According to the AICPA statement on Standards for Tax Services, which of the following statements is correct regarding the standards a CPA should follow when recommending tax return positions and preparing tax returns?
a. A CPA may recommend a position that the CPA concludes is frivolous as long as the position is adequately disclosed on the return.
b. A CPA may recommend a position in which the CPA has a good faith belief that the position has a realistic possibility of being sustained if challenged.
c. A CPA will usually NOT advise the client of the potential penalty consequences of the recommended tax return position.
d. A CPA may sign a tax return as preparer knowing that the return takes a position that will NOT be sustained if challenged.
Answer: D
Tax
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