Chapter 1 Flashcards
When may a contingent fee be charged?
- Representing a client in connection with an IS examination of an original return
- An amended return or
- Claim for refund or credit
- Services rendered in connection with any judicial proceeding arising under the Code.
Realistic possibility
33% - 50%
Signing Tax return preparer
bears primary responsibility for the overall accuracy of the claim or return
Nonsigning tax preparer
those other than the Signing TRP who prepare all or a substsantial portion of a return
No substantial authority
<40% chance of being sustained
No reasonable basis
<20% chance of being sustained
more likely than not
<50%
If a TRP prepared a return involved in a tax shelter that was disclosed on the return, in which case would the TRP penalty not be applicable
it is reasonable to believe that the position would more likely than not be upheld
Who can grant a CPA license?
state board of accountancy
punitive damages
damages intended to reform or deter the defendant and others from engaging in conduct similar to that
compensatory damages
replacing what was lost
privity
a close relationship to the same right of property or the power to enforce a promise or warranty. An individual cannot sue on a contract to which one was not a party
scienter
intent or knowledge of wrongdoing
Who is a CPA liable to?
anyone in a class of third parties who the CPA knows will rely on the opinion
Foreign Corrupt Practices Act Liability - 2 key positions
anti-bribery
accoutning provisions
RICO Racketeer influenced corrupt organizations act - two sides
criminal
civil
What is the key to establishing a pattern of racketeering activity for purposes of Section 1962c?
Relationship
Continuity
FCPA’s accounting provisions apply to whom?
SEC registered corps
What did SOX do in response to Enron?
Created the PCAOB
Required the rotation of audit partners
Strengthened criminal penalties for securities fraud
Restricted auditors of public companies from providing the full range of nonaudit services to public audit clients
A publically traded US company under the FCPA’s accounting provisions must devise internal accoutning controls sufficient to provide a reasonable assurance that:
Access to assets is limited
Transactions are executed in accordance with mgmt’s general or specific authorization.
RICO’s two sides
Criminal
Civil
RICO prohibits
- Receiving money/property thru a pattern of racketeering activity and then investing that money into an enterprise.
- Acquiring and controlling an enterprise through a pattern of racketeering activity.
- conducting or participating directly or indirectly in the conduct of an enterprises affairs.
- conspiring to violate the above
What are the 4 elements of RICO section 1962c?
- defendant conducted or participated in the conduct.
- of an enterprise
- through a pattern
- of racketeering activity.
Who has recognized an accountant-client privilege
approx 15 states and Congress for very limited purposes when tax practitioners are involved
Who does the privilege belong to in a accountant-client privilege
the client
Have state courts recognized an accountant-client testimonial privilege?
No
Has the federal courts recognized an accountant-client privilege?
No
Where do state privilege statutes apply?
Only in state courts in the particular state, not in federal court
