Tax Fraud Case Summary

A few controls that an organization can look into to reduce the danger of cash receipts deception incorporate utilizing cash registers that include interior tapes that can't be altered, carrying out surprise asset counts and contrasting money receipt tapes with actual money within the drawer, encouraging clients to keep their receipts by expressing that they are needed for exchanges, consecutively numbering all money receipts and carrying out reconciliations and abstracting bond insurance on every worker taking care of money

1- Jonathan was notified by the IRS that he should appear at the local IRS district office with support for his 2013 travel and entertainment expenses as well as his charitable deductions. It was a really nice day, so Jonathan went skiing rather than to the appointment. On the way to the ski resort Jonathan called his tax preparer, Sue Johnson, CPA, and told her that he wasn’t going to the appointment. What penalty or penalties could Jonathan be subject to? What about the Sue Johnson, CPA?

a. Liability exceptions – tax avoidance or transfer was not for a bona fide business purpose

Code Summary: Code Section 7525 discusses the rights of confidentiality that a taxpayer would have between his or her tax practitioner that is a federally authorized tax practitioner. In order to be a federally authorized tax practitioner, the practitioner must be authorized to practice before the Internal Revenue Service. The code section states that the communication between the taxpayer and the tax practitioner with respect to tax advice is protected under the same confidentiality protections that would exist between a taxpayer and an attorney. Some exceptions to this confidentiality do exist however. A taxpayer and tax practitioner are not protected if the details of the communication involve tax shelters, which is an investment strategy

This information is being furnished to the Internal Revenue Service. If you are required to file a tax return, a negligence penalty or other sanction may be imposed on you if this income is taxable and you fail to report it.

H&R Block’s Tax Services segment provides income tax return preparation, electronic filing and other services and products related to income tax return preparation. Clients are offered a number of options for receiving their income tax refund, including a check directly from the IRS, an electronic deposit directly to their bank account, a prepaid debit card, a refund anticipation loan (RAL) or a refund anticipation check (RAC). Major revenue sources include; fees earned for tax preparation services performed at company-owned retail tax offices, royalties from franchise retail tax

Although this can make the submission process more efficient, every company is still responsible for submitting accurate C-Forms and B-Forms before the deadlines. If a vendor makes errors when filing the forms with the IRS, the employer is liable and can face penalties. The third-party vendors are also subject to the same requirements applicable to third-party tax return preparers.

Sec. 10.28 of the Treasury Department Circular No. 230 states that the practitioner must return any records of the client that are needed for the proper compliance with his or her tax obligations. The practitioner may not refuse to comply with this section even if the client has not paid for the services provided. In such case the practitioner may only return the documents necessary for filing of the return but must still provide a reasonable access to any records the client may need in order to comply with the Federal tax obligations. “Any records” include all electronic and written documents previously provided to the practitioner by the client as well as any information prepared by the client or a third party in the process. This term also

Question 10. 10. (TCO 11) The privilege of confidentiality applies to a CPA tax preparer concerning the client’s information relative to (Points : 2)

I. A CPA leaving a firm may take copies of information contained in client files to assist another firm in serving that client.

Will provide complete and accurate income documents and other information for the preparation of the tax returns. We agree to file an amended return for an additional fee should we discover that information provided was incomplete or inaccurate.

May the IRS discuss this return with the preparer shown below (see instructions)? Yes No

The first step under Trevino and Nelson is to gather the facts. In this case, the manager was not aware of or chose to ignore the facts surrounding the Italian tax system. The knowledge that the bank had with respect to the Italian tax system was therefore incomplete. The facts in this case included the mores surrounding the Italian system of tax collection and negotiation. The manager was informed that it would be advisable to declare a low amount of income and was subsequently informed of the need to hire a commercialista to handle the negotiations. The manager failed to heed this advice, in particular because he thought that these practices were unethical. The manager should have gathered the facts with respect to the mores and customs of the Italian tax collection system.

Many organizations have been in the news over the past few years due to accounting ethical breaches that have affected their customers, employees, and the general public. I searched the Internet to locate a story in the news that depicts an accounting ethical breach. I selected Krispy Kreme. I enjoy their hot donuts and was curious to learn more about how they played with the numbers. For some reason I always want to dig into the trickery behind the manipulation of financial statements.

What is the most common problem in the country we live in? Tax fraud. It is said to be about 80% of the world is doing it. Every country in the world needs taxes from the people to keep the economy running well. That is why we pay for everything in the world, even the parking lot we park our cars when going to the mall. When we pay taxes it allows the country to not have depth, pay the military, be used for government purposes, and also get back to us too. What is tax fraud? It is when someone pays too little or claiming they make less than what they actually make. Tax fraud can also mean that someone steals your identity and your social security to steal your taxes. Why do people often do tax fraud? People do it to gain easy money without having to work hard for it. Study shows that in 2006 an estimated number of $450 billion taxes were not paid. This comes to show that the majority of the US population is refusing to pay taxes. People sometimes think that when we pay taxes, the government gets paid and spend it for their personal use. Think about how the country work. Paying taxes can benefit us in many ways. We need free education and free health care but don’t want to pay taxes. How can the government continue with this program if we do not contribute? What about when you are getting robbed or when there is a fire, who do you call? Of course, we all call 911. If we don’t pay taxes or commit tax fraud, how are we going to keep these public services going forward? The