Betty hires Sam, a C.P.A., to prepare her current federal income tax return for the first time. In preparing the return, Sam determines an error in last year's return. Sam should:
I.Do nothing and see if the IRS catches the error.
II.Inform Betty and recommend corrective measures.
III.Immediately contact the IRS
IV.Immediately call Betty and tell her he can not complete this year's return

Question

Betty hires Sam, a C.P.A., to prepare her current federal income tax return for the first time. In preparing the return, Sam determines an error in last year's return. Sam should:
I.Do nothing and see if the IRS catches the error.
II.Inform Betty and recommend corrective measures.
III.Immediately contact the IRS
IV.Immediately call Betty and tell her he can not complete this year's return
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Quizplus · Accepted Answer

Sam should inform Betty and recommend corrective measures because it is his professional responsibility to ensure the accuracy of both the current and prior year's tax returns. Simply waiting for the IRS to catch the error could lead to penalties and interest for Betty. Contacting the IRS immediately without informing Betty and recommending corrective measures could also cause confusion and unnecessary stress. Calling Betty and informing her that he cannot complete this year's return is not necessary in this situation.

Betty Hires Sam, a C