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:

Residual Income

The income that remains after subtracting all required costs of capital from operating income, a measure of profitability.

Minimum Required Rate

The lowest rate of return that an investment must yield to be considered acceptable, often tied to the cost of capital or inflation.

Investment Opportunity

A financial investment or asset that has the potential to yield returns or profits.

Residual Income

The income that remains after deducting all required costs of capital from the operating income, used as a performance measure.