Exam 26: Tax Practice and Ethics

The "IRS's attorney" is known as the Chief Counsel.

Loren Ltd.,a calendar year taxpayer,had the following transactions,all of which were properly reported on a timely filed return.Presuming the absence of fraud,how much of an omission from gross income must occur for Loren before the six-year statute of limitations applies? Show your computations.

For each of the indicated tax penalties, indicate the appropriate taxpayer defense. A letter may be used more than once. Not all of the letters need be used. a.Ignorance of the tax law b.Reasonable basis c.Reasonable cause d.Complexity of the tax law e.Substantial authority f.Disclosure on return -Substantial understatement of tax liability.

As part of a tax return engagement for XYZ Partnership,Enrolled Agent Wang can draft an amendment to the XYZ partnership agreement.

A(n) $____________________ penalty applies if the tax preparer does not sign the client's tax return.

An individual's amended tax return,computing a refund or amount due,generally uses Form ____________________.

The ____________________,a presidential appointee,is the "IRS's attorney."

Jaime's negligence penalty will be waived,under the reasonable cause exception.He told the court,"My taxes were wrong because I couldn't understand the tax law."

The Statements on Standards for Tax Services are issued by the:

A tax preparer is in violation of Circular 230 if he or she:

​This official does not report directly to the IRS Commissioner.

The privilege of confidentiality applies to a CPA tax preparer concerning the client's information relative to:

Match each of the following tax penalties with the type of tax penalty as specified by the Code. A letter can be used more than once. The correct solution may include more than one letter. a.Taxpayer penalty b.Tax preparer penalty c.Appraiser's penalty -Failure to file a tax return.

For each of the indicated tax penalties, indicate the appropriate taxpayer defense. A letter may be used more than once. Not all of the letters need be used. a.Ignorance of the tax law b.Reasonable basis c.Reasonable cause d.Complexity of the tax law e.Substantial authority f.Disclosure on return -Failure to pay a tax that is due.

Attorneys are allowed an "attorney-client privilege" of confidentiality with clients.Does a CPA tax preparer enjoy the same privilege? On which types of tax and financial work?

Under Circular 230,Burke cannot complete a client's original Form 1040 and charge a fee equal to one-third of the resulting refund.

A letter ruling should be requested when the taxpayer wants to know the IRS interpretation of how the tax law will be applied to a ____________________ (proposed,completed) transaction.

The taxpayer can avoid a valuation penalty for overstating the value of the charitable contribution of an artwork by showing that the deduction claimed was based on a qualified ____________________.

The Commissioner of the IRS is appointed by the:

CPA Shearer is required by AICPA tax ethics rules to inform her client Martinez of significant changes in the Federal income tax laws.