effort to comply with the tax laws
d. should charge reasonable fees for work performed for a client
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:09 PM
DATE MODIFIED: 12/18/2023 8:10 PM
13. A contingent fee is:
a. always allowed by Circular 230
b. a fee that is out of line with the value of the service provided
c. a fee based on a percentage of a taxpayer’s refund on a tax return
d. all of these are correct
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:10 PM
DATE MODIFIED: 12/18/2023 8:11 PM
14. According to Circular 230, the “best practices” rules are:
a. mandatory for all tax practitioners
b. restricted only to attorneys and CPAs
c. Aspirational meaning they set goals for tax practitioners
d. enforced by disbarment from practice before the IRS
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:11 PM
Copyright Cengage Learning. Powered by Cognero. Page 5
,Chapter 01 - Introduction to Tax Practice and Ethics
DATE MODIFIED: 12/18/2023 8:11 PM
15. The six principles of professional conduct under the AICPA Code include:
a. responsibilities
b. public interest
c. integrity
d. all of these are correct
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:12 PM
DATE MODIFIED: 12/18/2023 8:12 PM
16. Under the AICPA Code of Professional Conduct, which of the following actions would constitute
deceptive advertising?
a. advertising too frequently
b. implying that the CPA had the ability to influence an IRS official
c. promising a favorable result without justification
d. implying that the CPA had the ability to influence an IRS official and promising a favorable
result without justification
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:13 PM
DATE MODIFIED: 12/18/2023 8:14 PM
17. Under Statements on Standards for Tax Services No. 2 (SSTS No. 2), a CPA preparing a tax return
should perform all of the actions EXCEPT:
a. independently confirm the accuracy of the taxpayer’s information
b. obtain additional information if the taxpayer’s information appears to be incorrect or
incomplete
c. review the prior year’s return when feasible
d. determine when conditions for a deduction have been met
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
Copyright Cengage Learning. Powered by Cognero. Page 6
,Chapter 01 - Introduction to Tax Practice and Ethics
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:14 PM
DATE MODIFIED: 12/18/2023 8:15 PM
18. Which of the following is CORRECT about a CPA’s responsibility with regard to tax return positions
under Statements on Standards for Tax Services No. 2 (SSTS No. 2)?
a. A CPA may not base his or her position on authority not approved by the IRS under Section
6662 (accuracy-related penalty).
b. A CPA may sign a return with a tax position with a realistic possibility of being sustained on
the merits.
c. A CPA may not sign a return with any tax position that is not fully disclosed.
d. All of these are correct.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:15 PM
DATE MODIFIED: 12/18/2023 8:16 PM
19. The Statements on Standards for Tax Services (SSTS) are issued by:
a. the Internal Revenue Service
b. the FASB
c. the AICPA
d. the American Bar Association
e. the AICPA and the American Bar Association jointly
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:22 PM
DATE MODIFIED: 12/18/2023 8:24 PM
20. The Statements on Standards for Tax Services are:
Copyright Cengage Learning. Powered by Cognero. Page 7
, Chapter 01 - Introduction to Tax Practice and Ethics
a. part of the ABA Code of Professional Responsibility
b. intended to replace Circular 230
c. intended to supplement the AICPA Code of Professional Conduct and Circular 230
d. none of these are correct
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:24 PM
DATE MODIFIED: 12/18/2023 8:25 PM
21. Which of the following statements best explains the need for tax practitioners to understand
nonregulatory ethical models of behavior?
a. Competing ethical solutions must be resolved by the courts.
b. There is more to ethical behavior than just following the rules of professional organizations.
c. Practitioners must always choose the action with the greatest benefit for their client.
d. Ethical choices are clearly spelled out by IRS regulations.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 3-2 Nonregulatory Ethical Behavioral Models: Ethical Professional Behavior
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:25 PM
DATE MODIFIED: 12/18/2023 8:26 PM
22. The primary change made by the Sarbanes-Oxley Act and affecting the practice of public accounting
is:
a. Public accounting firms may no longer provide any actuarial services.
b. Accounting firms may no longer offer tax shelters.
c. Auditors may never do tax compliance work for their clients.
d. Public accounting firms may provide some nonaudit services to their audit clients if an audit
committee approves the services in advance.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-4 Rules and Ethics in Tax Practice: Sarbanes-Oxley and Taxation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
Copyright Cengage Learning. Powered by Cognero. Page 8
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Chapter 01 - Introduction to Tax Practice and Ethics
1. Tax compliance is the process of:
a. filing necessary tax returns
b. gathering the financial information necessary to report taxable income
c. representing a taxpayer at an IRS audit
d. all of these are correct.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-1 Elements of Tax Practice: Tax Compliance
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:56 PM
DATE MODIFIED: 12/18/2023 7:56 PM
2. Tax evasion is:
a. a fraudulent act involving illegal nonpayment of taxes
b. one of the objectives of tax planning
c. an act of deferring tax payments to future periods
d. the same as tax avoidance, as both of them result in nonpayment of taxes
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 7:57 PM
DATE MODIFIED: 12/18/2023 7:57 PM
3. Tax litigation is a process of:
a. participating in an administrative audit
b. settling tax-related disputes in a court of law
c. filing amended tax returns as prescribed by tax laws
d. arranging a taxpayer’s affairs to minimize tax liabilities
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-3 Elements of Tax Practice: Tax Litigation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:58 PM
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 01 - Introduction to Tax Practice and Ethics
DATE MODIFIED: 12/18/2023 7:59 PM
4. Regarding open transactions, which of the following statements is INCORRECT?
a. The transaction is not yet completed.
b. The practitioner can suggest changes to achieve a better tax result.
c. A tax practitioner has some degree of control over the client’s tax liability.
d. The practitioner can fix the problem by amending the client’s tax return.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1-2 Elements of Tax Practice: Tax Planning
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 7:59 PM
DATE MODIFIED: 12/18/2023 7:59 PM
5. Which of the following statements best describes Circular 230?
a. Circular 230 has been adopted by the AICPA as its set of rules of practice for CPAs.
b. Circular 230 is a set of Treasury Department ethical and legal standards for those engaging in
practice before the IRS.
c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from
unfair discipline by the IRS.
d. Circular 230 is a set of ethical rules for taxpayers.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:00 PM
DATE MODIFIED: 12/18/2023 8:00 PM
6. Who can represent a taxpayer before the IRS Appeals Office under Circular 230?
a. a CPA
b. an officer of a corporation may represent the corporation
c. an attorney
d. all of these are correct.
e. both a CPA and an attorney
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 01 - Introduction to Tax Practice and Ethics
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:01 PM
DATE MODIFIED: 12/18/2023 8:01 PM
7. In a closed transaction, the scope of tax planning is:
a. more limited as compared to an open transaction
b. limited by the IRS rules of practice
c. limited to presenting the taxpayer’s facts to the government in the most favorable, legal
manner
d. more limited as compared to an open transaction and limited to presenting the taxpayer’s facts
to the government in the most favorable, legal manner
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1-2 Elements of Tax Practice: Tax Planning
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.1 - Describe the elements of modern tax practice in the
United States
DATE CREATED: 12/18/2023 8:02 PM
DATE MODIFIED: 12/18/2023 8:02 PM
8. Circular 230 includes rules on all of the following topics EXCEPT:
a. who is authorized to practice before the IRS
b. standards for “covered opinions”
c. compliance with state ethical requirements
d. a set of best practices to guide practitioners
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:03 PM
DATE MODIFIED: 12/18/2023 8:04 PM
9. Statements on Standards for Tax Services (SSTS) contain advisory guidelines for:
a. members of the AICPA
b. enrolled agents
c. attorneys
d. IRS authorities
e. all of these are correct.
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 01 - Introduction to Tax Practice and Ethics
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:05 PM
DATE MODIFIED: 12/18/2023 8:06 PM
10. An EA must renew his or her enrollment card on a:
a. 5-year cycle
b. 3-year cycle
c. 2-year cycle
d. Renewal is not required once an EA gets a card
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-6 Rules and Ethics in Tax Practice: National Association of Enrolled
Agents (NAEA) Rules of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:06 PM
DATE MODIFIED: 12/18/2023 8:07 PM
11. Under Section 10.3, Subpart A, of Circular 230, the following individuals may practice before the IRS
EXCEPT:
a. unenrolled agents
b. enrolled agents
c. enrolled actuaries
d. enrolled retirement plan agents
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:07 PM
DATE MODIFIED: 12/18/2023 8:09 PM
12. Due diligence, in essence, means a tax practitioner:
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 01 - Introduction to Tax Practice and Ethics
a. must be efficient in performing his duties
b. must give due respect to IRS officials
c. should use reasonable effort to comply with the tax laws
d. should charge reasonable fees for work performed for a client
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:09 PM
DATE MODIFIED: 12/18/2023 8:10 PM
13. A contingent fee is:
a. always allowed by Circular 230
b. a fee that is out of line with the value of the service provided
c. a fee based on a percentage of a taxpayer’s refund on a tax return
d. all of these are correct
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:10 PM
DATE MODIFIED: 12/18/2023 8:11 PM
14. According to Circular 230, the “best practices” rules are:
a. mandatory for all tax practitioners
b. restricted only to attorneys and CPAs
c. Aspirational meaning they set goals for tax practitioners
d. enforced by disbarment from practice before the IRS
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-1 Rules and Ethics in Tax Practice: Circular 230
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:11 PM
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,Chapter 01 - Introduction to Tax Practice and Ethics
DATE MODIFIED: 12/18/2023 8:11 PM
15. The six principles of professional conduct under the AICPA Code include:
a. responsibilities
b. public interest
c. integrity
d. all of these are correct
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:12 PM
DATE MODIFIED: 12/18/2023 8:12 PM
16. Under the AICPA Code of Professional Conduct, which of the following actions would constitute
deceptive advertising?
a. advertising too frequently
b. implying that the CPA had the ability to influence an IRS official
c. promising a favorable result without justification
d. implying that the CPA had the ability to influence an IRS official and promising a favorable
result without justification
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-2 Rules and Ethics in Tax Practice: AICPA Code of Professional Conduct
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:13 PM
DATE MODIFIED: 12/18/2023 8:14 PM
17. Under Statements on Standards for Tax Services No. 2 (SSTS No. 2), a CPA preparing a tax return
should perform all of the actions EXCEPT:
a. independently confirm the accuracy of the taxpayer’s information
b. obtain additional information if the taxpayer’s information appears to be incorrect or
incomplete
c. review the prior year’s return when feasible
d. determine when conditions for a deduction have been met
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
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,Chapter 01 - Introduction to Tax Practice and Ethics
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:14 PM
DATE MODIFIED: 12/18/2023 8:15 PM
18. Which of the following is CORRECT about a CPA’s responsibility with regard to tax return positions
under Statements on Standards for Tax Services No. 2 (SSTS No. 2)?
a. A CPA may not base his or her position on authority not approved by the IRS under Section
6662 (accuracy-related penalty).
b. A CPA may sign a return with a tax position with a realistic possibility of being sustained on
the merits.
c. A CPA may not sign a return with any tax position that is not fully disclosed.
d. All of these are correct.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:15 PM
DATE MODIFIED: 12/18/2023 8:16 PM
19. The Statements on Standards for Tax Services (SSTS) are issued by:
a. the Internal Revenue Service
b. the FASB
c. the AICPA
d. the American Bar Association
e. the AICPA and the American Bar Association jointly
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax
Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:22 PM
DATE MODIFIED: 12/18/2023 8:24 PM
20. The Statements on Standards for Tax Services are:
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, Chapter 01 - Introduction to Tax Practice and Ethics
a. part of the ABA Code of Professional Responsibility
b. intended to replace Circular 230
c. intended to supplement the AICPA Code of Professional Conduct and Circular 230
d. none of these are correct
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 2-3 Rules and Ethics in Tax Practice: Statements of Standards for Tax Services
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical standards that
engage in tax practice
DATE CREATED: 12/18/2023 8:24 PM
DATE MODIFIED: 12/18/2023 8:25 PM
21. Which of the following statements best explains the need for tax practitioners to understand
nonregulatory ethical models of behavior?
a. Competing ethical solutions must be resolved by the courts.
b. There is more to ethical behavior than just following the rules of professional organizations.
c. Practitioners must always choose the action with the greatest benefit for their client.
d. Ethical choices are clearly spelled out by IRS regulations.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 3-2 Nonregulatory Ethical Behavioral Models: Ethical Professional Behavior
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
standards that guide those who engage in tax practice
DATE CREATED: 12/18/2023 8:25 PM
DATE MODIFIED: 12/18/2023 8:26 PM
22. The primary change made by the Sarbanes-Oxley Act and affecting the practice of public accounting
is:
a. Public accounting firms may no longer provide any actuarial services.
b. Accounting firms may no longer offer tax shelters.
c. Auditors may never do tax compliance work for their clients.
d. Public accounting firms may provide some nonaudit services to their audit clients if an audit
committee approves the services in advance.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 2-4 Rules and Ethics in Tax Practice: Sarbanes-Oxley and Taxation
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: FETR.SAWY.25.1.2 - Explain and apply the sources of legal and ethical
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