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:

Distribution Intensity

indicates the level of market coverage aimed for a product, ranging from intensive, selective, to exclusive distribution strategies.

Exclusive

Items or services that are only available to a specific group, location, or timeframe, often implying high quality or unique status.

Organic Food Products

Organic food products are those made from ingredients that were grown without the use of synthetic pesticides, genetically modified organisms, or petroleum-based fertilizers.

Omnichannel Marketing

A strategic, multichannel approach that aims to provide a seamless and integrated customer experience, no matter how or where a customer reaches out.