Janice, a taxpayer is contemplating splitting her tax refund between her qualified accounts. Her tax practitioner explains Form 8888. Which statement is incorrect?
a. Form 8888 can be filed electronically.
b. Providers cannot charge a separate fee for filing Form 8888.
c. Qualified accounts include checking, savings, IRA’s MSA and HAS.
d. The refund can be deposited in up to four accounts that are in the taxpayer’s name.
Nick, age 21, lives with his grandmother and is in his 3rd year of college. In 2017, Nick’s father made direct payments, totaling $8,575, to the local community college for Nick’s tuition. Nick’s grandmother will claim Nick as a dependent on her tax return for tax year 2017. Although Nick’s grandmother has earned income and is required to file a return, she has no tax liability. Nick meets all requirements of both education credits. Which education credit, if any, will Nick’s grandmother be eligible to claim and what is the amount, if any, she will be allowed to claim?
a. Lifetime Learning Credit, $0 credit allowed.
b. AOC, $1,000 as a refundable credit
c. Lifetime Learning Credit, $1,715 credit allowed
d. AOC, $2,500 as a refundable credit
Wanda, a paid tax preparer, prepares returns for a number of lower income families who receive the earned income credit. To exercise due diligence, she needs to do what when filing returns with EIC?
a. Wanda needs to prepare and file Form 8862
b. Wanda needs to prepare andfile Form 8867
c. Wanda needs to preparr and file Form 8879
d. Wanda needs to file copies of the Children’s birth certificates
Which of the following situations is more likely to result in a security incident?
a. Joe’s client comes in while he is working on a return. Joe doesn’t see the client until he is approximately 6 feet away from his desk. Joe stops the client and asks him to wait in the lobby while he cleans off his desk.
b. Joe needs to finish a return, but has to go home to be with his children. He email copies of the client’s documents to himself so he can login to the tax software to finish the return.
c. Joe is working with a client, when another client calls in to provide additional information about his return. Joe places the caller on hold, locks his computer and goes to another desk to take the caller’s information.
d. Joe doesn’t like the fact that his computer locks after 5 minutes of inactivity; therefore, he extended the lock time to 8 minutes.
Much of Doreen’s client base is made up of lower income families that receive the earned income credit. In an effort to practice due diligence pertaining to the earned income credit, which of the following forms must Doreen complete for these clients?
a. Form 1040
b. Form W-5
c. Form 8862
d. Form 8867
David has never electronically filed his return before and now he is concerned whether the IRS has received it or not. Which of the following is correct?
a. The IRS electronically acknowledges the receipt of all transmissions.
b. Upon receipt of a paper signature for the e-filed return, IRS will acknowledge receipt of the transmission.
c. Upon receipt of supporting paper documents, IRS will acknowledge receipt of the transmission.
d. IRS will not acknowledge that they have received an electronically filed return unless the return is rejected by them for a specific reason.
Jeremy, a paid practitioner, has to follow certain criteria regarding signing a tax return that he has completed. Which statement incorrectly explains the criteria to follow?
a. The paid practitioner is responsible for signing the return he prepared. He can sign it manually, by rubber stamp, computer software or mechanical device.
b. The paid practitioner is personally responsible for affixing his signature.
c. The paid practitioner who fails to sign a return can be fined $50 per return, up to $25,000 per year.
d. The paid practitioner who fails to sign a return can be fined $500 per return, up to $25,000 per year.