Question

20. California business owner, Mason, would like to hire an employee who understands income tax return preparation. Depending upon their credentials and their role with the company, the new employee may or may not be required to register with CTEC. Which of the following employees would be required to register with CTEC?

    1. a) A preparer who prepares and signs returns for an exempt preparer

    2. b) An active California CPA

    3. c) An employee of a business which is not in the tax return preparation field, who prepares

       the company’s business tax returns

    4. d) A preparer who prepares returns for an exempt preparer and the exempt preparer signs

       the returns

21. Tonto takes client confidentiality very seriously; however, he is unsure at times what would be considered a violation of California’s code. It is a misdemeanor under the California Business and Professions Code for a preparer to disclose any information obtained in the business of preparing federal or state income tax returns, with a few exceptions. Which of the following is an appropriate reason to disclose information?

    1. a) Providing client contact information to a broker who sells retirement plans

    2. b) Telling your spouse that his best friend came by to have you prepare his tax return

    3. c) Seeking guidance or assistance from a co-worker in the preparation of the tax return

    4. d) Providing information to a caller who has identified herself as the wife of a single taxpayer

22. Melissa is a tax preparer in California. She works for a small firm and has about 275 clients. Melissa is required to supply which of the following pieces of personal identifying information when preparing a tax return for a fee?

    1. a) PTIN/Name

    2. b) Social Security Number/Address

    3. c) Date of Birth/Social Security Number

    4. d) Address/Name

23. Reese, a tax preparer, violated a provision in Chapter 14 of the California Business and Professions Code. She may be subject to all the following except:

    1. a) Being found guilty of a misdemeanor

    2. b) Being fined up to $1,000

    3. c) Imprisonment in the county jail

    4. d) Being fined $1,000 plus $100 for each return prepared

25. Nancy is a California paid tax preparer who has found herself in several situations over the years where it has been necessary to disclose confidential client information. Under the California Business and Professions Code, it is a misdemeanor for anyone to disclose information obtained in the business of preparing income tax returns or in assisting taxpayers in the preparation of their returns. However, there are some exceptions. Which of the following reasons is listed incorrectly as being an exception to this rule?

    1. a) The taxpayer authorized with written consent.

    2. b) The disclosure is pursuant to a court order.

    3. c) The information is necessary for the preparation of the return.

    4. d) The taxpayer does not reside in California.

26. Scottie is married, files a joint return, and lives in California. His alternative minimum taxable income (AMTI) for the current tax year is $342,559 (Schedule P, line 21). What is Scottie’s alternative minimum tax exemption amount?

    a) $344,225 b) $ 68,846 c) $ 91,793 d) $ 45,895

27. Yancy purchased health insurance coverage through Covered California. He received Form 1095-C. What information does Yancy’s tax preparer need from this form?

    1. a) The amount of the health insurance premiums he paid each month only.

    2. b) The amount of advanced premium tax credit he received during the year only.

    3. c) The amount of the health insurance premiums he paid each month, the number of

       months of coverage, for whom coverage was provided, and whether the coverage met

       the minimum essential coverage requirements.

    4. d) Information for the individuals covered by the employer plan and the number of months

       each person listed was covered.

Answer 1

1. Following employees would be required to register with CTEC :

(a) A preparer who prepares and signs returns for an exempt preparer.

(c) An employee of a business which is not in the tax return preparation field, who prepares the company's business tax return.

(d) A preparer who prepares returns for an exempt preparer and the exempt preparer signs the returns.

2. (a) Providing client contact information to a broker who sells retirement plans is an appropriate reason to disclose information.

3. Melissa is required to supply following pieces of personal identifying information when preparing a tax return for a fee :

(a) PTIN / Name

(d) Address / Name

4. Reese, a tax preparer , violated a provision in Chapter 14 of the California Business and Profession Code. She may be subject to the following except

(d) Being fined $1,000 plus $100 for each return prepared.