**Tax Filing Guidance: Addressing Prior-Year Omissions***Scenario:*While preparing a 2021 tax return for a taxpayer named Tyreek, a paid tax preparer discovered that certain items of income were omitted in the prior-year tax return. The preparer should promptly inform the taxpayer of this omission and:1. **Advise them of the consequences** of not amending the previous year's return. 2. **Make an adjustment for the previous year's omission** on the current-year return.3. **Refer the taxpayer to his supervisor** for further assistance.4. **Refuse to prepare the current-year return** until the prior-year return is amended. 5. **Mark for follow up** - Indicate that this matter requires further attention and should be revisited to ensure proper resolution.*Educational Note:*Understanding the appropriate steps to take upon discovering an omission in a tax return is crucial for both taxpayers and tax preparers. It's important to address such issues promptly to comply with tax laws and avoid potential penalties. Always consult a tax professional if you encounter similar scenarios.

Facts provided: While preparing a 2021 return for a taxpayer it was determined that the taxpayer had omitted certain items of income when they filed their prior-year return. Solution- Tyreek should resolve the situation by promptly advising the taxpayer about the omission and make an adjustment for the previous year's omission on the current year return. 2nd option is correct. With respect to option 1, advising them of consequences is not correct. Refering the taxpayer to supervisor won't help either hence option 3 is incorrect as well. Refusal to prepare the current year return isn't a sound option and hence option 4 is incorrect.

Business

Accounting

Question 44 of 50. While preparing a 2021 return for a taxpayer, Tyreek, a paid preparer, determined that the taxpayer had omitted certain items of income when they filed their prior-year return. Tyreek should advise the taxpayer promptly of the fact of such omission and: O Advise them of the consequences of not amending the previous year's return. on the current-year return.

Question 44 of 50. While preparing a 2021 return for a taxpayer, Tyreek, a paid preparer, determined that the taxpayer had omitted certain items of income when they filed their prior-year return. Tyreek should advise the taxpayer promptly of the fact of such omission and: O Advise them of the consequences of not amending the previous year's return. on the current-year return.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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