Practice Quiz

RTRP - IRS Registered Tax Return Preparer Test

Category - Enrolled Agent

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Margaret Smith is a CPA who is representing John & Mary Jones before the Wage and Investment Division of the Internal Revenue Service. The Service is questioning John & Mary on contributions that were listed on page 2 of their 2004 Form 1040. While reviewing the documentation provided by John & Mary, Margaret discovers contributions that were made to a non-qualified organization. What is the appropriate action for Margaret to take?
  1. Margaret must advise John & Mary on how to keep the omission from being discovered by the IRS.
  2. Margaret must notify the Internal Revenue Service that she is no longer representing John & Mary by withdrawing her Form 2848.
  3. Margaret must advise John & Mary promptly of the omission and the consequences provided by the Internal Revenue Code and Regulations for such omission.
  4. Margaret must immediately advise the Internal Revenue Service examiner of the non-qualified contributions.
Explanation
Answer: C - Margaret must advise John & Mary promptly of the omission and the consequences provided by the Internal Revenue Code and Regulations for such omission.
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