Long & Long, CPAs have been the auditors of Top Manufacturing. Co. for many years. Top is a publicly held company whose financial statements are filed with the SEC. Joseph Carlton, president and CEO of Sunshine Bank, is a member of Top's board of directors; this is his only connection with Top. Carlton has asked Long & Long to prepare his and his spouse's income tax returns. Mae Smith, CFO of Top, has also asked Long & Long to prepare her income tax returns.

Under the PCAOB rules, which of the following is true?

1. Long & Long preparing the income tax returns for Carlton will not cause them to lose their independence with Top, but preparing the income tax returns for Mae Smith would cause Long & Long to lose their independence with Top.
2. Long & Long, CPAs preparing income tax returns for Joseph Carlton and for Mae Smith would not cause Long & Long, CPAS to lose their independence with Top Manufacturing. Co.
3. If Long & Long, CPAs prepares the income tax returns for Joseph Carlton, they will not be independent of Top Manufacturing. Co. Similarly, preparing the income tax returns for Mae Smith would cause Long & Long, CPAs to be not independent of Top Manufacturing. Co.
4. If Long & Long, CPAs prepares the income tax returns for Joseph Carlton, they will not be independent of Top Manufacturing. Co. However, preparing the income tax returns for Mae Smith would not cause Long & Long, CPAs to lose their independence with Top Manufacturing. Co.