Yin-Li is the preparer of the Form 1120 for Cloves Corporation. On the return, Cloves claimed a deduction that the IRS later disallowed on audit. Compute the tax preparer penalty that could be assessed against Yin-Li in each of the following independent situations.
Definitions:
SEC Rule 10b-5
A regulation enacted by the U.S. Securities and Exchange Commission that prohibits fraud in the sale of securities.
Intentional Conduct
Actions undertaken with awareness and deliberate intent, often relevant in establishing liability or culpability in legal cases.
Negligence
A lack of exercising the level of caution that a reasonably careful person would have shown in similar circumstances, leading to injury or damage.
Protected Individuals
Persons who are afforded special protections under the law, often due to their status, such as minors, disabled persons, or protected witnesses.
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