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Unformatted text preview: Chapter 18 Criminal Tax Procedure 1. Answer: No one alternative suggested in this question is necessarily the best in all circumstances. The danger in alternative (A) in grilling Harry to find out if he has a satisfactory explanation is that Harry may disclose that there is no satisfactory explanation. Once he has admitted this to you, your information regarding it is not privileged. If Harry does have a convincing explanation, it may be better to prepare a pro forma amended return to take to the office examination appointment. Because the office examiner routinely runs a cash T-account, the understatement is going to be discovered anyway. Your having prepared the pro forma amended return may speed up the audit appointment. On the other hand, if Harry does admit to you that there is no innocent explanation for the understatement, you should take no further steps except to refer Harry to a tax attorney. I t is possible that by eliciting this information from him you have already jeopardized Harrys situation. (B) Answer: Aside from the serious accountant-client problem suggested by this method, it is quite likely that coercing Harrys signature on an amended return and then filing it with the agent will not do any good. I t is probable that the agent will ask for some explanation for the understatement, and that if you refuse to provide one, he will consider referring the case to Criminal Investigation. Filing the amended return after the audit appointment is scheduled would not be considered voluntary disclosure, because of the substantial probability that the...
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This note was uploaded on 09/08/2011 for the course ECON 3301 taught by Professor Clavin during the Spring '10 term at Hartford.
- Spring '10