Chapter 1, Problem 37DQ

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

The Taxpayer Advocate Service (TAS) can help taxpayers with what type of assistance? As a first step, rather than dealing with the IRS, when the taxpayer believes there are unusual circumstances involved. When the taxpayer feels the resolution applied by the IRS is unreasonable. If there is a financial difficulty, emergency, or hardship and the IRS needs to move faster than normal. When an audit results in a significant change and the deadline for appeal has passed.   Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

You are assisting a client with a transaction that produces a most favorable tax result. The client told you the outcome is dependent on one court case. What should you do? a. Nothing. Your due diligence obligations allow you to rely in good faith on information furnished to you by the client; you are permitted to rely on the client's judgment. 6. Check with the client's auditor to ensure the numbers are valid; then you can recalculate intended tax benefits. c. Help the client by getting a head start on the tax return presentation of the transaction; the better the presentation, the less likely it will be audited by the IRS. d. Analyze the case to make sure the holding has not been reversed, the client's facts are similar to those described in the case, and the law cited in the case is still valid.