Ethics 23 Section 2
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Feb 20, 2024
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Test - U.S. Tax 2023 - Ethics - Exam Time remaining Section 2 Question 6 of 30. Failure to comply with a single due diligence requirement may result in a tax preparer penalty of how much per return not in compliance for tax returns prepared in 2023? O $5,000 O $1,000 ® 3560 O ¢545 (J Mark for follow up Question 7 of 30. Beth Ann meets all the qualifying child tests for both her mother and grandmother and both would like to claim her on their tax returns. Her mother's AGl is $17,000. Her grandmother's AGl is $27,000. Applying the tie breaker rules, should you prepare a return for her grandmother claiming Beth Ann as qualifying child and claim the EIC? O Yes, the grandmother can claim Beth Ann as a qualifying child and claim EIC because her AGl is higher. O No, the grandmother cannot claim Beth Ann as a qualifying child and thus also claim the EIC because the mother holds a higher right than the grandmother. @ Yes, the grandmother can claim Beth Ann as a qualifying child and claim the EIC, but only if she files before the mother. O No, the grandmother cannot claim Beth Ann as a qualifying child and thus cannot claim the EIC because she is not her parent. (J Mark for follow up Question 8 of 30. Ruth is eligible to claim the EIC based on Rachel (7), her granddaughter and qualifying child. Rachel's mother, Petra, is also eligible and plans to claim Rachel as a qualifying child for the EIC. Rachel does not provide more than 50% of her own support and lived in a home with both Ruth and Petra for the entire year. Everyone is a U.S. citizen with social security numbers received before the due date of the return. Ruth's income all from wages is $43,500. Petra's earned income is $36,753. Which of the following statements is accurate? @ Ruth may claim the EIC based on Rachel if her AGl is higher than Petra's and if she files first. O Petra holds the higher right and may claim the EIC based on Rachel because Petra is Rachel's parent. O Ruth and Petra may agree to each claim one-half of the EIC based on Rachel, who is a qualifying child for each of them. O As long as Ruth files before Petra, she may claim Rachel for purposes of the EIC. (J Mark for follow up Question 9 of 30. Glenn is 57 years old and states he wishes to claim his son, Evan, age 35, as his dependent and wants to claim the EIC. Evan is totally and permanently disabled, has no income, did not provide more than 50% of his own support, and is single. Given these facts, what should the tax preparer do? O Explain that a 35-year-old child is too old to be a qualifying child for the EIC. O Ask for proof of the child's name and age. O Advise the taxpayer that his son meets the definition to be a qualifying relative, not a qualifying child, and will not qualify him for the EIC. @ Advise the taxpayer of the tax definition of permanently and totally disabled and apply sound judgment and common sense to see if the definition is met and if all requirements for Evan to be a qualifying child are met. (J Mark for follow up Question 10 of 30. To comply with paid preparer due diligence requirements, it is not enough to ask more questions; tax preparers must also: O Audit the return. O Ask clients for two references to verify the information. O Perform employment verification checks on all EIC clients. @ Contemporaneously document the questions asked and the client's responses. (J Mark for follow up Question 11 of 30. A tax preparer should ask more questions and document responses whenever the client's information seems: @® Incorrect, inconsistent, or incomplete. O Ordinary and necessary. O Reasonably accurate. O Irrefutable. (J Mark for follow up [ « Back ] [ Save / Return Later ] [ Summary ] [ Next » ]
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