Betty hires Sam, a C.P.A., to prepare her current federal income tax return. In preparing the return, Sam incorrectly computes the total of her charitable contributions by accidentally adding the same amount twice. This overstates her deductions and understates her tax liability.
I.Sam is subject to a penalty for the preparation of a fraudulent tax return.
II.Sam is subject to a penalty for having taken an unrealistic tax position.

Question

Betty hires Sam, a C.P.A., to prepare her current federal income tax return. In preparing the return, Sam incorrectly computes the total of her charitable contributions by accidentally adding the same amount twice. This overstates her deductions and understates her tax liability.
I.Sam is subject to a penalty for the preparation of a fraudulent tax return.
II.Sam is subject to a penalty for having taken an unrealistic tax position.
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Quizplus · Accepted Answer

Neither statement is correct. Sam made an error in calculation, but it was not intentional or fraudulent. He may be subject to an accuracy-related penalty, but not a penalty for fraud or taking an unrealistic tax position.

Betty Hires Sam, a C