A client wants to take a tax return position with less than a 10% probability of being upheld in court. The CPA should
A)take the client's desired position, but not sign the tax return.
B)inform the client that the position does not have a realistic possibility of success.
C)ask the client to sign a waiver of his right to sue the CPA in the event the IRS disallows the position.
D)take the client's desired position and sign the return as usual.

Question

Quizplus · Accepted Answer

As a CPA, it is important to maintain professional ethics and integrity. Giving advice to a client that has less than a 10% probability of being upheld in court could put the CPA's license and reputation at risk. Therefore, the best course of action is to inform the client that the position does not have a realistic possibility of success. This would allow the client to make an informed decision and potentially avoid penalties and interest in the future.

A Client Wants to Take a Tax Return Position with Less