REG - 1 Flashcards
Under Circular 230, it is proper to delay as long as possible in fulfilling an IRS request for records or information if:
Section 10.20 requires prompt compliance with an IRS request for information or records unless the practitioner believes in good faith and on reasonable grounds that they are privileged.
Teo has a private company audit client. He also provides it with tax services. For which of the following services may he charge a contingent fee and still be in compliance with Circular 230?
A claim for refund filed in connection with a determination of statutory interest or penalties.
Representing the client in judicial proceedings.
SSTS No. 4 - Use of Estimates
Unless prohibited by statute or rule, a member may use the taxpayer’s estimates in preparing a tax return if:
- It is not practical to obtain exact data; and
- The member determines that the estimates are reasonable based on known facts and circumstances known to the member.
SSTS No. 1
[w]hen recommending a tax return position or when preparing or signing a tax return on which a position is taken, a member should, when relevant, advise the taxpayer regarding potential penalty consequences of such tax return position and the opportunity, if any, to avoid such penalties through disclosure.” Those penalty consequences generally arise when the CPA is unable to advise the client that the tax position taken has a “more likely than not” chance of being sustained.
What does the AICPA recommend when considering whether or not to put tax advice in writing?
a. The importance of the transaction and amounts involved;
b. The specific or general nature of the taxpayer’s inquiry;
c. The time available for development and submission of the advice;
d. The technical complexity involved;
e. The existence of authorities and precedents;
f. The tax sophistication of the taxpayer;
g. The need to seek other professional advice;
h. The type of transaction and whether it is subject to heightened reporting or disclosure requirements;
i. The potential penalty consequences of the tax return position for which the advice is rendered;
j. Whether any potential applicable penalties can be avoided through disclosure; and
k. Whether the member intends for the taxpayer to rely upon the advice to avoid potential penalties.
Must the use of estimates be disclosed?
In most circumstances, no.
Is a standard format required for tax advice?
No
For which services may CPA charge a contingent fee and still be in compliance with Circular 230?
A claim for refund filed in connection with a determination of statutory interest or penalties.
Representing the client in judicial proceedings.
When are defendants liable under RICO 1962(c)?
only if they “conduct or participate in the conduct” of the racketeering enterprise.
Even if all of the other elements of a 1962(c) violation are present, if CPA did not become involved in managing the firm it is not liable, if it stuck only to accounting services, even if it did them wrongfully, or even fraudulently, it cannot be liable under RICO.
To whom does FCPA’s accounting provisions apply?
Only to SEC-registered corporations, not privately held companies
When must a perfected security party properly file in a new jurisdiction?
Within 4 months
Does a PMSI in non inventory collateral have priority?
Yes, if it is perfected before the debtor takes possession or within 20 days thereafter.
Usually the first security interest to be perfected has top priority.
Under Article 9, what % of the purchase price must a debtor have paid, for the debtor to have the right to request a sale?
60%.
In what order are the following obligations paid after a secured creditor rightfully sells the debtor’s collateral after repossession?
- reasonable expenses incurred by the secured party in repossession and selling the collateral
- remaining debt owed to the secured party
- debt owed to any (junior) security holders who give written notice of their interest
- Any overage reverts to debtor
Do conditional endorsements affect negotiability?
No. Anyone acquiring the instrument can disregard the condition and demand payment as if the condition did not exist.
