MCCCD Program Description

Tax Practice Administration and Business Entity Analysis

Course: ACC224

First Term: 2020 Spring

Lecture 3.0 Credit(s) 3.0 Period(s) 3.0 Load
Subject Type: Occupational
Load Formula: S- Standard

Description: Federal income tax representation, practices and procedures; designed for students who desire to become an Enrolled Agent (EA): this course contains the material a student would need to master in order to pass the third part of the EA exam, which is administered by the Internal Revenue Service of the United Stated of America. This course also contains content for the second part of the EA exam not covered in ACC221 Tax Accounting.

MCCCD Official Course Competencies
1. Analyze the professional and legal standards and requirements for Enrolled Agents. (I) 2. Describe sanctionable acts and their potential penalties. (II) 3. Explain general rules and penalties as a tax preparer. (III) 4. Discuss the requirements and responsibilities as a taxpayer`s power of attorney and when a power of attorney is necessary. (IV) 5. Apply a working knowledge of the requirements to prepare a taxpayer`s case for examination. (V) 6. Identify and recognize the taxpayer`s financial situation in paying their tax liability. (VI) 7. Evaluate supporting documentation necessary to prepare a taxpayer`s tax return. (VII) 8. Incorporate legal authority and references when conducting tax research. (VIII) 9. Apply a statute of limitations and other related tax issues. (IX) 10. Examine the Internal Revenue Service Collection Process issues related to the taxpayer. (X) 11. Employ a working knowledge of penalty and/or interest abatement. (XI) 12. Apply tax law when representing the taxpayer before the IRS. (XII) 13. Understand the IRS appeals system. (XIII) 14. Examine when the U.S. Tax Court, the U.S. Court of Federal Claims and a U.S. District Court may hear cases. (XIV) 15. Review taxpayer disclosure requirements and privacy rules and limits. (XV) 16. Evaluate the requirement for retention of taxpayer`s record. (XVI) 17. Apply the Electronic Filing process and its limitations. (XVII) 18. Describe eligibility requirements for business entities, filing requirements and the advantages/disadvantages of each type. (XVIII) 19. Understand use of business assets, applicable depreciation methods and like-kind exchange tax treatment. (XIX) 20. Apply the retirement plans available to small business owners. (XX)
MCCCD Official Course Competencies must be coordinated with the content outline so that each major point in the outline serves one or more competencies. MCCCD faculty retains authority in determining the pedagogical approach, methodology, content sequencing, and assessment metrics for student work. Please see individual course syllabi for additional information, including specific course requirements.

MCCCD Official Course Outline
I. Professional standards and requirements A. Information to be furnished to the IRS B. Omission or error on return, document, or affidavit C. Rules for employing or accepting assistance from former IRS employees or disbarred/suspended persons D. Rules for restrictions on advertising, solicitation and fee information E. Fee rules (e.g., contingent, unconscionable) F. Due diligence requirements G. Conflict of interest H. Rules for refund check negotiation I. Standards for written advice, covered opinions, tax return positions and preparing returns J. Continuing education requirements K. Tax shelters L. Enrollment cycle and renewal M. Rules for prompt disposition of matters before the IRS N. Rules for returning a client`s records and documents O. Preparer tax identification number (PTIN) requirements P. Practitioner supervisory responsibilities (Circular 230 section 10.36) II. Sanctionable Acts A. Disreputable conduct that may result in a disciplinary proceeding B. Sanctions imposed by the Office of Professional Responsibility C. Frivolous submissions (returns and documents) D. Fraudulent transactions (e.g., badges of fraud) III. Rules and Penalties A. Assessment and appeal procedures for preparer penalties B. Types of penalties (e.g., negligence, substantial understatement, overvaluation) C. Furnishing a copy of a return to a taxpayer D. Signing returns and furnishing identifying numbers E. Keeping copies or lists of returns prepared F. Employees engaged or employed during a return period (e.g. Internal Revenue Code (IRC) section 6060) G. Preparer due diligence and penalty involving the earned income credit IV. Power of Attorney A. Purpose of power of attorney B. Signature authority (e.g., extension of assessment period, closing agreement) C. Authority granted by taxpayer D. Limitations on signing tax returns on behalf of taxpayer E. Proper completion of power of attorney (Form 2848) F. Alternate forms of power of attorney (durable) G. Rules for client privacy and consent to disclose H. Distinctions between power of attorney (Form 2848) and tax information authorization (Form 8821) I. Requirements to be met when changing or dropping representatives or withdrawal of representative J. Purpose of a Centralized Authorization File (CAF) number K. Conference and practice requirements (Publication 216) V. Building the Taxpayer`s Case for Audit or Examination A. Identification of tax issue(s) with supporting details B. Potential for criminal aspects C. Competence, expertise and time to handle issue D. Conflict of interest E. Transcripts from IRS (e.g., access to and use of e-services) VI. Taxpayer`s financial situation A. Taxpayers ability to pay the tax (e.g., installment agreements, offer in compromise) B. General financial health (e.g., filed for bankruptcy, lawsuits, garnishments, cash flow, assets, and insolvency) C. Third-party research (e.g., property assessment for municipal taxes, asset values, state and local tax information) D. Discharge of the tax liability in bankruptcy E. IRS collection financial standards VII. Supporting documentation A. Financial documents (e.g., cancelled checks or equivalent, bank statements, credit card statements, receipts, brokerage records) B. Legal documents (e.g., birth certificate, divorce decrees, lawsuit settlements) C. Prior and subsequent tax returns D. Other substantive and contemporaneous documentation (e.g., corporate minutes) E. Employment reimbursement Policies F. Business entity supporting documents (e.g., partnership agreement, corporate bylaws) G. Expense records (e.g., deductible, allowable, personal, mileage log) VIII. Legal Authority and References A. Internal Revenue Code B. Income tax regulations C. Revenue rulings D. Revenue procedures E. IRS notices F. Case law G. IRS publications H. Private letter ruling I. Form and instructions J. Internal Revenue Manual K. Authoritative versus non-authoritative source material IX. Related Tax Issues A. Statute of limitations B. Post-filing correspondence (e.g., math error notices, under-reporting notices) C. Deadlines and timeliness requirements D. Third-party correspondence (e.g., witness communications, employment records) E. Freedom of Information Act (FOIA) requests F. Tax avoidance vs. tax evasion G. Tax return disclosure statements H. Taxpayer Advocate Service (e.g., criteria for requesting assistance) I. Identity Theft J. Judicial levels of representation beyond the scope of EA representation X. Internal Revenue Service collection process A. Extension of time to pay (e.g., Form 1127) B. Installment agreements C. Types of offer in compromise D. Collection appeals program (e.g., denial of installment agreements, discharge applications) E. Collection appeals and due process (e.g., lien, levy, and Form 12153) F. Adjustments to the taxpayer?s account (e.g., abatements and refund offsets) G. Requesting an audit reconsideration (e.g., documents and forms) H. Decedent Issues I. Collection notice and Notice of Federal Tax Lien J. Levy and seizure of taxpayer`s property K. Case being reported Currently Not Collectable (e.g., reasons and reactivation) L. IRS Collection Summons (e.g., purposes) M. Collections statute of limitations N. Trust fund recovery penalty O. Amended returns and claims for refund (e.g., Form 1040X, Form 843, appropriateness and timeliness) XI. Penalties and/or Interest Abatement A. Penalties subject to abatement B. Basis for having penalties abated or refunded C. Reasonable cause D. Basis for having interest abated or refunded E. Interest recalculation F. Procedures for requesting abatement XII. Representing the Taxpayer in Audit/Examination A. IRS authority to investigate B. Limited practitioner privilege (e.g., IRC section 7525) C. Verification and substantiation of entries on the return D. IRS authority to fix time and place of investigation E. Steps in the process (e.g., initial meeting, submission of IRS requested information) F. Innocent spouse G. Interpretation and analysis of revenue agent report (RAR) (e.g., 30-day letter) H. Interpretation and analysis of CP-2000 notice and Correspondence audits I. Explanations of taxpayer options (e.g. agree or appeal) J. Special procedures for partnership audits (e.g., unified audit procedures for Tax Equity and Fiscal Responsibility Act (TEFRA)) K. Preparer conflict of interest XIII. Representing the Taxpayer Before Appeals A. Right to appeal revenue agent findings B. Request for appeals consideration (e.g., preparation, elements contained) C. Enrolled Agent (EA) appearance at appeals conference D. Settlement function of the appeals process E. Issuance of 90-day letter XIV. The court system: A. U.S. Tax Court B. U.S. District Courts C. U.S. Court of Federal Claims D. Appellate Courts E. U.S. Supreme Court XV. Information Shared with Taxpayer A. Record-keeping requirements B. Significance of signature (e.g., joint and several liabilities, penalty of perjury) C. Consequences of dishonesty XVI. Records Retention and Related Privacy Issues A. Length of time to retain returns and records B. List of returns prepared (e.g. name, social security number, and type of return) C. Earned income tax credit (EITC) due diligence requirements D. Security of taxpayer data (e.g., electronic and paper) XVII. Electronic filing A. Application process to be an e-file provider (e.g., e-services, EFIN) B. E-file mandate and exceptions (Form 8948) C. Advertising standards D. Definition and responsibilities of an electronic return originator (ERO) E. Levels of infractions F. Compliance requirements to continue in program G. Electronic Filing Identification Number (EFIN) revocation appeal process H. E-file authorization and supporting documentation (e.g. Form 8879 and Form 8453) I. Rejected returns and resolution (e.g. client notification) J. Identity theft procedures and resolution (e.g., Identity Protection (IP) PIN) XVIII. Business entities A. Sole proprietorships B. Partnerships C. Corporations D. S Corporations E. LLCs F. Farmers XIX. Use of business assets A. Calculating basis on date of acquisition and through life of asset B. Cost recovery with the various depreciation methods available for business assets C. Cost recovery with amortization of start up costs, organizational expenses and intangibles. D. 2017 Tax Cuts and Jobs Act limits like-kind exchange tax treatment to real property. E. Tax treatment related to the disposition of business property including depreciation recapture. F. Involuntary conversions XX. Retirement plans available to small business owners. (XX) A. Simplified employee pension (SEP) plan B. Savings incentive match plans for employees (SIMPLE) C. KEOGH retirement plans

MCCCD Governing Board Approval Date: June 25, 2019

All information published is subject to change without notice. Every effort has been made to ensure the accuracy of information presented, but based on the dynamic nature of the curricular process, course and program information is subject to change in order to reflect the most current information available.