According to the AICPA's Statements on Standards for Tax Services, what duties does the tax practitioner owe the client?

What will be an ideal response?


The tax practitioner owes the client the following duties: (1) to inform the client of (a) the potential adverse consequences of a tax return position, (b) how the client can avoid a penalty through disclosure, (c) errors in a previously filed tax return, and (d) corrective measures to be taken; (2) to inquire of the client (a) when the client must satisfy conditions to take a deduction and (b) when information provided by him or her appears incorrect, incomplete, or inconsistent on its face, and (3) not to disclose tax-related errors without the client's consent.

Business

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During 2016, Frank Company incurred $200,000 in legal fees in defending a patent with a carrying value of $3,500,000 against an infringement. Farver's lawyers were successful with the defense of the patent. The legal fees should be

A) expensed in 2016 and classified as ordinary expense. B) classified as an extraordinary item on the income statement for 2016. C) capitalized and amortized over the remaining legal life of the patent. D) capitalized and amortized over the remaining economic life or legal life of the patent, whichever is shorter.

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Purchase decision making usually begins with information search and then moves to evaluation of alternatives

Indicate whether the statement is true or false

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Which of the following is a position power?

A. leadership power B. active power C. legitimate power D. referent power

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The Sarbanes-Oxley Act was passed by the Public Company Accounting Oversight Board

Indicate whether the statement is true or false

Business