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Business, 23.11.2021 22:30 vinniemccray70

A taxpayer presented her tax return preparer, Dev Powell, with documentation supporting income she had earned as an independent contractor. Although Powell knew that the taxpayer’s income should be reported on the taxpayer’s Form 1040 (U. S. individual income tax return), he intentionally did not report the income on the taxpayer’s tax return. Powell understated the taxpayer’s liability because he believed keeping the tax liability low would help retain the taxpayer as a client. In this situation, Powell may be subject to which of the following penalties? a. Understatement of taxpayer’s liability due to failure to follow substantial authority by the tax return preparer
b. Failure to file correct information returns by a tax return preparer
c. Wrongful disclosure or use of tax return information by the tax return preparer
d. Understatement of taxpayer’s liability due to willful or reckless conduct of the tax return preparer

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