Reference no: EM132839769

Problem 1: Rhonda, a CPA and a member, has just signed an engagement letter with Beachboy Fashions, Inc. to provide monthly bookkeeping and compiled financial statements for the company beginning in the year 20X5. In addition, Rhonda will prepare the corporate tax returns for Beachboy Fashions, Inc. and the personal tax returns for its owner Brian Love. While reviewing the previous tax filings for Beachboy Fashions, Inc., Rhonda discovers that the corporate tax returns for the year 20X3 were never filed. Which of the following actions should Rhonda take with respect to these unfiled returns?

A) Rhonda is not required to do anything since she was not engaged to prepare the returns in question at the time they were to be filed.
B) Rhonda should advise the taxpayer regarding the delinquent returns and the potential consequences, and recommend the measures to be taken. Such advice and recommendation may be given orally.
C) Rhonda should advise the taxpayer regarding the delinquent returns and the potential consequences, and recommend the measures to be taken. Such advice and recommendation must be given in writing.
D) Rhonda is not required to do anything since preparing the prior return is not a part of her engagement with the company and she has not been asked by the company to prepare the prior tax re-turns that were not filed.