Under Circular 230, which of the following fees is generally PROHIBITED for a tax practitioner preparing an original tax return?

Answer options:

Contingent fee.

Fixed fee.

Hourly fee.

Fee based on complexity.

How to approach this question

Contingent fees ('I get % of your refund') are banned for original returns to prevent aggressive positions.

Full Answer

A.Contingent fee.✓ Correct

Circular 230 prohibits contingent fees for preparing an original tax return. Exceptions exist for IRS examinations or claims for refund filed in connection with penalties/interest.

Common mistakes

Thinking contingent fees are never allowed (they are allowed for audits).

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