Question

The tax practitioner owes the client the following duties: (1) to inform the client of (a) the

potential adverse consequences of a tax return position, (b) how the client can avoid a penalty through
disclosure, (c) errors in a previously filed tax return, and (d) corrective measures to be taken; (2) to
inquire of the client (a) when the client must satisfy conditions to take a deduction and (b) when
information provided by him or her appears incorrect, incomplete, or inconsistent on its face, and (3) not
to disclose tax-related errors without the client's consent.

Answer 1

Tax practitioners have specific duties towards their clients, related to disclosure of tax return positions, errors in filing, and confidentiality. They operate within tax systems designed to be fair, simple, and efficient, using forms like the 1040 to report taxes, all within a framework influenced by government policies and economic implications.

Step-by-step explanation:

The duties a tax practitioner owes to their client include informing them of the potential adverse consequences of a tax return position, how to avoid penalties through disclosure, errors in previously filed returns, and necessary corrective measures. They must also inquire when deductions are taken and if provided information seems inaccurate or inconsistent, and finally, they must respect client consent before disclosing tax-related errors.

This knowledge is essential in understanding the principles surrounding taxation, like equitable, simple, and efficient tax collection, and concepts such as the benefit principle and ability to pay principle. By ensuring taxes meet these requirements, the tax system remains transparent and understandable to taxpayers, fostering acceptability.

Tax forms, like the 1040 in the United States, are crucial in calculating and reporting tax liabilities, and these are influenced by changes in the tax code which can affect the economy significantly.