CPA - REG: R4 Professional
Responsibilities & Federal Tax
Procedure
Why does the IRS send out a 30-day letter?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSThis letter is sent out
following an audit when an agreement cannot be reached between the taxpayer and the
revenue agent.
What is the purpose of the 30-day letter from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSIts purpose is to inform the
taxpayer that they have 30 days to request an administrative appeals conference or agree to
the IRS proposed adjustment.
If a taxpayer needs help with a specific tax issue related to a proposed transaction, what
should the taxpayer ask for from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSA private letter ruling
What is a private letter ruling from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSit is the IRS's interpretation
fo the federal tax law as it applied to a specific taxpayer situation. It is issues at the
taxpayers request.
What must be proven by a client to hold a CPA liable for Ordinary Negligence?
R4:M4 - Legal Duties and Responsibilities - ANSFailure to provide the duty of care and loss
--- i.e. failed to exercise due care.
Examples Include:
- Failure to properly supervise and review an engagement
- Failure to warn of known Internal Control Weakness
What is the best defense a CPA can argue against a claim of Ordinary Negligence?
R4:M4 - Legal Duties and Responsibilities - ANSThe negligence was not the proximate
cause of the client's losses.
Define Gross Negligence.
Responsibilities & Federal Tax
Procedure
Why does the IRS send out a 30-day letter?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSThis letter is sent out
following an audit when an agreement cannot be reached between the taxpayer and the
revenue agent.
What is the purpose of the 30-day letter from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSIts purpose is to inform the
taxpayer that they have 30 days to request an administrative appeals conference or agree to
the IRS proposed adjustment.
If a taxpayer needs help with a specific tax issue related to a proposed transaction, what
should the taxpayer ask for from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSA private letter ruling
What is a private letter ruling from the IRS?
R4:M3 - Federal Tax Procedures and Taxpayer Penalties - ANSit is the IRS's interpretation
fo the federal tax law as it applied to a specific taxpayer situation. It is issues at the
taxpayers request.
What must be proven by a client to hold a CPA liable for Ordinary Negligence?
R4:M4 - Legal Duties and Responsibilities - ANSFailure to provide the duty of care and loss
--- i.e. failed to exercise due care.
Examples Include:
- Failure to properly supervise and review an engagement
- Failure to warn of known Internal Control Weakness
What is the best defense a CPA can argue against a claim of Ordinary Negligence?
R4:M4 - Legal Duties and Responsibilities - ANSThe negligence was not the proximate
cause of the client's losses.
Define Gross Negligence.
