A Client Wants to Take a Tax Return Position with Less

question 93

Multiple Choice

A client wants to take a tax return position with less than a 10% probability of being upheld in court. The CPA should

• A) take the client's desired position, but not sign the tax return.
• B) ask the client to sign a waiver of his right to sue the CPA in the event the IRS disallows the position.
• C) inform the client that the position does not have a realistic possibility of success.
• D) take the client's desired position and sign the return as usual.

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Definitions:

Revenue

The total income generated by the sale of goods or services related to a company's primary operations before any costs or expenses are deducted.

Account Receivable

Signifies the amount of money that customers owe a company for products or services that have been provided but are still unpaid.

Accounting Equation

The foundational formula in accounting, represented as Assets = Liabilities + Equity, underscoring the balance sheet structure.

Stockholders' Equity

The ownership interest of shareholders in the assets of a company, calculated as total assets minus total liabilities.