A Tax Preparer Is in Violation of Circular 230 If

question 136

Multiple Choice

A tax preparer is in violation of Circular 230 if he or she:

• A)Files a tax return that includes a math error.
• B)Charges a fee to prepare an original Form 1120 equal to one-third of the taxpayer's refund due.
• C)Fails to inform the IRS of an error on the client's prior-year return.
• D)All of the above are Circular 230 violations.

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Definitions:

Cash Flow Estimates

Projections or forecasts of a company's future financial liquidity over a specific period of time, including incoming and outgoing cash.

New Ventures

Businesses or projects initiated by entrepreneurs, often characterized by innovation, high risks, and high rewards.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, representing the benefits one could have received by taking an alternative action.

Sunk Costs

Expenses that have been spent and cannot be retrieved.