Final answer:
A CPA must advise their client of any errors found in a tax return rather than immediately notifying the IRS. This is to maintain professional standards and confidentiality. The context of the question relates to a 2013 incident where the IRS improperly scrutinized tax-exempt status applications, leading to a Congressional investigation.
Step-by-step explanation:
If a CPA becomes aware of an error in a tax return, the professional standards and requirements for CPAs do not prescribe an immediate notification to the IRS. However, CPAs must advise their client of the error and the potential consequences. They have a responsibility to ensure the return is accurate, and they must take appropriate action within the bounds of their professional standards and client confidentiality.The question refers to an event that happened in 2013 when Congress noticed the IRS had given additional scrutiny to certain organizations applying for tax-exempt status. This led to outrage in Congress at the possibility the IRS would intentionally use its power to cause inconvenience. In response to these concerns, the House Committee on Oversight and Government Reform initiated an investigation into the IRS and thoroughly examined a number of high-ranking civil servants.