Question 1

The client has decided to dispute the Revenue Agent's Report.What is the tax advisor's next step?

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Question 2

What taxpayer penalties can arise when a tax return includes an item that is assigned a fair market value?

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Question 3

Circular 230 requires that the tax practitioner use the "best practices" of the tax profession in carrying out a tax engagement.Specify what some of these best practices entail.

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Question 4

Why is it advantageous for both the taxpayer and the IRS to have tax returns filed electronically?

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Question 5

Does the tax preparer enjoy an "attorney-client privilege" of confidentiality with his or her clients?

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Question 6

Carole,a CPA,feels that she cannot act as an aggressive advocate for tax clients in today's environment.What aspects of the ethical conduct of a tax practice might have influenced Carole's attitude?

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Question 7

CPA Jennifer has heard about the AICPA's Statements on Standards for Tax Services.Although Jennifer is a licensed CPA in her state,she is not a member of the AICPA.How do the Statements affect Jennifer's tax practice?

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Question 8

In connection with the taxpayer penalty for substantial understatement of tax liability,what defenses (if any)are available?

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Question 9

Describe how the IRS applies interest rules in the context of a tax controversy.

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Question 10

How is the tax law affected by Federal criminal statutes?

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Question 11

If a taxpayer is audited by the IRS and is unwilling to accept the findings of the agent,how does the taxpayer's audit strategy change when the dispute is taken to the IRS Appeals Division? Hint: What are the "hazards of litigation?"

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Question 12

Over the last two decades,the Treasury has enforced numerous means by which to identify those taxpayers who use tax shelter devices,and to eliminate any resulting losses and deductions.Special reporting requirements apply to transactions that the IRS has labeled "tax shelters." Describe those requirements.

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Quiz 17: Tax Practice and Ethics