Which of the Following Is CORRECT About a CPA's Responsibility

question 35

Multiple Choice

Which of the following is CORRECT about a CPA's responsibility with regard to tax return positions under Statements on Standards for Tax Services No. 1 (SSTS No. 1) :

• A) A CPA may not base his or her position on authority that is not approved by the IRS under Section 6662 (accuracy-related penalty).
• B) A CPA may sign a return which has a tax position that has a realistic possibility of being sustained on the merits.
• C) A CPA may not sign a return which has any tax position that is not fully disclosed.
• D) All of the above statements are correct.

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Definitions:

Common Stock

Equity ownership in a corporation, with voting rights and potential dividends.

Corporate Form

A legal entity structure for businesses, distinguishing the business as a separate entity from its owners.

Collateral

Represents an asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

National Exchange

A nationwide, regulated market for the trading of securities, such as the New York Stock Exchange (NYSE) or the National Association of Securities Dealers Automated Quotations (NASDAQ).