Mr. Chen, a sole proprietor, timely filed his Form 1040, showing gross income of $200,000 as reported on his return. During an examination, the IRS discovered that Mr. Chen had unintentionally omitted an additional $60,000 of gross income. Does the extended 6-year statute of limitations for assessment apply to Mr. Chen's return?

Yes, because the omitted income is more than 25% of the gross income stated on the return.

Yes, because the omission of gross income exceeds a statutory threshold of $50,000.

Yes, because the omitted income is more than 25% of the gross income stated on the return.

No, because an extended statute of limitations only applies in cases of tax fraud.

No, because the omitted income is not more than 25% of the gross income stated on the return.

An Enrolled Agent files a Form 2848, Power of Attorney and Declaration of Representative, for a new client to handle an examination for the 2025 tax year. The EA does not enter a specific expiration date on the form. How long will this Power of Attorney generally remain in effect on the IRS's Centralized Authorization File (CAF) system?

3 years from the date it is processed

Indefinitely until it is revoked by the taxpayer

3 years from the date it is processed

10 years from the date it is signed

7 years from the date it is filed

Enrolled Agent Jane is asked to represent both Husband and Wife in an examination of their jointly filed return. The couple is now undergoing a bitter divorce. Jane determines there is a significant conflict of interest. Under Circular 230, which of the following is true regarding Jane’s ability to represent both parties?

She may represent both if she reasonably believes she can provide competent and diligent representation to each, and each client gives informed written consent.

She may represent both only if she obtains a waiver from the IRS Office of Professional Responsibility, in addition to securing informed consent from both clients.

She may not represent both parties under any circumstances, as a conflict of interest during a divorce proceeding creates an absolute bar to representation.

She may represent both parties as long as the divorce is not yet final, provided she documents her professional belief that the couple may reconcile and thus eliminate the conflict.

She may represent both if she reasonably believes she can provide competent and diligent representation to each, and each client gives informed written consent.

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SEE3-3Topic: Penalties

A taxpayer files their 2025 individual income tax return 65 days after the due date, including extensions. The amount of tax required to be shown on the return is $100. What is the amount of the failure-to-file penalty?