REG - 4 Flashcards
TRP can be subject to penalties under IRC for failure to
Sign a tax return as a preparer
Provide a client with a copy of a tax return
Keep a record of returns prepared
The IRC contains no penalty for failing to disclose a conflict of interest when preparing a tax return.
People are TRPs if:
(a) they are paid
(b) to prepare or retain employees to prepare
(c) a substantial portion
(d) of any federal tax return.
Is a trustee who prepares a tax return for a trust considered a TRP?
No. And therefore need not comply with TRP standards.
Reasonable Cause
A cause outside the control of the taxpayer and not due to neglect, such as irregularities in mail delivery, death or serious illness, unavoidable absence, or disaster. A taxpayer, generally, has the burden of proving that a failure was due to reasonable cause.
Is a CPA license needed to prepare a tax return?
No.
A CPA license IS needed for:
- Auditing
- Examining prospective financial info in accordance with SSAE
A CPA is negligent when…
He fails to use the amount of care that a reasonable CPA would use.
For example, a reasonable CPA would likely correct errors that were discovered, and failure to do so would likely be negligent.
Which of the following requires consideration to be binding on the parties?
A. Material modification of a contract involving the sale of real estate.
B. Ratification of a contract by a person after reaching the age of majority.
C. A written promise signed by a merchant to keep an offer to sell goods open for 10 days.
D. Material modification of a sale of goods contract under the UCC.
A
A real estate contract cannot be modified unless additional or new consideration is given. Only UCC contracts for the sale of goods can be modified without new consideration.
Can past actions count as consideration for current promises?
no
For consideration to exist, a contract must be a bargained for exchange. If, for example, you took me to work yesterday, and I say today, “Because you gave me a ride yesterday, I promise to pay you $20,” you cannot hold me to the promise. There is no consideration.
parole evidence rule
The parol evidence rule applies to complete and unambiguous written contracts and prohibits any evidence that would modify or alter the contract. This rule would apply to oral agreements made “prior” to the formation of the written contract but does not apply to “subsequent” agreements.
Statute of Frauds
equires that all contracts of $500 or more for a sale of goods be in writing; services are not covered by the Statute of Frauds
Joint Tenancy
- requires the unities of time, title, interest, and possession
- requires that all tenants acquire their interests at the same time. If a tenant acquires his interest after the fact, he would be a tenant in common
- a joint tenant can convey his or her interest without permission, but the transferee can never be a joint tenant, only a tenant in common
Do state exemption statutes prevent all of a debtor’s personal property from being sold to pay a federal tax lien?
No. Exemption statutes never apply to all personal property.
Social Security benefits ARE exempt from garnishment.
Are creditors who do not agree to the Composition Contract bound by it?
No.
Assignment for the Benefit of Creditors
Debtor must voluntarily transfer certain assets to a trustee or an assignee who in turn offers each creditor a pro rata payment.
Fraud-in-law
A presumption of fraud
