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