Question 1. A(n) $ penalty applies if the tax preparer does not sign th

1. A(n) $ penalty applies if the tax preparer does not sign the client’s tax return.

2. The tax workpapers prepared as part of an independent financial audit are not privileged communications that can be kept confidential from an IRS subpoena.

3. A privilege of exists between a tax preparer and the client as to tax advice rendered.

4. A(n) member is required to follow the Statements of Standards for Tax Services in conducting a tax practice.

5. Maria did not pay her Federal income tax on time. When she eventually filed the return, she reported a balance

due. Compute Maria’s failure to file penalty in each of the following cases. Disregard any failure to pay penalty.

a. Three months late, $500 additional tax due.

b. Four months late, $2,000 additional tax due.

c. Ten months late, $10,000 additional tax due.

d. Four months late due to fraud by Maria, $10,000 additional tax due.

e. Fifteen months late due to fraud by Maria, $10,000 additional tax due.

6. Quon filed his Federal income tax return on time, but he did not remit the full balance due. Compute Quon’s failure

to pay penalty in each of the following cases. The IRS has not yet issued a deficiency notice.

a. Three months late, $5,000 additional tax due.

b. Nine months late, $5,000 additional tax due.

c. Five years late, $5,000 additional tax due.

7. Compute the failure to pay and failure to file penalties for John, who filed his 2012 income tax return on December 14, 2013, paying the $10,000 amount due. On April 1, 2013, John submitted a six-month extension of time in which to file his return; he paid no tax with the extension request. He has no reasonable cause for failing to file his return by October 15, or for failing to pay the tax that was due on April 15, 2013. John’s failure to comply with the tax laws was not fraudulent.

8. Silvio, a cash basis, calendar year taxpayer, filed his income tax return 75 days after the due date. Silvio never extended his return, and with the return he paid the full amount of taxes that were due. What penalties will Silvio incur, and how much is the penalty if his additional tax is $5,000? Disregard any additional interest he must pay.

9. Clarita underpaid her taxes by $50,000. Of this amount, $35,000 was due to negligence on her part, as her record- keeping system is highly inadequate. Determine the amount of any negligencepenalty.

10. Linwell underpaid his taxes by $250,000. Portions of the underpayment were attributable to negligence ($210,000) and to civil fraud ($40,000). Compute the total penalties incurred.