VITA Certification Test Questions with 100% Correct Answers, Exams of Tax Legislation and Financial Law

Download VITA Certification Test Questions with 100% Correct Answers and more Exams Tax Legislation and Financial Law in PDF only on Docsity! [Type the document title] VITA Certification Test Questions Questions with 100% Correct Answers VerifiedBy Expert Updated 2024 Guaranteed Success. 1) To ensure quality service and accurate return preparation, every site is required to have a process for assigning taxpayers to IRS tax law-certified preparers who are certified at or above the level required to prepare their tax return. a. True b. False - ✔✔️a️. True 2) During the intake process, which of the following should the volunteer verify that the taxpayer and spouse, if applicable, have with them to ensure the taxpayers can be served that day? a. Photo identification for both b. Social Security or taxpayer identification number verification documents for everyone listed on the return c. All tax statement documents, including Forms W-2, 1099-R, etc. d. All of the above - ✔✔️d️. All of the above 3) Explaining the intake/interview and quality review process is important so the taxpayer understands they are expected to: a. Have a completed Form 13614-C, Intake/Interview & Quality Review Sheet, prior to having the return prepared. b. Answer the tax preparer's additional questions during the interview. c. Participate in the quality review of their tax return. d. All of the above. - ✔✔️d️. All of the above. pg.️1 [Type the document title] 4) Jan, a greeter, overheard an IRS tax law-certified volunteer, Jim, trying to sell insurance to a taxpayer he was helping. Jim is an insurance agent in the community. Jan feels like Jim was pushy, made the taxpayer uncomfortable, and violated Volunteer Standard of Conduct #3. What should Jan do? a. Make an announcement to the taxpayers in the waiting room to ignore Jim if he tries to sell them insurance. b. Tell the site coordinator what she heard, so he can immediately remove Jim from the site and report the incident using the external referral process by sending an email to [email protected]. c. Mind her own business and do nothing. - ✔✔️b️. Tell the site coordinator what she heard, so he can immediately remove Jim from the site and report the incident using the external referral process by sending an email to [email protected]. 5) Ann, an IRS tax law-certified tax preparer, told the taxpayer that cash income does not need to be reported because the IRS will never know about it. Ann indicated NO cash income on Form 13614-C. Ann prepared the return without the cash income. The designated quality reviewer was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Did the designated quality reviewer violate the Volunteer Standards of Conduct? a. Yes b. No - ✔✔️b️. No 6) Pat is a paid tax preparer in the community; he also gives back to the community by serving as an IRS tax law-certified volunteer tax preparer at a VITA/TCE site. While conducting the interview with the taxpayer, Pat discovers the taxpayer's small business will generate a loss, making the return out of scope for the VITA/ TCE Programs. Pat explains to the taxpayer that the tax return cannot be prepared at the VITA/TCE site, but pg.️2 [Type the document title] 12) During the intake process, the volunteer should verify the taxpayer and spouse, if applicable, have photo identification. Additionally, taxpayers must provide verifica- tion of taxpayer identification number (SSN or ITIN) for everyone who will be on the tax return. a. True b. False - ✔✔️a️. True 13) Heidi, a VSC-certified volunteer, is working at the intake station. As part of her duties, she is required to explain to the taxpayer what they are expected to do today as part of the return preparation process. What should Heidi tell them? a. Form 13614-C, Intake/Interview & Quality Review Sheet, must be completed prior to having the return prepared. b. You will be interviewed by the return preparer and asked additional questions as needed. c. You need to participate in a quality review of your tax return by someone other than the return preparer. d. All of the above. - ✔✔️d️. All of the above. 14) Sue, a VITA/TCE site coordinator, was watching the local news when she saw Aaron, a new tax law-certified volunteer, in a story about several bank employees being arrested for suspicion of embezzlement. She saw Aaron being led out of the bank in handcuffs. Three days later, Sue is shocked when she sees Aaron show up at the site ready to volunteer, apparently out on bond. She pulls Aaron aside and explains that his arrest on suspicion of embezzlement could have a negative effect on the site and therefore she must ask him to leave the site. Sue uses the external referral process to report the details to IRS-SPEC by sending an email to [email protected]. Did Sue take appropriate actions as the site coordinator? a. Yes b. No - ✔✔️a️. Yes pg.️5 [Type the document title] 15) Bob, an IRS tax law-certified volunteer preparer, told the taxpayer that cash income does not need to be reported because the IRS does not know about it. Bob indicated NO cash income on Form 13614-C. Bob prepared a tax return excluding the cash income. Jim, the designated quality reviewer, was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Who has violated the Volunteer Standards of Conduct? a. Bob, the tax law-certified volunteer who prepared the return. b. Jim, the designated quality reviewer who was unaware of the cash income when he reviewed the return. c. Betty, the site coordinator. d. No one has violated the Volunteer Standards of Conduct. - ✔✔️a️. Bob, the tax law-certified volunteer who prepared the return. 16) Max prepares a tax return for Ali at a VITA/TCE site. He finds out during the interview that Ali has no health insurance. After Ali leaves the site, Max writes her name and contact information down to take home to his wife who sells health insurance for profit. Which of the following statements is true? a. There is no violation to the Volunteer Standards of Conduct (VSC) unless Max's wife makes a big commission on the sale of health insurance to Ali. b. Max has violated the VSC because he is using confidential information to engage in a financial transaction to further his own or another's personal interest. c. Max is doing Ali a favor by using her personal information to secure business for his wife. d. Information a taxpayer provides at a VITA/TCE site can be used for the volunteer's personal gain. - ✔✔️b️. Max has violated the VSC because he is using pg.️6 [Type the document title] confidential information to engage in a financial transaction to further his own or another's personal interest. 17) Jake is an IRS tax law-certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three or four weeks longer than the refund being direct deposited. Jill asks a. Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do? 18) b. Jake can offer to use his account to receive the direct deposit, and turn the money over to Jill once the refund is deposited. 19) c. Jake should explain that a taxpayer's federal or state refund cannot be deposited into a VITA/TCE volunteer bank account and she will have to open an account in her own name to have the refund direct deposited. 20) d. Jake can suggest she borrow a bank account number from a friend because the taxpayer's name does not need to be on the bank account. - ✔✔️c️. Jake should explain that a taxpayer's federal or state refund cannot be deposited into a VITA/TCE volunteer bank account and she will have to open an account in her own name to have the refund direct deposited. 21) If a taxpayer offers you a $20 bill because they were so happy about the quality service they received, what would be the appropriate action to take? a. Take the $20 and thank the taxpayer for the tip. b. Tell the taxpayer it would be better to have the $20 deposited directly into your bank account from his refund. pg.️7 [Type the document title] 30) When does the taxpayer sign the tax return? a. Before quality review and before being advised of their responsibility for the accuracy of the information on the return. b. Before quality review and after being advised of their responsibility for the accuracy of the information on the return. c. After quality review and before being advised of their responsibility for the accuracy of the information on the return. d. After quality review and after being advised of their responsibility for the accuracy of the information on the return. - ✔✔️d️. After quality review and after being advised of their responsibility for the accuracy of the information on the return. 31) The site is busy with many taxpayers waiting for assistance. All volunteers are busy preparing tax returns. Can you quality review the return you just prepared instead of waiting for someone else to quality review the return? a. Yes, if it is a returning taxpayer. b. Yes, with approval of the site coordinator. c. No, self review is never an acceptable quality review method. d. No, unless you are certified at the Advanced level. - ✔✔️c️. No, self review is never an acceptable quality review method. 32) Which of the following is true? a. Quality review can be conducted by a volunteer preparer certified at Basic when the tax return required an Advanced certification to prepare. b. Quality review is conducted after the taxpayer signs the tax return. c. Quality review is an effective tool for preparing an accurate tax return. pg.️10 [Type the document title] d. Taxpayers do not need to be involved in the quality review process. - ✔✔️c️. Quality review is an effective tool for preparing an accurate tax return. 33) As part of the intake process, each site must: a. Have a process to ensure a return is within the scope of the VITA/TCE Programs. b. Identify the certification level needed to prepare a return. c. Have a process to ensure volunteers have the certification needed for the returns they prepare. d. All of the above. - ✔✔️d️. All of the above. 34) When should an IRS-certified volunteer preparer participating in the VITA/TCE programs perform a complete interview of a taxpayer? a. Only when the taxpayer has questions. b. Only if the taxpayer has never visited your site. c. Only when the site is not busy. d. For every return prepared at the site. - ✔✔️d️. For every return prepared at the site. 35) The certified volunteer preparer should verify the return is within their certification level as part of the Intake/Interview process. a. True b. False - ✔✔️a️. True 36) When reviewing Form 13614-C, you see the "Interest" question is marked "Yes" and the taxpayer gives you a Form 1099-INT. What should you do next? a. Input Form 1099-INT into tax software. pg.️11 [Type the document title] b. Go to the next question on Form 13614-C. c. Ask the taxpayer if they had any other interest income. - ✔✔️c️. Ask the taxpayer if they had any other interest income. 37) VITA/TCE sites are required to conduct quality reviews of every return prepared at the site. a. True b. False - ✔✔️a️. True 38) A taxpayer tells you that they donated $50 to their church but they did not bring proof of the donation. This information along with all other information gathered during your interview does not seem unusual or questionable. 39) As a tax preparer, you should: a. Send the taxpayer home to get proof of their donation. b. Prepare the return giving credit for the donation without seeing proof. c. Prepare their return without giving them credit for the donation. - ✔✔️b️. Prepare the return giving credit for the donation without seeing proof. 40) What information should a volunteer review to deter the possibility of identity theft? a. Form W-2. b. Photo identification. c. Last year's tax return. d. Medicaid card. - ✔✔️b️. Photo identification. 41) The taxpayer signs the tax return after quality review and after being advised of their responsibility for the accuracy of the information on the return. a. True b. False - ✔✔️a️. True pg.️12