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:

Opportunity Cost

The loss of potential gain from other alternatives when one particular alternative is chosen.

Rate Of Interest

The percentage of an amount of money which is charged for its use per period of time, often expressed annually.

Unit Banking States

States in the U.S. where banks are required to operate only a single banking office, limiting their physical presence and expansion.

Bank Charter

A legal document that authorizes the creation of a banking institution and outlines its operations.