In the course of researching whether a particular tax position of your tax client satisfies the realistic possibility of success standard, you discover that another taxpayer took the same position on a tax return several years ago and that the return was audited by the IRS. You discover that the IRS revenue agent who conducted the audit was aware of the position and decided the treatment on the return was correct. The revenue agent’s report, however, made no mention of the position. Do you believe the determination by the revenue agent provides sufficient authority for purposes of the realistic possibility of success standard with respect to your client’s tax position? Explain why or why not in light of SSTS No. 1. Assume you adopt that position, what should your tax client do as a result and why?
Answer to relevant QuestionsAssume that the CPA firm of Giants & Jets LLP audits Knickerbocker Systems Inc. The controller of “the Knicks” happens to be a tax expert. During the current tax season, Giants & Jets gets far behind in processing tax ...In 2004, the Government Accountability Office (GAO) conducted an investigation of tax shelters of 61 Fortune 500 users of tax shelters provided by accounting firms that were their external auditors covering more than one ...1. Assume that both Popperson and Snow are CPAs. Do you think Snow violated his confidentiality obligation under the AICPA Code by informing Popperson about the faulty equipment at CSM? Why or why not. As a licensed CPA ...1. In commenting on the findings in the consultant’s report, the then-chief accountant of the SEC, Lynn E. Turner, said, “This report is a sobering reminder that accounting professionals need to renew their commitment to ...Some criticize the accounting profession for using expressions in the audit report that seem to build in deniability should the client commit a fraudulent act. What expressions enable the CPA to build a defense should the ...
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