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Covers monetary penalty caps, contingent-fee timing for audit-triggered amended returns, standards for substantial authority and reasonable basis disclosures, and specific penalty computations for valuation misstatements, tax evasion, paperwork failures, and failure-to-disclose transactions. Includes representation rules, key deadlines, statute-of-limitations dates, offer-in-compromise collection potential, and common tax exclusions or caps such as insolvency cancellation of debt, additional child tax credit, mileage deductions, and foreign earned income exclusion.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/ea-part-3-formula-limits-sheet-practices-and-procedures/394651/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/ea-part-3-formula-limits-sheet-practices-and-procedures/394651.png","ImageObject",300,407,{"name":92,"@type":93},"Mimi","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-28","2026-09-26",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",11,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"What does the practitioner monetary penalty cap formula Pmax represent?","Question",{"text":113,"@type":114},"Pmax is the maximum monetary penalty under §10.50. It equals G, where G is the gross income the practitioner derived (or would have derived) from the prohibited conduct.","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"When can a contingent fee apply to an audit-triggered amended return or refund claim?",{"text":118,"@type":114},"A contingent fee is permitted only if the amended return or refund claim is filed within 120 days of the written IRS exam notice, per §10.27.",{"name":120,"@type":111,"acceptedAnswer":121},"What is the deadline to file a refund claim under the general filing-year and payment-year rules?",{"text":122,"@type":114},"The deadline is the later of two windows: filing date plus 3 years, or payment date plus 2 years; the later of the two controls (Section 6511).","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},394651,1790469067,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":34,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":145,"preview_page_count":4},2336477974920,"https://ap-avatar.wpscdn.com/davatar_155a257f0dc6eb9ab79c44ca47cae57d","FreeFellow  \nF O R M U L A & L I M I T S S H E E T  \nEA Part 3  \nIRS · Enrolled Agent (SEE) · Representation  \n102  \nI T E M S  \n4  \nTO P I C S  \n[freefellow.org/ea-part3/formulas](freefellow.org/ea-part3/formulas)  \nFreeFellow EA PART 3 · FORMULA & LIMITS SHEET  \nPRACTICES AND PROCEDURES 13 items  \nSection 10. 50 monetary penalty cap on a practitioner  \nPmax = G  \nPmax = maximum monetary penalty under §10.50, G = gross income the practitioner derived (or would have derived) from the prohibited conduct  \nSection 10.27 contingent-fee 120-day window for audit-triggered amended return  \ntfile ≤ tnotice + 120 days. §10. 27 permits a contingent fee on an amended return or refund claim only if it is filed within 120 days of the written IRS exam notice, a narrow exception to the contingent-fee ban.  \nSection 10.34 substantial authority threshold for an undisclosed position P (position sustained on merits) ≳ 40%  \nweight-of-authority support required to sign an undisclosed ordinary return position  \nSection 6662 gross valuation misstatement penalty  \nP = 0.40 × U when claimed value ≥ 2 × correct value: P = penalty, U = underpayment from the overstatement  \nSection 7201 criminal tax evasion maximum penalty  \nImprisonment ≤ 5 years, Fine ≤ $100 ,000 ($500,000 corp) felony willful evasion of tax known to be owing  \nSection 6695 paperwork penalty per failure and annual cap (returns filed in 2025)  \n$60 per failure, capped at $31,500 per year. Covers §6695(a)-(e): furnish copy, sign, PTIN, retain copy or list, §6060 employee list. §6695(h) indexes by filing year  \nSection 6696(c) prepayment deposit to halt collection of a preparer penalty  \nD = 0.15 × P, paid within 30 days with Form 6118. D = deposit, P = assessed penalty. Suspends collection of remaining 85% during refund proceeding  \nEnrolled agent triennial continuing education requirement  \nCEcycle = 72 hours with CEyear ≥ 16 and Ethicsyear ≥ 2 totals over a 3-year enrollment cycle  \nSection 10.30 direct uninvited solicitation retention period  \ntretain end ≥ tsent + 36 months  \ntsent = date solicitation (or radio/TV recording) was sent or aired; copy plus recipient list must be kept through this date  \nSection 10.34 reasonable basis threshold with Form 8275 disclosure  \nP (position sustained on merits) ≳ 20%  \nminimum support for a disclosed ordinary position on Form 8275 or 8275-R; non-frivolous  \nSection 10.62 OPR complaint answer deadline  \ntanswer = 30 days from service  \ntanswer = deadline to file written answer to OPR complaint; failure to answer is deemed admission of all alleged facts  \nSection 10. 50 disbarment minimum reinstatement waiting period  \ntmin = 5 years  \ntmin = earliest a disbarred practitioner may petition for reinstatement under §10. 81; OPR must affirmatively find rehabilitation  \nSection 6701 aiding and abetting understatement of tax liability penalty  \n$1 ,000 per document, $10 ,000 if related to a corporation return. No statute of limitations on assessment  \nREPRESENTATION BEFORE THE IRS  \nAllowable out-of-pocket health care expense under IRS Collection Financial Standards  \nE = max (actual, national standard)  \nE = allowable monthly health care expense  \nForm 2848 line 7 taxpayer signature validity window  \nDfile ≤ Dsign + 45 days  \nDsign = taxpayer signature date on Part I, Dfile = date IRS receives Form 2848  \nSection 6502 IRS collection statute expiration date  \nCSED = assessment date + 10 years  \nCSED = collection statute expiration date for assessed tax  \nMaximum cancellation of debt income excluded under section 108 insolvency  \nExcluded COD = min(I, COD)  \nI = insolvency amount immediately before discharge, COD = cancellation of debt income from the event  \nMaximum refundable additional child tax credit per qualifying child (2025)  \nR = min(ACTC earned, $1 ,700). R = refundable portion per child; full CTC is \\$2,200 with \\$1,700 ACTC refundable cap  \nBusiness standard mileage deduction (2025)  \nD = M × $0.70  \nD = mileage deduction, M = substantiate","cbCairxGKJSaVNH2","https://ap.wps.com/l/cbCairxGKJSaVNH2","pdf",421460,"English","# Practices and Procedures\n## Section 10 - Monetary penalty caps and thresholds\n## Representation before the IRS - Key amounts and forms\n## Collection and refund timelines - Deadlines and lookback caps\n## Eligibility and caps - Credits, exclusions, and case limits\n## Other computed penalties - Filing and disclosure requirements","[{\"question\":\"What does the practitioner monetary penalty cap formula Pmax represent?\",\"answer\":\"Pmax is the maximum monetary penalty under §10.50. It equals G, where G is the gross income the practitioner derived (or would have derived) from the prohibited conduct.\"},{\"question\":\"When can a contingent fee apply to an audit-triggered amended return or refund claim?\",\"answer\":\"A contingent fee is permitted only if the amended return or refund claim is filed within 120 days of the written IRS exam notice, per §10.27.\"},{\"question\":\"What is the deadline to file a refund claim under the general filing-year and payment-year rules?\",\"answer\":\"The deadline is the later of two windows: filing date plus 3 years, or payment date plus 2 years; the later of the two controls (Section 6511).\"}]","EA Part 3 - Formula & Limits Sheet - Practices and Procedures | PDF",1790409629,18]