Practices, Procedures and Professional Responsibility — Annual Federal Tax Refresher (AFTR) Practice Test

This Annual Federal Tax Refresher (AFTR) Practices, Procedures and Professional Responsibility practice set has 72 practice questions based on the official exam materials, each with an instant explanation. You need 70% on the real Annual Federal Tax Refresher (AFTR) knowledge test to pass.

Sample questions

Three questions from the Practices, Procedures and Professional Responsibility bank with the correct answer and an explanation. The practice quiz above draws 30 questions at random from the same bank.

1. What is the primary purpose of the IRS Identity Protection PIN (IP PIN)?

   • It helps prevent someone else from filing a fraudulent federal return using the taxpayer's Social Security number — Correct answer
   • It authorizes a paid preparer to e-file returns on the taxpayer's behalf
   • It replaces the taxpayer's Social Security number on all future returns
   • It guarantees the taxpayer a faster refund each year

   Explanation: The Identity Protection PIN (IP PIN) is a six-digit number the IRS assigns to help verify a taxpayer's identity so a return cannot be e-filed (or paper-filed and processed) with the taxpayer's SSN by someone else (Pub 5199, Tax Preparer Guide to Identity Theft). It is not an e-file authorization, does not replace the SSN, and does not speed refunds.

   Handbook: Practices & Procedures — Tax-Related Identity Theft: Identity Protection PIN (Pub 5199)

2. A taxpayer's e-filed return is rejected because a return using the taxpayer's SSN was already filed. Which form does the taxpayer generally submit to report that they are a victim of tax-related identity theft?

   • Form 14039, Identity Theft Affidavit — Correct answer
   • Form 8867, Paid Preparer's Due Diligence Checklist
   • Form W-7, Application for IRS Individual Taxpayer Identification Number
   • Form 8879, IRS e-file Signature Authorization

   Explanation: Form 14039, Identity Theft Affidavit, is filed by (or on behalf of) a taxpayer to alert the IRS that they are, or may be, a victim of tax-related identity theft — typically when an e-filed return rejects as a duplicate SSN (Pub 5199). Forms 8867, W-7, and 8879 serve unrelated due-diligence, ITIN, and e-file-authorization purposes.

   Handbook: Practices & Procedures — Tax-Related Identity Theft: Form 14039 (Pub 5199)

3. Which of the following is a common warning sign that a client may be a victim of tax-related identity theft?

   • An e-filed return is rejected because a return with that Social Security number has already been filed — Correct answer
   • The client received a larger refund than in the prior year
   • The client changed employers during the tax year
   • The client owes a balance due with the return

   Explanation: Signs of tax-related identity theft include an e-file rejection for a duplicate SSN, an IRS notice about a return the taxpayer did not file, a transcript the taxpayer did not request, or wages from an unknown employer (Pub 5199). A larger refund, a job change, or a balance due are ordinary filing circumstances, not identity-theft indicators.

   Handbook: Practices & Procedures — Tax-Related Identity Theft: Warning Signs (Pub 5199)