FC 2 Flashcards
What purpose do letters of credit serve?
to ensure performance and payment under a contract
list basic characteristics of a letter of credit
- issued in any form that is a record
- consideration not required to issue
- can be revocable (international irrevocable)
- letter expires one year after date of issue - 5 years if time is perpetual
what are the requirements for transferring a letter of credit?
- can’t unless stated in letter
2. proceeds from letter are assignable
Describe what happens if a bank ignores the requirements for payment on a letter of credit
bank is liable for any damages because it cannot vary the terms of the letter of credit
What is Circular 230?
The DOT rules of practice that cover CPAs and others who practice before the IRS.
Identify elements of impermissable fee as described in Circular 230
- Unconscionable
2. Contingent
List general requirements of IRS practitioners as highlighted in Circular 230
- Furnishing requested info promptly
- Exercising Due Diligence
- Not unreasonably delaying IRS matters
- Not providing assistance in practicing to persons disbarred or suspended by IRS
List components of IRS best practices as outlined in Circular 230
- communicate clearly with client
- establish facts
- relate applicable law
- advise client regarding consequences
list types of covered opinions outlined n circular 230
- Tax avoidance transactions
- transactions with principal purpose of avoiding ta
- 4 categories of transactions with significant purpose of avoiding tax.
Explain when creditor has temporary perfection
Debtor moved to another state
- creditor has 4 months or perfection in new state
Describe possession as means of perfection
Instruments can be perfected by possession; creditor can be in possession by controlling when title can be passed (field warehousing)
Describe filing locations
Central (state level) except for fixtures and crops ( local with property records)
Describe financing statement
Document that is filed
needs adequate description
names of debtor and secured party
List 2 solutions in which perfection by attachment is automatic upon creation f security interest
- Purchase money security interest in consumer goods
2. Security interest created by assignment
Define Perfection
Means by which secured party gains priority to a debtors collateral over other 3rd parties who also claim to have an interest in same collateral.
List methods of perfection
- Attachment ( auto upon creation of security interest)
- Possession - control
- Filing
- Automatic
- Temporary
What does the BSA require of tax payers?
to report foreign bank accounts
GAPP
Generally Accepted Privacy Principles
2 actions that are punishable conditions under S7216 if Internal Revenue Code
- disclosing any info obtained in preparation of tax return
2. using info for any purpose other than to prepare a return
6 conditions under which disclosure of client info is acceptable
- client consents
- GAAP calls for disclosure
- Enforceable summons
- Ethical examination
- Peer review
- to others in firm on a “need to know” basis
list exceptions to a practitioner’s privilege as outlined in IRC S7525
- criminal matters
- US Matters not before IRS or federal courts
- state or local tax matters
- written tax shelter advice
examples of when evidentiary privilege is not recognized
- state common law
- federal common law
- most state’s statutes
to what items do accountant - client privilege apply?
sharing work papers with anyone without client’s permission
may not disclose info obtained during work performed
