Question

Which of the following statements best describes Circular 230?

a. Circular 230 has been adopted by the AICPA as its set of rules of practice for CPAs.
b. Circular 230 is a set of Treasury Department ethical and legal standards for those engaging in practice before the IRS.
c. Circular 230 is a set of internal rules at the IRS designed to protect tax practitioners from unfair discipline by the IRS.
d. Circular 230 is a set of ethical rules for taxpayers.

Answer 1

Circular 230 is a set of regulations from the Treasury Department that outlines ethical and legal standards for tax professionals practicing before the IRS.

Step-by-step explanation:

The statement that best describes Circular 230 is: b. Circular 230 is a set of Treasury Department ethical and legal standards for those engaging in practice before the IRS. Circular 230 outlines the regulations governing tax advisors, tax preparers, and other professionals practicing before the Internal Revenue Service.

It includes guidelines on due diligence, unauthorized practice, fees, return of client records, and other aspects of tax practice. This document is not an AICPA standard nor is it a set of internal rules for the IRS or a guide for taxpayers' ethics; instead, it's specifically aimed at tax professionals.