A client tells her EA that her prior-year return omitted $15,000 of income. What does Circular 230 section 10.21 require the EA to do?

Promptly advise the client of the noncompliance and its consequences

Amend the prior-year return without the client's consent and file it promptly

Withdraw from representing the client

When may an EA charge a contingent fee under Circular 230 section 10.27?

For services in connection with an IRS examination of an original return, if engaged within 120 days of the IRS's written notice of examination

For preparing an amended return in any circumstance, as long as the fee is based on the resulting refund and the client agrees to the arrangement in writing

For preparing any original return

Whenever the client agrees in writing

A former client with an unpaid fee asks for his records. Under section 10.28, what must the practitioner do?

Promptly return the client's records necessary to comply with federal tax obligations, even if fees are unpaid (copies may be kept)

Destroy the records after 3 years and notify the client, because the client's unpaid fee allows the practitioner to withhold them until then

Hold all records until the fee is paid

Return only records the client created

Under section 10.29, a practitioner with a conflict of interest may still represent the clients if she reasonably believes she can provide competent and diligent representation, the representation is not prohibited by law, and:

Each affected client waives the conflict by giving informed consent, confirmed in writing

She notifies the IRS of the conflict

The clients are related to each other by blood or marriage and live together in the same household

For how long must a practitioner retain written conflict-of-interest consents?

At least 36 months from the date representation of the client ends

3 years from the date the client signs the conflict-of-interest consent

Which statement may an enrolled agent use to describe her status under section 10.30?

"Enrolled to represent taxpayers before the Internal Revenue Service"

"IRS-licensed tax professional"

"Former IRS agent certified by the Treasury to practice before the IRS"

A practitioner advertises a fixed fee for preparing Form 1040. How long must the practitioner honor the published fee under section 10.30?

At least 30 calendar days after the last date the fee information was published

Until the end of the tax filing season in which the fee information was last published

What does section 10.31 prohibit regarding client refunds?

Endorsing or negotiating a government check issued to a client for a federal tax refund, or directing a refund into an account the practitioner owns or controls

Charging a fee for electronic filing

Advising clients about refund timing

Preparing returns that request direct deposit

Under section 10.34, a practitioner may not willfully, recklessly or through gross incompetence sign a return taking a position that lacks a reasonable basis. What else must she advise the client about?

Penalties reasonably likely to apply to a position, and any opportunity to avoid them by disclosure

The IRS's internal audit selection criteria and the chance that the return will be selected for exam

Circular 230

Circular 230 (31 CFR Part 10) is the Treasury regulation governing practice before the IRS: who may practice, duties such as advising clients of omissions (10.21), returning records (10.28), conflicts (10.29), fees (10.27), return standards (10.34), and sanctions for disreputable conduct (10.50-10.51).

Updated 2026-09-23 · 4 sources · By the EnrolledAgentKit team

Exam part

Part 3

Representation, Practices and Procedures

IRS domain

Practices and Procedures

26 of 85 scored Qs

Tax year tested

2025

2026-27 SEE

Practice questions

10 free below

The rules the exam tests

Figures for tax year 2025, the year the 2026-27 SEE tests. Verify against the cited primary source.
Rule	What it says (2025)	Source
10.3 Who may practice	Attorneys, CPAs, EAs unlimited; actuaries, ERPAs, AFSP holders limited	Circular 230
10.20 Information to IRS	Promptly submit records unless privileged; say who has them	Circular 230
10.21 Client omission	Advise the client promptly of noncompliance and consequences	Circular 230
10.27 Fees	No unconscionable fees; contingent fees only for exams of original returns (engaged within 120 days), interest/penalty refund claims, judicial proceedings	Circular 230
10.28 Client records	Return records needed for compliance on request, even with a fee dispute	Circular 230
10.29 Conflicts	Informed consent confirmed in writing (within 30 days); keep 36 months	Circular 230
10.30 Advertising	No "certified"; fee info honored 30 days; keep copies 36 months	Circular 230
10.31 Refund checks	Never negotiate a client's refund check or route refunds to your account	Circular 230
10.34 Returns	No positions lacking reasonable basis; advise on penalties and disclosure	Circular 230
10.50-10.51 Sanctions	Censure, suspension, disbarment, monetary penalty; list of disreputable conduct	Circular 230

Worked example

Scenario: During a 2025 engagement an EA discovers her client omitted $15,000 of income from his 2023 return. The client also owes her fees and asks for his file.

What Circular 230 requires: (1) Advise him promptly of the omission and its consequences (10.21); no duty to tell the IRS. (2) Return his original records needed for tax compliance even though fees are unpaid (10.28), keeping copies. (3) Do not prepare 2025 repeating the omission, and consider whether to continue the engagement (10.22, 10.34).

Exam traps

No duty to report a client’s omission to the IRS.
“Certified” is off limits for EAs.
Contingent fees on original returns are prohibited.
Conflict consents: written confirmation within 30 days; retention 36 months.

Circular 230: 10 free practice questions

Circular 230 practice questions

Under Circular 230, which individuals have unlimited rights to practice before the IRS?

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Frequently asked questions

What is Circular 230?

The Treasury regulations (31 CFR Part 10) that govern practice before the IRS by attorneys, CPAs, enrolled agents and others.

Can an EA charge a contingent fee?

Only in limited cases: IRS exams of original returns (engaged within 120 days of the notice), refund claims solely for interest or penalties, and judicial proceedings.

Sources

Treasury Department Circular No. 230 (31 CFR Part 10) (accessed 2026-09-23)
IRS Publication 947 - Practice Before the IRS and Power of Attorney (accessed 2026-09-23)
IRS - SEE Part 3 content specifications (Representation, Practices and Procedures) (accessed 2026-09-23)
IRS - Enrolled agents: Frequently asked questions (accessed 2026-09-23)