Your Client Claimed Seven Children as Dependency Exemptions on His

question 27

Multiple Choice

Your client claimed seven children as dependency exemptions on his tax return last year.You now have learned that the client only has three children,of which only two qualify as dependents.You have advised your client to amend his prior-year tax return to correct for this error,but your client has refused to do so.However,your client has agreed to only claim the proper number of dependency exemptions during the current and future years.You:

• A) Have a duty to resign and a duty to inform your client about the tax penalties associated with the commission of tax fraud
• B) Have a duty to inform the IRS about the errors in your client's prior-year return and may do so anonymously
• C) Have a duty to inform your client about tax fraud penalties, but do not have a duty to resign
• D) Have a duty to inform your client to contact an attorney to discuss the consequences of committing tax fraud, and should consider resigning

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Definitions:

Reciprocity Principle

A social norm suggesting that people are likely to respond to actions with similar actions, contributing to cooperation and social exchange.

Compliance

Superficial, public and transitory change in behaviour and expressed attitudes in response to requests, coercion or group pressure.

Social Responsibility Norm

The idea that we should help people who are dependent and in need. It is contradicted by another norm that discourages interfering in other people’s lives.

Individualistic Societies

Societies that prioritize the needs and rights of the individual over those of the group or community.