Ethics And Responsibilities In Tax Flashcards
You can delay fulfilling an IRs request for records and info under circular 230 if
You investigated and believe in good faith the info is privileged.
When there is a material error in a return you should promptly inform
Your client
Best practice under circular 230 is
Establishing relevant facts, evaluating reasonableness of assumptions and representations and arriving at a conclusion supported by law and facts in tax.
Retaining client records is ok under
Circular 230
Services rendered in connection with the IRS examination or challenge of original tax return or amended tax return filed within 120 days
Claim is solely in connection with statutory interest or penalties
Representing the client in judicial proceedings
A contingent fee may be charged
Frivolous claims should never be taken by
The tax practitioner
Claims that have a realistic possibility of being sustained
May be taken
Conditions to use estimates are?
It is impracticable to obtain exact data
The estimates are reasonable, given known facts
The estimates do not imply greater accuracy than truly exists
The tax practitioner is only required to report
Material errors
Realistic possibility of being sustained is
33-50%
Seats no. 7 does not require written advice for
Complicated matters.
Under ssts 2 CPA may omit an answer
Under reasonable grounds
The sophistication of the client must be considered when deciding
Oral or written advice
Attempts to claim a deduction that was disallowed can be used
If a leading tax authority publish an article arguing persuasively. A court has issued a favorable opinion
A CPA should warn a taxpayer about penalty risks when the risk is
More likely than not to be sustained
Info not readily available
Genuine uncertainty exists
The answer is voluminous
Reasonable grounds to omit an answer
Under tax law. The taxpayer must meet reasonable basis and substantial authority to not
Disclose a tax position
People are TRPs if
They are paid
Prepare or retain employees to prepare
A substantial portion
Of any fed tax return
A trustee who prepares a tax return for his trust is not
A tax return preparer TRP
For a tax shelter the IRS adopted a
More likely than not (over 50%) standard
A deduction less than $10,000 or $40,000 is not a
Substantial portion
Understatement of tax liability is unreasonable if there is no substantial authority
(Less than 40% chance of bring sustained)
Understatement of tax liability is Unreasonable if disclosed yet no reasonable basis.
Less than 20% chance of being sustained
Section 6695 penalties
Failure to furnish copy of return to taxpayer
Failure to sign return and show own identity
Failure to furnish preparers identifying number to irs
Failure to keep copy of return
6700 punished promotion of abusive tax shelters when
Knowingly or reckless make false statement or
Engage in gross overvaluation of property and
Organize or participate in sell of shelter
6701 is aiding and abetting understatement of tax
Liability
If there are no written standards
Realistic possibility 33%
Reasonable basis 20-33% and disclosed
Authority of tax provisions under Aicpa are
Applicable statute(constructive)
Articles and treaties (well reasoned)
Pronoun cements
Grounds for omission
Not readily available
Uncertainty to meaning of question
Voluminous and will b supplied upon examination
jeep is
Joint ethics enforcement program
Divides ethic complaints and investigations between AICPA and state societies
Expulsion from the AICPA without hearing is
Committing a felony
Failing to file tax return
Filing fraudulent tax return on own or clients behalf
Aiding in preparing a fraudulent tax return for a client
