Is that payment a gift or compensation for services? Is the expenditure a deductible repair or a capital improvement? Is the income ordinary income or capital gain? How sure do you have to be before you advise a client on issues such as these? Can you rely on what the client tells you or do you have to audit the client’s information?
When can you, as the practitioner, get caught up in the client’s wrongdoing? Responsible tax practitioners must know how to approach these questions. This panel provided an update on the ethical, civil penalty and criminal standards governing practitioners who give tax advice and how those standards apply in everyday practice.