Question

Martina advises her tax client, Breslin Baked Goods, to disclose a matter by attaching a special form to its corporate tax return. Breslin refuses and threatens to replace Martina with another CPA. Which statement best describes what Martina should do under the tax profession's ethics standards in this situation? Consider whether to withdraw from the engagement and reevaluate the relationship. Terminate the engagement and report Breslin to the IRS Office of Professional Responsibility. Draft a memo for the files indicating that Breslin is a difficult client File the return in the manner specified by the client (without the disclosure).

Answer 1

Answer: Martina should draft a memo for the files indicating that Breslin is a difficult client.

Explanation: The tax professional ethics standard states that one has to be under the rules and regulations that abides the profession, most especially the AICPA (American Institute of Certified Public Accountants). This means that for one to be ethical, the person's practice must be professional and in accordance to rules.

Because Martina has to be ethical, and also secure her client, she has to disclose the matter the way her clients wants it, but she also has to indicate that Breslin is a difficult person, so that her disclosure won't appear unprofessional, and for her license to be secured.

It will be unprofessional if Martina cannot handle a difficult clients. It is also unprofessional if Martina option becomes quiting or being sacked for not delivering a job.