James, a CPA, has a new client who recently moved to town. Harold prepares the clients current tax return which shows a net 1231 gain. James calls the client to request copies of the returns for the preceding five years to determine if there any 1231 look back losses. The client says that the returns are "still buried in the moving mess somewhere" and cannot be found. The client also says that he does not remember any 1231 net loss is on the prior year returns.

a. James can ignore complex tax provisions in this case since it probably will not make any difference in the ultimate tax results.

true or false?

b. James does not know for sure whether proper versus improper compliance makes a difference, unless the proper compliance is worked out.

true or false?