Which of the Following Is Subject to Tax Return Preparer

question 13

Multiple Choice

Which of the following is subject to tax return preparer penalties?

• A) Meredith is the director of Federal taxes for a C corporation.
• B) Sammy is a volunteer who prepares returns at the retirement home under the IRS Tax Counseling for the Elderly program.
• C) Abbie prepares her mother's tax returns for $50 a year. A CPA, Abbie would charge a client $750 for completing a similar return.
• D) Lizzie, the firm's administrative assistant, makes copies of returns and assembles the mailings that the client must make to the taxing agencies.

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Definitions:

Traditional Retirement Plan

A tax-deferred retirement savings account where contributions may lower current taxable income and earnings grow tax-free until withdrawn.

Roth Retirement Plan

A type of retirement savings plan where contributions are made with after-tax dollars, and qualified withdrawals in the future are tax-free.

Income Growth

The increase in the amount of money earned from investments or employment over time, reflecting economic expansion or personal financial improvement.

Effective Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing the total tax paid by the taxable income.