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ACC571 Article Review - Article Review Article Review Tread...

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Article Review 1 Article Review: “Tread Carefully: What CPAs Should Know about Tax Fraud” Strayer University Article Review: “Tread Carefully: What CPAs Should Know about Tax Fraud” Summary
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Article Review 2 The article “Tread Carefully: What CPAs Should Know about Tax Fraud” written by Hibschweiler and Salzman was published in “Tax Adviser” in 2009. It presents tax statutes and information related to tax fraud that CAPs should know about. The penalty for civil tax fraud is 75 percent of the underpayment attributable to fraud. It does not apply to any underpayment when the taxpayer can show reasonable cause and good faith efforts to pay the correct tax. The best example of reasonable cause is when a taxpayer acts on advice received from the IRS or a tax professional. In a civil tax fraud case, the IRS has the burden of proof. The Internal Revenue Service (IRS) agents have many indirect methods used to prove fraud. If the issue is underreporting income, for example, the IRS agents may show there are unexplained increases in the taxpayer’s net worth. Anytime the IRS finds evidence of civil fraud, criminal fraud also will be considered. If the tax errors are significant and there are indications of fraud, the audit may become a criminal investigation and prosecution of the taxpayer. A taxpayer facing civil fraud allegations should consider hiring a criminal tax attorney. Critique Is It Clearly Written? The article clearly illustrates tax statutes and information regarding tax fraud in civil cases that CAPs should know about, but when the case, if possible, turns into a criminal investigation and then leads to prosecution, it doesn’t address tax statutes and information concerning tax fraud in a criminal case too much. Tax fraud occurs when there is intent to underpay tax. It’s a willful evasion. The tax code is complex. How can CAPs successfully navigate the tax code? This article offers a good interpretation for the tax statutes and
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