Vee corp. retained Water, CPA, to prepare its 2014 income tax return. During the engagement, Water discovered that Vee had failed to file its 2009 income tax return. What is Water's professional responsibility regarding Vee's unfiled 2009 income tax return?
a. Prepared Vee's 2009 income tax return and submit it to the IRS.
b. Advise Vee that the 2009 income tax return has not been filed and recommend that Vee ignore filing its 2009 return since the statute of limitations has passed.
c. Advise the IRS that Vee's 2009 income tax return has not been filed.
d. Consider withdrawing from preparation of Vee's 2014 income tax return until the error is corrected.
Answer: D
Tax
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- Income in respect of a cash-basis decedent
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