A Tax Return Preparer May Prepare a Tax Return Solely

question 6

Multiple Choice

A tax return preparer may prepare a tax return solely based on information furnished by a client:

• A) If the information appears to be reliable on its face
• B) Even if the information appears to be inconsistent with reality
• C) Even if the preparer knows facts that would make a person question the authenticity of the furnished information
• D) As long as the taxpayer agrees in writing to accept full responsibility for the authenticity of the furnished information

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Definitions:

Deferred Tax Liability

A tax obligation recognized in the financial statements representing taxes that are owed but not yet paid.

Long Service Leave

A paid absence after the employee has provided a long period of continuous employment.

Company Tax Rate

The percentage rate at which a company is taxed on its profits by the government.

Tax Deductible

Expenses that can be subtracted from gross income to reduce the amount of income subject to tax.