Our accounting firm has won the engagement to be the new federal income tax consultant for a fortune 500 company. In the course of preparing the federal income tax returns for its tax year ending December 31, 2017, we reviewed the company's federal income tax returns for recent years. Our review discovered a large error in the company's computation of its domestic production activities deduction. The error is the result of misunderstanding the law, and was repeated on all of the recent returns. We have discussed the matter briefly and informally with the client, who has indicated that they would rather not file amended returns correcting the error. The client has also indicated that it would like a written analysis of the issue, including the chances of the issue being found by the IRS on audit and of the client prevailing on the matter if it winds up in court. To prepare for the next meeting with the client on this matter, we need to determine:

Under the IRS rules applicable to tax practitioners, what are our ethical obligations to the client and to the IRS with regard to these mistakes, the analysis requested by the client and our advice to the client?

Under the AICPA's standards, what are our ethical obligations to the client and to the IRS with regard to these mistakes, the analysis requested by the client and our advice to the client?

Please answer each question in complete sentences, and cite the authority where you found each answer. Use your own words in the answer do not copy the IRS or AICPA's language. Spelling and grammar count.