Mr Braco Is an Enrolled Agent Who Prepares Tax Returns

question 68

Multiple Choice

Mr. Braco is an enrolled agent who prepares tax returns for a living. In preparing Mr. and Mrs. Colter's Form 1040, Mr. Braco claimed a deduction based on an unreasonable legal position. Mr. Braco's compensation for the return was $3,800. What is the consequence to Mr. Braco if the IRS disallows the deduction?

• A) The IRS can terminate Mr. Braco's status as an enrolled agent.
• B) The IRS can impose a $1,900 penalty on Mr. Braco.
• C) The IRS can impose a negligence penalty on the Colters but can't penalize Mr. Braco.
• D) The IRS can impose a civil fraud penalty on Mr. Braco.

---

Definitions:

Predisposition

A natural inclination or tendency to behave in a particular way or to develop a certain condition.

Positive/Negative Way

Pertains to the manner in which something can have a beneficial or detrimental impact or approach.

Job Satisfaction Questionnaires

Tools or surveys used to assess how content an individual is with his or her job.

Beliefs

Deeply held convictions or understandings that an individual considers to be true, shaping their thoughts and actions.