Matthew Bell, a salesman, couldn’t have been expected to know that CPAs are explicitly prohibited from charging contingent fees for tax return preparation.*** But Pam Williams apparently is not a CPA, so that was the deal that she and Mr. Bell struck. Does it seem fair to you that the Tax Court came down so hard on him for his reliance on Ms. Williams? Discuss. *** In the tax return preparation context, a contingent fee is one that is based on the amount of tax refund to be received and, as in Bell, is stated as a fixed (or sliding-scale) percentage of that refund. Contingent fees are prohibited for the simple and obvious reason that, if allowed, they would encourage falsification in order to produce or increase the amount of a refund. Contingent fees are, however, allowed in audit defense work and in certain other contexts
Matthew Bell, a salesman, couldn’t have been expected to know that CPAs are explicitly prohibited from charging contingent fees for tax return preparation.*** But Pam Williams apparently is not a CPA, so that was the deal that she and Mr. Bell struck. Does it seem fair to you that the Tax Court came down so hard on him for his reliance on Ms. Williams? Discuss.
*** In the tax return preparation context, a contingent fee is one that is based on the amount of tax refund to be received and, as in Bell, is stated as a fixed (or sliding-scale) percentage of that refund. Contingent fees are prohibited for the simple and obvious reason that, if allowed, they would encourage falsification in order to produce or increase the amount of a refund. Contingent fees are, however, allowed in audit defense work and in certain other contexts
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