Silvia prepares federal corporate income tax returns for Trade & Pawn Stores, Inc., and other firms. Under the Internal Revenue Code, with respect to an understatement of a client's tax liability, Silvia may be liable for

Question

Silvia prepares federal corporate income tax returns for Trade & Pawn Stores, Inc., and other firms. Under the Internal Revenue Code, with respect to an understatement of a client's tax liability, Silvia may be liable for​

Quizplus · Accepted Answer

According to the Internal Revenue Code, preparers of tax returns can be held liable for an understatement of a client's tax liability due to negligent or willful conduct. Therefore, option A is correct. Options C and D are incorrect as they only cover one type of conduct, whereas, the Code allows for liability for both types of misconduct. Option B is incorrect as it indicates that there is no liability, which is not accurate.

Silvia Prepares Federal Corporate Income Tax Returns for Trade