Which, If Any, of the Following Could Result in Penalties

question 18

Multiple Choice

Which, if any, of the following could result in penalties against an income tax return preparer? I. Knowing or reckless disclosure or use of tax information obtained in preparing a return.
II) A willful attempt to understate any client's tax liability on a return or claim for a refund.

• A)I only
• B)II only
• C)neither I nor II
• D)both I and II

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Definitions:

Massage Numbers

Informal and potentially unethical practices of manipulating financial data to present more favorable results than the actual performance.

Negative Covenant

A clause in a loan or bond agreement that restricts certain activities by the borrower to protect the lender's interests.

Capital Expenditures

Capital expenditures are funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed in cash.