- Which of the following must the EA do before using this client information for the advertisement?
Answer: Obtain each client's consent, signed and dated by the client, that names the EA and the client, describes the intended use, and specifies the information to be used.
IRC § 7216 and Treas. Reg. §§ 301.7216-2(n) and 301.7216-3(a). A tax return preparer may not use tax return information, which includes contact information a client gives in connection with return preparation, for any purpose other than preparing the return unless an exception applies or the taxpayer gives a knowing and voluntary written consent, signed and dated, that names the preparer and the taxpayer, describes the use, and specifies the information. The decisive fact is the product. The § 301.7216-2(n) list exception lets a preparer contact clients to solicit more tax return preparation services, but not to solicit any other service or product, so marketing insurance and annuities requires consent. Choice A is correct. Choice B is wrong because § 7216 restricts the preparer's own use of the information, not only disclosure to others. Choice C is wrong because an opt-out notice is not the affirmative signed consent the regulation requires. Choice D is wrong because Form 8879 is only an e-file signature authorization, not a § 7216 consent.
- Which action may the EA take with respect to e-filing this return?
Answer: Wait to transmit until both spouses have signed Form 8879; the wife's e-mail is not a valid signature authorization.
Form 8879 instructions and IRS Pub. 1345, Handbook for Authorized IRS e-file Providers, require each taxpayer to sign the e-file signature authorization before the return is transmitted, and a joint return requires both spouses' signatures. The wife's e-mail does not satisfy the Form 8879 signature requirement, and the EA has no power of attorney, so the EA must withhold transmission until she signs. Choice A is wrong because one spouse's signature does not authorize e-filing of a joint return. Choice B is wrong because the taxpayer herself must provide the e-file signature; the EA may not enter a self-selected PIN for her based on e-mailed data. Choice C is wrong because the EA may not sign Form 8879 for the wife without a valid power of attorney, and none exists here.
- Which of the following is correct regarding the filing of this return?
Answer: The return is treated as timely filed, because the rejected return was submitted before the due date and the corrected return was resubmitted by the fifth calendar day after the due date.
Pub. 1345, Resubmission of Rejected Tax Returns. An e-filed return is not filed until the IRS accepts it, but a rejected individual income tax return that was submitted on or before the due date is considered timely filed if the taxpayer corrects the electronic portion and resubmits it by the fifth calendar day after the due date. The return was submitted April 14, rejected, and resubmitted and accepted April 16, before the April 20 cutoff. Choice A is correct. Choice B is wrong because it applies the acceptance-date rule and ignores the resubmission rule for a timely submitted return. Choice C is wrong because it treats the ERO's duty to tell the taxpayer about an uncorrectable rejection within 24 hours as a filing deadline. Choice D is wrong because a paper return is needed only when the electronic return is not corrected and resubmitted, or cannot be accepted.
- Which of the following is correct regarding an Electronic Filing Identification Number (EFIN)?
Answer: An EFIN is not transferable, and a new owner of a firm must submit an IRS e-file application and obtain a new EFIN.
IRS Pub. 3112, IRS e-file Application and Participation. The IRS assigns an EFIN to the firm whose IRS e-file application it approves, and a separate EFIN is required for each fixed location from which the firm originates electronic returns. An EFIN is not transferable. A provider may not sell or transfer its EFIN when it sells, transfers or gives away the business; the new owner must submit its own IRS e-file application and obtain its own EFIN. Choice B is correct. Choice A is wrong because an EFIN belongs to the approved firm, not to an individual preparer, and it does not follow a preparer who joins another firm; the preparer's PTIN is a separate identifier. Choice C is wrong because an EFIN cannot be transferred even with IRS approval or the new owner's written agreement; the new owner must apply. Choice D is wrong because an EFIN is tied to a fixed location; each additional fixed location from which the firm originates electronic returns requires a new application and its own EFIN.
- On April 13, 2026, an ERO completed a married couple's 2025 Form 1040. Both spouses want to e-file. The husband signs Form 8879 in the office; the wife, who is out of town, telephones the ERO, states her PIN, and says she authorizes the filing. The ERO records the call. Which action is correct?
Answer: Do not transmit until the wife has signed Form 8879; both spouses must sign the authorization before the return is submitted.
Authority: Form 8879 instructions; Pub. 1345. For a joint e-filed return, each spouse must sign the IRS e-file signature authorization before the return can be transmitted. A phone call and a PIN do not replace the signed Form 8879. Choice A treats oral consent as a signature, which the IRS does not accept for this purpose. Choice C is wrong because Form 8453 does not excuse an absent spouse's signature. Choice B is wrong because the paper return must be signed by both spouses, and a note stating a PIN is not a signature.
- An ERO transmitted a taxpayer's 2025 Form 1040 on April 14, 2026. The IRS rejected it that evening because the taxpayer's Social Security number did not match SSA records. The ERO obtained the correct number and retransmitted the return on April 20, 2026; the IRS accepted it the same day. Which statement is correct?
Answer: The return is timely, because a rejected return submitted by the due date is timely if it is corrected and resubmitted by the fifth calendar day after the due date.
Governing authority: IRS Pub. 1345, Resubmission of Rejected Tax Returns. A rejected individual return that was submitted on or before the due date will be considered timely filed if the taxpayer corrects the electronic portion and resubmits the return by the fifth calendar day after the due date. The due date was April 15, 2026, so the fifth calendar day was April 20, and the corrected return was resubmitted and accepted that day. Choice A is correct. Choice B invents a condition: Pub. 1345 asks for an explanation of the late date only on a paper return filed after a rejection, not on an electronic resubmission. Choice C ignores the resubmission rule: although a rejected return is not filed, a timely submitted return corrected within the five-day window is treated as timely. Choice D misstates the timing: the five calendar days run from the due date, not from the original transmission.
- Which statement is correct regarding e-filing returns from the second office?
Answer: The firm must obtain a separate EFIN for the second office before e-filing from that location; the transmitter's EFIN does not cover the firm's returns.
Pub. 3112 and the IRS e-Services e-file application rules assign an EFIN to a specific firm location, and each office that originates e-filed returns must have its own EFIN. The firm may not e-file from the second office until that EFIN is approved. The transmitter's EFIN covers only the transmission service and does not make the firm an authorized e-file provider. Choice A is wrong because an EFIN is location-specific rather than entity-wide. Choice C is wrong because the transmitter's authorization does not make the firm an authorized e-filer. Choice D is wrong because the EFIN is obtained by the firm for the location; individuals use PTINs, not EFINs.
- Which of the following is correct regarding this e-filed return?
Answer: The return was not properly e-filed because the client must sign Form 8879 after reviewing the completed return, and a change after signing that exceeds the Pub. 1345 tolerances requires a new Form 8879.
IRS Pub. 1345 and the Form 8879 instructions require the ERO to give the taxpayer a copy of the completed return and obtain the taxpayer's signed and dated Form 8879 after the return is complete but before transmission; if the return data changes after the taxpayer signs by more than $50 to total income or AGI, or by more than $14 to total tax, withholding, refund or amount owed, the taxpayer must sign a new Form 8879. Choice C is correct. Choice A is wrong because a signature obtained before the return was completed does not authorize the final return. Choice B is wrong because the taxpayer, not the preparer, must approve the completed return. Choice D is wrong because the ERO retains Form 8879 and does not mail it to the IRS; Form 8453 is the paper transmittal used for documents that cannot be e-filed.
- Which statement is correct regarding her obligation to file these returns electronically?
Answer: She is not required to e-file the nine paid returns because only returns prepared for compensation count toward the 10-return threshold, and the VITA returns are excluded.
Treas. Reg. § 301.6011-7; IRC §§ 6011(e)(3) and 7701(a)(36). A tax return preparer, a person who prepares returns for compensation, must e-file individual income tax returns unless the preparer, counting returns of the members of the preparer's firm, reasonably expects to file 10 or fewer of them in the calendar year; the mandate applies at 11 or more. Returns prepared without compensation, such as VITA returns, are not prepared by a tax return preparer and do not count. With only nine compensated returns expected, the EA is not a specified tax return preparer. Choice C is correct. Choice A is wrong because uncompensated VITA returns are excluded from the count. Choice B is wrong because VITA returns are not counted under the mandate, and the threshold applies to the preparer's compensated returns as a whole, not separately by category. Choice D is wrong because the mandate is volume-based and does not apply by credential alone.
- In February 2029, the EA's office manager asks when the signed Form 8879 may be destroyed. Which statement is correct?
Answer: The Form 8879 may be destroyed on April 15, 2029, because the three-year period runs from the later of the due date or the filing date.
Pub. 4164 and the Form 8879 instructions require an e-file provider to retain the signed Form 8879 for three years from the later of the return's due date or the date the return was filed. The return was filed on February 10, 2026, and the due date (April 15, 2026) is later, so the retention period ends April 15, 2029. Choice A wrongly uses the acceptance date as the starting point. Choice C wrongly starts the period at the end of the tax year. Choice B asserts a six-year retention period, which does not apply to Form 8879.
- Which statement is correct regarding the firm's participation in IRS e-file?
Answer: The LLC must apply for its own EFIN through IRS e-Services, both owners must be listed on the application and pass the suitability check, and the LLC may not e-file until its application is approved.
Pub. 3112 (IRS e-file Application and Participation). A firm that originates e-filed returns must have its own EFIN, obtained through an IRS e-file application, and every Principal and Responsible Official on the application must pass a suitability check. For an LLC, a Principal is an individual authorized to act for the entity in legal or tax matters, and any Principal who participates in the firm's e-file operation must be on the application. The decisive facts are that both owners are authorized to act for the LLC and both take part in its e-file work. The office manager may also serve as a Responsible Official, but she cannot replace them. Because the owners are an enrolled agent and a CPA, they may provide professional credentials instead of fingerprints. Choice A is correct. Choice B is wrong because a transmitter's EFIN does not authorize the firm to originate returns. Choice C is wrong because a PTIN does not substitute for listing and screening the Principals. Choice D is wrong because there is no provisional EFIN; the IRS may take up to 45 days to approve an application, and the firm must wait for approval.
- A CPA firm has been approved by the IRS only as an Electronic Return Originator (ERO). It would like to transmit completed returns directly to the IRS from its own office. Which statement is correct?
Answer: The firm must be approved as a transmitter to transmit directly, or it may arrange for an approved transmitter to submit the returns.
Authority: Pub. 1345. A firm approved only as an ERO may originate returns and deliver them to an approved transmitter, but it may not transmit returns directly to the IRS unless it is also approved as a transmitter. Choice A overstates the ERO approval. Choice C is wrong because passing software testing does not confer transmitter status. Choice D is wrong because a PTIN is an individual preparer number and does not authorize a firm to transmit returns; the firm needs transmitter approval.
- Which statement is correct regarding IRS e-file signature authorization forms?
Answer: Form 8878 authorizes an IRS e-file signature for an electronically filed extension (Form 4868 or Form 2350), while Form 8879 authorizes an IRS e-file signature for an original individual income tax return.
Authority: Form 8878 and Form 8879 instructions; Pub. 1345. Form 8878 is the IRS e-file Signature Authorization for an electronically filed extension (Form 4868 or Form 2350), and Form 8879 is the IRS e-file Signature Authorization for an original individual income tax return. Choice B misstates the purpose of both forms: neither is a third-party designee authorization nor a revocation document. Choice C likewise misstates them: the consent for disclosure to a third party and the IRS e-file application are separate documents. Choice D incorrectly assigns Form 8878 to an original individual return and Form 8879 to a third-party disclosure consent; extension signatures are authorized on Form 8878 and original individual returns on Form 8879.
- Which statement is correct regarding a completed Form 8879, IRS e-file Signature Authorization, for an e-filed individual income tax return?
Answer: The ERO must retain the signed Form 8879 for three years after the later of the due date of the return or the date it was filed and must provide it to the IRS on request.
Authority: Form 8879 instructions; Pub. 1345. Form 8879 is a retention document, not a transmitted or mailed form. The ERO must keep the signed form for three years after the later of the return's due date or the date the return was filed, and produce it to the IRS on request. Choice A is wrong because the form is not filed or mailed to the IRS. Choice C is wrong because the taxpayer has no obligation to attach the authorization to a retained copy. Choice B is wrong because the authorization is not part of the e-file transmission.
