Based on the case of Betty claiming a cat as a dependent there are two possible scenarios that a CPA might be involved in.
Scenario one: Betty has been claiming her cat as a dependent and failed to clarify to the CPA that the dependent claimed on her taxes is a cat, not a human.
In this scenario Betty is committing tax evasion because she is knowingly breaking the law to avoid paying taxes on all her taxable income by claiming her cat as a dependent.
If a tax preparer is not provided with truthful information by the taxpayer they can unintentionally help a person to commit fraud. According to the AICPA’s Statements on Standards for Tax Services (SSTSs), SST No. 3, a tax preparer may rely without verification on information that a taxpayer
Scenario one: Betty has been claiming her cat as a dependent and failed to clarify to the CPA that the dependent claimed on her taxes is a cat, not a human.
In this scenario Betty is committing tax evasion because she is knowingly breaking the law to avoid paying taxes on all her taxable income by claiming her cat as a dependent.
If a tax preparer is not provided with truthful information by the taxpayer they can unintentionally help a person to commit fraud. According to the AICPA’s Statements on Standards for Tax Services (SSTSs), SST No. 3, a tax preparer may rely without verification on information that a taxpayer