📏CPA EXAM PREP

Ethics and Federal Tax Procedures

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Question

How can a taxpayer avoid the estimated-tax penalty?

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Answer

Pay the lesser of 90% current-year tax or 100% prior-year tax.

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Question

What does Circular 230 govern in tax practice?

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Answer

Who may practice before the IRS and their duties.

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Question

Why must a practitioner make reasonable inquiries about client information?

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Answer

Because good-faith reliance ends when information looks incorrect or incomplete.

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Question

How must a practitioner respond to a client error on a return?

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Answer

Promptly notify the client; no duty to correct without consent.

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