Which of the Following Statements Regarding Enrolled Agents Is True

question 21

Multiple Choice

Which of the following statements regarding enrolled agents is true?

• A)They are tax professionals who advise only professionals in tax planning.
• B)They are taxpayers with relatively common types of income and expenditure.
• C)They are federally licensed individual tax practitioners.
• D)They are lawyers who specialize in tax planning.
• E)They are federal agents who collect taxes from taxpayers.

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Definitions:

Tax

A required financial contribution or alternative type of tax placed on a taxpayer by a state authority to cover government outlays and assorted public spending.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides benefits to retirees, the disabled, and children of deceased workers.

Labor Tax

Taxes levied on the wages and income generated from labor, which can affect employment and labor supply decisions in the economy.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium outcome is not achievable or not achieved.