A CPA firm performs the annual audit of Wilson Group, a private company. Wilson asks the firm to determine

whether the company would qualify for certain municipal tax credits and prepare the application. The firm will

receive $15\%$ of any tax credits that Wilson obtains as a result of the requested credits; if the request is denied,

no fees will be due. Wilson expects city officials to perform a substantive review of its application. Which

statement best describes why this fee arrangement would be a permissible contingent fee arrangement under

the AICPA Code of Professional Conduct?

The firm expects the city to perform a substantive review of Wilson's application.

The contingent fee of $15\%$ is a relatively small portion of the potential tax credit.

The firm does not expect the contingent fee to be material on any level.

The contingent fee relates to tax services.