The Requirement That There Should Be Reasonable Support for a Tax

question 23

Multiple Choice

The requirement that there should be reasonable support for a tax return position before a CPA recommends it to a client most directly aligns with which tax standard?

• A) The tax return should not be based on a frivolous position
• B) There is a realistic possibility of success if the tax position is challenged
• C) It is more likely than not that the tax position will be upheld if challenged
• D) Contingent fees cannot be accepted when providing tax services for an audit client

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Definitions:

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations.

Medicare

A federal program that provides for (1) compulsory hospital insurance for senior citizens, (2) low-cost voluntary insurance to help older Americans pay physicians’ fees, and (3) subsidized insurance to buy prescription drugs. Financed by payroll taxes.

Social Security

The social insurance program in the United States financed by federal payroll taxes on employers and employees and designed to replace a portion of the earnings lost when workers become disabled, retire, or die.

Medicaid

A federal program that helps finance the medical expenses of individuals covered by the Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF) programs.