Den Co. owes J, CPAs $25K for previously rendered tax and consulting services. The fees have been outstanding for more than one year and are significant to J. Den asked J to perform this year's audit but is unable to pay the fees prior to release of the audit report.

Which statement best describes whether J is independent under the Unpaid Fees interpretation?

1. J may be independent if J determines that threats to independence are not significant.
2. J may be independent if J can apply safeguards that reduce threats to an acceptable level.
3. J is independent because the previous services did not include audit or attest services.
4. J is not independent because threats to J's independence are not at an acceptable level.