1.
A taxpayer sold gifted stock at a loss; donor’s basis exceeded FMV at gift date. Which basis rules apply?
2.
A corporation buys machinery and asks about §179 vs bonus depreciation in year one.
3.
A company contemplates a like-kind exchange of business real property. Current treatment?
4.
Can you rely solely on a client’s statements?
5.
The taxpayer received a 90-day Letter (Notice of Deficiency) but missed the Tax Court deadline. What option may still be available?
6.
Above-the-line (adjustment) deductions vs. itemizing—what’s the key difference?
7.
A W-2 wage earner with foreign stocks held via a U.S. broker had foreign tax withheld on dividends. Any mitigation?
8.
A teacher with small educator expenses, HSA-eligible coverage, and a side gig asks which are typical adjustments to income.
9.
A small manufacturer capitalizes direct labor and factory overhead into inventory. They ask what UNICAP requires.
10.
You’re preparing a complex return. The client’s organizer omits several 1099s shown in last year’s transcript, and some numbers contradict bank statements. Under Circular 230, what must you do before filing?
11.
A corporation redeems a shareholder’s stock for cash. When is it treated as sale/exchange (capital) vs dividend?
12.
Ex parte communication rules in Appeals mean:
13.
A business uses the cash method and receives prepayment for services next year. Federal tax treatment?
14.
You discover a conflict of interest representing two spouses during an audit. They both want you to continue. What must happen?
15.
What constitutes willful or reckless conduct for preparer-penalty purposes?
16.
Confidentiality rules allow disclosure of client information when:
17.
Sole shareholder-employee takes no wages in a profitable S-corp year. Risk?
18.
Appeals conference formats typically include:
19.
A C-corp converts to S-status while holding appreciated assets and plans to sell them soon. What risk exists?
20.
A partnership pays a partner a fixed monthly amount for bookkeeping, regardless of profits. Treatment?
21.
A taxpayer asks how to optimize filing status and avoid penalties after a mid-year separation and under-withholding.
22.
Donating appreciated stock (>1-year holding) to a public charity—what’s the deduction base?
23.
High-level description of the QBI deduction for a pass-through owner.
24.
A crypto investor traded BTC→ETH and later sold ETH for USD at a gain. How to report?
25.
Which form is used for injured spouse allocation when a joint refund is offset to the other spouse’s debt?
26.
A retailer wants to change inventory method mid-year without filing anything.
27.
A taxpayer wants you to represent them in an office audit for Form 1040 Schedule C. Which authorization is correct and what does it permit?
28.
A retailer has $900,000 gross receipts and $540,000 COGS. Before other items, what is gross income from sales?
29.
A partner contributed $60,000 cash and personally guaranteed $140,000 of nonrecourse debt. The partnership reports a $90,000 loss. The partner asks how much they can deduct.
30.
An S-corp shareholder receives distributions exceeding their stock basis. What result?
31.
Exam proposes a deficiency. Your client disputes the facts and law and wants Appeals review. What is Appeals’ role?
32.
May you charge a contingent fee for representing a client in a claim for refund based on a carryback?
33.
A taxpayer took an early traditional IRA distribution but qualifies for an exception (e.g., certain medical, first-home, education). What must they do?
34.
Net long-term capital gains are generally taxed…
35.
A homeowner meets the 2-out-of-5-year ownership and use tests when selling a principal residence at a large gain.
36.
Why is the QBI deduction “below the line”?
37.
A partner receives a nonliquidating distribution of inventory. Immediate gain?
38.
An S-corp sells §1231 property at a net gain. How is it reported to shareholders?
39.
Which form requests innocent spouse relief from joint liability due to the other spouse’s erroneous items?
40.
Must a reseller capitalize purchasing/handling/storage into inventory?
41.
A factory replaces a worn motor with a like-kind part that restores normal function. Capitalize or expense?
42.
A single filer has wages (W-2), bank interest (1099-INT), and casino winnings (W-2G). Which items are included in gross income?
43.
For which items are preparer due-diligence penalties especially targeted?
44.
C-corp distributions and E&P—character to shareholders?
45.
Advertising standards under Circular 230 require that your marketing:
46.
A dependent student asks about the standard deduction and personal exemption on their own return.
47.
The client asks for all original records back. They still owe your invoice. What must you do?
48.
A 19-year-old full-time student claimed as a dependent has $6,000 in dividends and $2,000 in wages. They ask how the unearned income is taxed.
49.
Your client missed the filing deadline after a car accident and hospitalization; medical records confirm. They request penalty abatement. Which is true?
50.
Where are IRS summons enforcement actions brought?
51.
Currently Not Collectible (CNC) status indicates:
52.
When should you contact the Taxpayer Advocate Service (TAS)?
53.
An S-corp’s AAA (accumulated adjustments account) is negative but it has E&P from C-corp years. Distribution order?
54.
A hobbyist sells handmade items sporadically, breaks even, and wants to deduct hobby expenses.
55.
A taxpayer thinks foreign stocks via a U.S. broker mean no FBAR risk.
56.
Your client asks about an installment agreement (IA). Which statement is accurate?
57.
After selling depreciated equipment at a gain, how is the gain characterized?
58.
Audit reconsideration is appropriate when:
59.
When does the Net Investment Income Tax (NIIT) apply?
60.
A manufacturer considers §199A QBI and has significant W-2 wages and UBIA (qualified property). Why do these matter?
61.
Written advice standards (Circular 230 §10.37) require you to:
62.
A student’s scholarship pays tuition, mandatory fees, required books from the campus bookstore, and a separate housing stipend. What’s the federal tax treatment?
63.
A valid POA (Form 2848) must specify:
64.
Electronic client records requested by the IRS must be:
65.
A cash-basis Schedule C taxpayer asks about the de minimis safe harbor.
66.
Material participation for a member who worked 100 hours when no one else worked more—what matters?
67.
The federally authorized tax practitioner privilege under §7525 applies to:
68.
An investor sells stock at a loss on June 15 and buys substantially identical shares on July 5 in the same account. They want to deduct the loss this year.
69.
When do preparer penalties arise?
70.
A partnership sells land (capital asset) held for investment at a gain. How is it reported to partners?
71.
A partnership distributed cash exceeding a partner’s outside basis. Consequence?
72.
A taxpayer changed jobs mid-year and under-withheld. How to avoid underpayment penalties?
73.
Incompetence or disreputable conduct may result in:
74.
In an identity theft case, what helps prevent fraudulent e-filing in future years?
75.
When may you rely on client information without further verification?
76.
Collection Information Statement for individuals (used for OIC/IAs) is typically:
77.
A partner contributes appreciated property to a partnership; later, that property is sold at a gain. Who is taxed on the built-in gain?
78.
A child inherits company stock and sells it six weeks after the decedent’s death at a gain.
79.
A business converts a warehouse to a restaurant and capitalizes build-out costs. Which cost recovery generally applies?
80.
A joint refund is fully offset to the husband’s old federal student loan debt. The wife had her own income and withholding. What’s her immediate remedy?
81.
Why can’t a business deduct all interest currently?
82.
An LLC with long-term rentals and minimal services reports losses. Why are losses limited?
83.
SALT payments are large, but mortgage interest/charity are small. Itemize or take the standard deduction?
84.
Proper written advice should:
85.
The general statute of limitations for assessment (absent fraud/large omission/consent) is:
86.
A joint return overpayment was offset to the spouse’s past due debt; the non-debtor spouse asks for relief.
87.
The Trust Fund Recovery Penalty (TFRP) applies to:
88.
An S-corporation with two shareholder-employees (each 50%) provides software implementation services. In the first profitable year, they want to minimize payroll tax by taking only distributions and no wages. What is the best course of action?
89.
A sole proprietor reports $120,000 Schedule C profit. Which additional tax may apply?
90.
Employer provided car used 70% business, 30% personal. What records are needed?
91.
May you charge a contingent fee in connection with an IRS refund claim?
92.
A partner’s outside basis is $5,000. The partnership allocates $7,000 of loss. Partner materially participates. How much is currently deductible?
93.
Due-diligence checklists/forms for credits must be:
94.
A taxpayer lived apart from their spouse for the last 6 months of the year, maintained a home for a 7-year-old child who lived with them more than half the year, and paid over half the home’s costs. They ask which status provides the most favorable outcome.
95.
A taxpayer wonders why educator expenses, SE health insurance, and HSA contributions mattered so much.
96.
A prospective client offers you a contingent fee to prepare an original Form 1040 that they believe will yield a large refund. Under Circular 230, what’s correct?
97.
A company sells business real property at a loss after holding >1 year. Treatment?
98.
A contractor receives per-diem reimbursements under an accountable plan with proper substantiation.
99.
E-file signature authorization for individual returns is:
100.
A reseller with average gross receipts under the small-business threshold asks whether UNICAP applies.
