Discuss which penalties, if any, might be imposed on the tax adviser in each of

Question

Discuss which penalties, if any, might be imposed on the tax adviser in each of the following independent circumstances. In this regard, assume that the tax adviser: a. Suggested to the client various means by which to acquire excludable income. b. Suggested to the client various means by which to conceal cash receipts from gross income. c. Suggested to the client means by which to improve her cash flow by delaying for six months or more the deposit of the employees' share of Federal employment taxes. d. Failed, because of pressing time conflicts, to conduct the usual review of the clients tax return. The IRS later discovered that the return included fraudulent data. e. Failed, because of pressing time conflicts, to conduct the usual review of the clients tax return. The IRS later discovered a mathematical error in the computation of the personal exemption.

Explanation / Answer

a. suggesting the means of aquiring exempt income is not a crime.

b. suggesting how to conceal income is a crime and the tax advisor can be penalised by termination of tax advisory ceritificate.

c. delaying the employees share to be deposited with the government is a fault on the hand of the company so company has to pay tax on the employees share deducted by the company and not deposited. further the advisor will be have explain the resaon for suggesting such illigal act to the client, pay an amount as penalty equivalent to the evaded tax.

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