Imagine a situation in which a client under audit by the IRS omitted $100,000 in income.

• Examine the significant factors relative to the omission by the client that would result in a criminal investigation rather than a civil fraud proposal by the IRS.

• Based on the guidance in Circular 230, speculate as to which provision the CPA violated and the extent of any sanctions for CPA for not detecting the omission.

• Based on the guidance in Circular 230, speculate as to which provision the CPA violated and the extent of any sanctions for CPA for not detecting the omission that would result in a criminal investigation rather than a civil fraud proposal by the IRS.

Answer rating: 100% (QA)

A major factor relative to a situation whereby a client under audit by the IRS omitted 100000 in income relates to the difference between fraud and honest mistakes or negligence Essentially while both ... View the full answer