Choosing a Tax Preparer

Question 1

What unique number must anyone who is paid to prepare federal tax returns obtain from the IRS?

Accepted Answer

A Preparer Tax Identification Number (PTIN)

Answer

A Social Security Number only

Answer

A state business license number

Answer

An Electronic Filing Identification Number (EFIN) only

Question 2

What is a paid preparer legally required to do on every return they prepare for compensation?

Accepted Answer

Sign the return and include their PTIN

Answer

Leave the paid preparer section blank

Answer

Have the taxpayer sign as the preparer

Answer

Attach a copy of their driver's license

Question 3

Which three types of tax professionals have unlimited representation rights before the IRS?

Accepted Answer

Attorneys, CPAs, and enrolled agents

Answer

Bookkeepers, notaries, and tax preparers

Answer

Only IRS employees and attorneys

Answer

AFSP participants, CPAs, and notaries

Question 4

What does it mean to have unlimited representation rights before the IRS?

Accepted Answer

The professional can represent any client on any tax matter, including audits, collections, and appeals

Answer

The professional can only prepare returns but not represent anyone

Answer

The professional can represent only clients whose returns they prepared

Answer

The professional can represent clients only in tax court

Question 5

What is an enrolled agent?

Accepted Answer

A federally authorized tax practitioner licensed by the IRS who has demonstrated competence in tax matters

Answer

A preparer licensed only by an individual state

Answer

A volunteer who prepares returns for free at IRS sites

Answer

An IRS auditor who reviews completed returns

Question 6

How does a person typically earn the privilege of becoming an enrolled agent?

Accepted Answer

By passing a three-part comprehensive IRS exam or through qualifying experience as a former IRS employee

Answer

By paying a one-time fee with no testing

Answer

By holding a state law license

Answer

By preparing at least 100 returns in a year

Question 7

According to the IRS, what is the highest credential the agency awards?

Accepted Answer

Enrolled agent status

Answer

Annual Filing Season Program record of completion

Answer

A PTIN

Answer

Registered tax preparer status

Question 8

What is the IRS Directory of Federal Tax Return Preparers used for?

Accepted Answer

To help taxpayers find preparers with certain credentials and qualifications

Answer

To list every paid preparer in the country

Answer

To report preparers who committed fraud

Answer

To apply for a PTIN

Question 9

Which preparers are included in the IRS Directory of Federal Tax Return Preparers?

Accepted Answer

Attorneys, CPAs, enrolled agents, and certain others with credentials or an AFSP record of completion

Answer

Every person who holds a PTIN

Answer

Only enrolled agents

Answer

Anyone who has ever prepared a return for pay

Question 10

What is true about the Annual Filing Season Program (AFSP)?

Accepted Answer

It is a voluntary program for non-credentialed preparers who complete continuing education

Answer

It is a mandatory license for all paid preparers

Answer

It grants unlimited representation rights

Answer

It replaces the requirement to have a PTIN

Question 11

What kind of representation rights do Annual Filing Season Program participants have?

Accepted Answer

Limited rights, only for clients whose returns they prepared and signed and only before certain IRS employees

Answer

Unlimited rights equal to attorneys and CPAs

Answer

No representation rights at all

Answer

Rights to represent any client in IRS appeals

Question 12

A PTIN holder with no professional credential and no AFSP record of completion is permitted to do what?

Accepted Answer

Only prepare tax returns, not represent clients before the IRS

Answer

Represent clients in audits and appeals

Answer

Represent any client on any matter

Answer

Sign returns without including a PTIN

Question 13

What is a ghost tax return preparer?

Accepted Answer

A paid preparer who prepares a return but refuses to sign it

Answer

A preparer who works only during the off-season

Answer

A volunteer at an IRS-sponsored site

Answer

An enrolled agent who works remotely

Question 14

Why is a preparer who refuses to sign your return a red flag?

Accepted Answer

The law requires paid preparers to sign, so refusing often signals a quick-profit scheme

Answer

Signing is optional for experienced preparers

Answer

Only the taxpayer is ever required to sign

Answer

Refusing to sign lowers the preparation fee

Question 15

Which fee arrangement is considered a red flag when choosing a preparer?

Accepted Answer

A fee based on a percentage of your refund

Answer

A flat fee agreed to in advance

Answer

An hourly rate disclosed up front

Answer

A fee based on the complexity of the return

Question 16

Where should your tax refund be deposited?

Accepted Answer

Into a bank account in your own name

Answer

Into the preparer's bank account

Answer

Into any account the preparer chooses

Answer

Into a temporary IRS holding account

Question 17

What should you do if a preparer asks you to sign a blank or incomplete tax return?

Accepted Answer

Refuse, because you should never sign a blank or incomplete return

Answer

Sign it to save time and trust the preparer

Answer

Sign it only if the refund looks large

Answer

Sign it as long as the preparer also signs

Question 18

Who is ultimately responsible for the accuracy of everything reported on your tax return?

Accepted Answer

You, the taxpayer, even if someone else prepared it

Answer

Only the paid preparer who signed it

Answer

The IRS, since it processes the return

Answer

The software company that produced the return

Question 19

Which IRS form is used to report tax return preparer misconduct?

Accepted Answer

Form 14157, Complaint: Tax Return Preparer

Answer

Form 1040, U.S. Individual Income Tax Return

Answer

Form W-9, Request for Taxpayer Identification Number

Answer

Form 4506, Request for Copy of Tax Return

Question 20

Which form should you file if a preparer filed or changed your return without your knowledge or consent?

Accepted Answer

Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit

Answer

Form 14157 only, with no affidavit

Answer

Form 8888, Allocation of Refund

Answer

Form 2848, Power of Attorney

Question 21

What is a smart step to take before hiring a preparer regarding their availability?

Accepted Answer

Confirm they will be reachable after filing to answer questions about your return

Answer

Make sure they only work during tax season

Answer

Choose one who never provides a copy of the return

Answer

Pick whoever promises the fastest refund

Question 22

What should a good preparer ask to see before completing your return?

Accepted Answer

Your records and receipts, and questions to determine income, deductions, and credits

Answer

Only your prior-year refund amount

Answer

Nothing, since they can estimate everything

Answer

Only your bank account login

Question 23

How can you verify the license status of a preparer who claims to be an attorney?

Accepted Answer

Check with the state bar association

Answer

Check with the State Board of Accountancy

Answer

Search the PTIN application database

Answer

Call the local IRS walk-in office

Question 24

Is every paid preparer who holds a valid PTIN listed in the IRS preparer directory?

Accepted Answer

No, the directory includes only those with certain credentials or an AFSP record of completion

Answer

Yes, all PTIN holders are automatically listed

Answer

Yes, but only enrolled agents are listed

Answer

No, the directory lists only preparers who were disciplined

Question 25

After your return is prepared, what should a reputable preparer provide to you?

Accepted Answer

A copy of the completed return

Answer

A blank return for you to fill out yourself

Answer

Only a verbal summary of the results

Answer

Nothing until the refund arrives