Chapter 4: Circular 230 and Its Importance
This chapter explains the significance of Circular 230, which sets the ethical and professional standards for tax preparers. It details the key provisions, including competence, due diligence, and client confidentiality, while outlining the penalties for non-compliance. Understanding Circular 230 is crucial for maintaining integrity and professionalism in tax practice.
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1.
A client insists that you file a return with incorrect information to reduce their tax liability. According to Circular 230, what should you do?
2.
You realize that you are not fully knowledgeable about a specific tax issue your client needs help with. What does Circular 230 advise?
3.
You’ve prepared a return for a client, but a mistake you made earlier may cause the return to be incorrect. What should you do, according to Circular 230?