Finance Exam Prep

Finance Exam Prep

By Ran Chen, EA, CFP®BusinessEducationCoursesCareers
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Finance Exam Prep episodes

  • Enrolled Agent Exam [Part 3] 41, Oral Disclosures and Third-Party Designees
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - Oral disclosure authorization is limited to a single conversation and expires when the call ends.
    - The third-party designee checkbox on a tax return grants discussion authority for one year but does not permit representation in an audit or appeal.
    - A Form 8655 Reporting Agent Authorization is for specific duties like payroll filings and does not create broad representation rights.
    - None of these limited authorizations allow a designee to receive a client's refund, sign agreements, or otherwise bind the taxpayer.
    - The crucial distinction tested on the exam is between these limited consents and the comprehensive powers granted by a Form 2848, Power of Attorney.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 40, Form 8821 vs Form 2848
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - Form 8821 provides "read-only" access to tax information, while Form 2848 grants authority to represent the taxpayer.
    - Appointees on Form 8821 can be almost anyone, but representatives on Form 2848 must be credentialed practitioners like EAs, CPAs, or attorneys.
    - Filing a new Form 2848 automatically revokes a prior 2848 for the same tax matters unless specified otherwise.
    - Form 8821 does not grant the power to advocate, negotiate, or sign agreements on behalf of the taxpayer.
    - A helpful mnemonic: "8821 is for EYES (to see information), 2848 is for MOUTH (to advocate and represent)."
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 39, CAF Numbers and Authorization Recording
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The purpose of the Centralized Authorization File (CAF) and how the unique nine-digit CAF number is used by the IRS.
    - The correct procedure for a new representative to obtain a CAF number by leaving the field blank on their initial Form 2848.
    - The critical exam distinction between a power of attorney 'recorded' on the CAF for ongoing matters versus one for 'specific use' that is not recorded.
    - The rule that the IRS will only send copies of notices to the first two representatives listed on a Form 2848, even if more are authorized.
    - The limitation on authorizing representation for future tax periods, which is generally capped at three years from the date of receipt by the IRS.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 38, Form 2848 Power of Attorney
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The critical importance of precisely matching taxpayer identity information on Form 2848 with IRS records to avoid rejection.
    - How to correctly specify tax matters by Type, Form, and Year (T-F-Y), and the three-year limit on authorizing future tax periods on the CAF.
    - The strict signature requirements for joint returns, specifically the "both spouses must file a separate form" rule for joint matters.
    - The key differences between substitution and delegation of authority and that these powers must be explicitly granted by the taxpayer.
    - Common exam traps such as using vague language like "all years" and understanding the role of the Centralized Authorization File (CAF).
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 37, Preparer Penalty Assessment and Appeal
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - That an IRS examiner's immediate supervisor must provide written approval before a preparer penalty can be formally proposed.
    - The first step in disputing a proposed penalty is to respond to the 30-day letter by requesting a conference with the IRS Independent Office of Appeals.
    - The crucial 'Pay 15 to Stay in the Game' rule: a preparer must pay 15% of the assessed penalty and file a refund claim to be eligible to sue in U.S. District Court.
    - The key difference between a pre-assessment administrative appeal and a post-assessment judicial refund claim.
    - That once a penalty is assessed and remains unpaid, the IRS can use standard collection procedures, such as liens and levies, to collect the debt.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 36, Aiding Understatements and Other Civil Penalties
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The IRC 6701 aiding and abetting penalty applies to anyone who knowingly assists in an understatement, with a $1,000 penalty for individual returns and $10,000 for corporate returns.
    - The IRC 6700 penalty for promoting abusive tax shelters is calculated based on the promoter's gross income derived from the activity.
    - A frivolous submission under IRC 6702 results in a $5,000 penalty for the taxpayer, but a practitioner who assists can be penalized under IRC 6701.
    - The IRS can seek an injunction under IRC 7407 to completely bar a practitioner from preparing tax returns for repeated misconduct.
    - A critical exam skill is distinguishing practitioner penalties (based on their actions) from taxpayer penalties (based on their understatement).
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 35, Disclosure and Use of Tax Return Information
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The critical difference between criminal penalties under IRC 7216 and civil penalties under IRC 6713.
    - The specific requirements for obtaining valid, written taxpayer consent before disclosing or using tax return information.
    - Key regulatory exceptions that permit disclosure without taxpayer consent, such as for peer reviews and court orders.
    - The special consent rules required when a tax preparer transmits client information to a service provider located overseas.
    - How to identify common exam traps related to prohibited "uses" versus prohibited "disclosures" of taxpayer data.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 34, Other Return Preparer Penalties Under Section 6695
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The specific per-failure and maximum annual penalties for administrative duties like furnishing copies, signing returns, using a PTIN, and record retention.
    - The significantly higher, uncapped penalties for negotiating a client's refund check and failing to perform due diligence.
    - That most Section 6695 penalties can be abated if the failure is due to reasonable cause and not willful neglect.
    - The critical due diligence requirements for credits like the EITC and CTC, including the use of Form 8867.
    - How the EA exam tests these concepts through scenario-based questions requiring penalty calculations and identification of violations.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min
  • Enrolled Agent Exam [Part 3] 33, Preparer Penalties Under IRC Section 6694
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - The two primary penalties under IRC Section 6694 for unreasonable positions and willful or reckless conduct.
    - The distinction between the 'substantial authority' and 'reasonable basis' standards and when each applies.
    - How adequate disclosure, often using Form 8275, can help a preparer avoid penalties for positions lacking substantial authority.
    - The mechanics of the 'reasonable cause and good faith' exception as a defense against the unreasonable position penalty.
    - How liability can extend to non-signing preparers and the firms that employ them.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    5 min
  • Enrolled Agent Exam [Part 3] 32, Frivolous Submissions and Badges of Fraud
    This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams.
    In this episode you will learn:
    - How to identify common frivolous tax arguments tested on the EA exam, such as 'wages are not income.'
    - The critical difference between negligence (20% penalty) and civil fraud (75% penalty), which hinges on intent.
    - Key examples of 'badges of fraud' that indicate a taxpayer's willful intent to deceive, like keeping two sets of books or concealing assets.
    - A practitioner's duties under Circular 230 when a client insists on taking a frivolous position.
    - The specific civil penalty for filing a frivolous return ($5,000) and how it differs from fraud or negligence penalties.
    For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep
    4 min

About Finance Exam Prep

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Finance Exam Prep is a daily podcast designed to help future tax and finance professionals pass their certification and licensing exams with clarity and confidence.

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