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Ethics Professional and Legal Responsibilities Flashcards

1
Q

Contingent fee in compliance with circ 230

A

lots of examination needed so exempt
claim for a refund filed in connection with stat interest or penalties
representing client in judicial proceedings
IRS challenge of original or amended tax return

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2
Q

realistic possibility

A

33-50% do not have to be disclosed

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3
Q

ssts 7

A

written advice for complicated matters not required

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4
Q

reasonable basis

A

> 20% chance must be disclosed

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5
Q

substantial authority

A

> 40% chance of being sustained

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6
Q

Restatement View

A

majority view of accountants liability to a limited class of actually foreseen users

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7
Q

scienter

A

whether or not one has a guilty mind ie intent to decieve

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8
Q

ultramares rule

A

allows recovery by third party if privity of contract between accountant and third party-only in some jurisdictions requires privity before accountant liable fr

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9
Q

reasonably foreseeable

A

all that is required for fraud

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10
Q

3 approaches to liability

A

privity approach of ultramares vs touche
restatement “limited class”
reasonable foreseeability

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11
Q

RICO

A

racketeer influenced corrupt org act-requires conduct of an enterprise through pattern of racketeering activity

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12
Q

Common Law

A

Real Estate and Services

based on case decisions-needs more detail to be valid contract

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13
Q

UCC

A

sale of goods or goods and services combined

codified

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14
Q

Quasi-contract

A

imposed by law-no actual contract

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15
Q

implied in fact contract

A

based on conduct of parties

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16
Q

void contract

A

violates law

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17
Q

bilateral/unilateral contract

A

promise in exchange for promise or act(unilateral)

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18
Q

voidable contract

A

option to avoid liability

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19
Q

enforceability classifications

A

valid, void, voidable, unenforceable

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20
Q

express contract

A

formed wholly by oral and/or written words

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21
Q

firm offer

A

merchant, signed writing, open for stated period

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22
Q

Sight draft

A

payable on demand

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23
Q

Time Draft

A

specific time

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24
Q

Trade acceptance

A

draft drawn on buyer’s bank

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25
elements for negotiable instruments
writing, signed, unconditional, sum certain in money, payable on demand or definite time and words of negotiability (order or bearer)
26
not affecting negotiability
contradictory terms, omission of date, postdating or antedating, collateral, presence of guaranty
27
draft vs. order
draft 3 parties, order 2 parties
28
promissory notes vs COD vs check
must be payable to order or bearer, check does not
29
requirements for HDC
must be holder, take instrument for value, in good faith and without notice that instrument is overdue, previously dishonored or of any claim of defense
30
securities act of 1933-initial offering intrastate
if issuer makes offering in own state to residents of that state registration not necessary. 80% of funds used must be in that state
31
Accountant liability
never excused for malpractice
32
Actions by BOD without SH approval
purchasing assets of another corporation
33
DRD
less than 20% int-70%DRD more than 80%-100%DRD limited to taxable income only-not whole div
34
legal expense deduction-to collect taxable income, ie alimony
2% of AGI
35
Accumulated earnings credit & tax
$250,000 + divs paid within first 2 1/2 months of corps tax year, 15%
36
Statute of Frauds- # of docs
may be in multiple docs as along as related to same agreement
37
SSTS 1-tax docs to consider
treatises, well-reasoned articles, IRS general counsel memos
38
RPM-resale price maintenance
judged by rule of reason standard-more rare to find practices illegal
39
% employees to hold election for union
30 %
40
realized gain in partnership sale of assets
lower of realized or built-in
41
ending apparent authority
must give public notice to all businesses not just existing
42
suspended passive losses
no CB on CF
43
implied warranty of merchantability
can be disclaimed orally or in writing with word merchantibility otherwise automatically assumed
44
accrual-tax vs books
tax is claimed when amount determined and going to receive
45
ethical complaints with national implications
AICPA handles
46
liability for material misstatements in reg statements
CPA is strictly liable must prove acted with due diligence and plaintiff did not rely
47
order of payment-bankruptcy
security interests, taxes, general creditors
48
use of cash basis-partnership
always unless no partner is a corporation
49
realistic possibility position
no disclosure
50
2% of AGI deductions
tax prep, unreimbursed job expenses, other misc
51
corporate NOL
CB 2, CF 20
52
breached of contract-wronged party
damages or performance not both
53
foreign IT paid by corp
option of deduction or credit
54
child and dependent care credit phaseout
35% if AGI less than 15000, reduced 1 % for each 2000 increment, min is 20%
55
Guaranty under statute of frauds
must be in writing signed by guarantor
56
LLP
multiple owners, corporate owners, and pass through taxation, s corps cannot have corporate owners
57
involuntary bankruptcy petition
stops enforcement of judgement liens against property
58
generation-skipping tax
flat tax equal to maximum gift and estate tax rate more than one generation below generation of donor
59
denial of discharge in bankruptcy
refusal to explain loss of assets, fraud, concealment of assets, 8 years
60
2% miscellaneous deduction
tax prep fees, custodial fees, profeesional pubs. union dues
61
Holder in due course defenses under negotiable instruments article of UCC
material alteration, discharge in bankruptcy, not breach of contract-only ordinary holders
62
more likely than not
over 50 % for tax shelters
63
partnership basis in assets contributed by partners
same as partners basis
64
gain recognized on corporate formation
to extent that liabilities assumed exceed basis in assets contributed
65
agreements between merchants do not need to be in writing
not objected to in writing win 10 days
66
interest on state government obs
not taxable
67
debtor requirements for discharge
must attend all hearing subject to bankruptcy proceedings
68
gain on sale in partnership
capital gain equal to amount payment exceeds basis
69
private foundation filing
990PF
70
consolidated corp return
members of affiliated 80% or more group
71
taxation of distributions of retirement
fully taxable if no basis-earnings not taxed
72
no capacity for agency relationship
unincorporated association-not an individual or entity
73
TRP
must be paid to prepare or hire people to prepare substantial portion of tax return
74
foreign income
excludable from us income-no credit on taxes paid
75
negotiability of instruments
must be payable at definite time
76
disclosures in non wksi issuers reg
description of security, how proceeds will be useddescription of business and mgmt, and FS
77
bankruptcy confidentiality
cannot disclose names
78
privity of contract and securities act
not required
79
distribution of appreciated property
increases corporations earnings and profits by diff in FMV and AB
80
Acocuntant-client privileges
about 15 states and limited congress
81
anti-fraud provisions act 1934-CPA liability
defenses are lack of knowledge and acting in good faith
82
liability when agents acts for undisclosed principal
principal not liable if agents acts outside actual authority
83
gain realized on acquired property
only to extent of gain exceeding disallowed loss by person who gave
84
real property
governed by common law
85
loss on s corp
only deducted to extent of basis
86
AMT
add back state and local income tax and and misc deductions that exceed 2%
87
Gift tax return
April 15th of year after gifted
88
express warranties
do not need to use promise or warrant, just part of basis between buyer and seller
89
RMBCA
allowed to serve as officer and director if not otherwise stated, may indmemnify officers
90
Income for PHC
interest earned on tax-exempt obs is excluded from income
91
ECG
review of reg stmt by SEC and reduced requirement for audited F/S
92
S corp
basis not affected by debt of corp
93
Cash basis
if over 12 months expense must be spread over time
94
Sales article of UCC-liquidated damages
seller may keep 20% or 500(less) of purchase price if buyer defaults
95
organization expenses
limited to 5000 reduced by amount over 50000, rest is amortized over 80 months
96
negotiable note
in writing and signed by maker unconditional promise to pay money payable to bearer on demand or at definite time
97
net losses in excess of AT-RISK amount
suspended and carried forward without expiration and deductible against that activity
98
EE u.S savings bonds
made purchase after reaching age of 24 and sole owner
99
Sales article of UCC-implied warranty of fitness
seller knows purpose buyer will use goods and buyer relying on sellers knowledge

regulation (25 decks)

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