SSS Problem 2-5 (Tax Preparer's Penalty) For each of the following independent Cases, indicate whether you believe a penalty would be assessed against the tax return preparer under ITA 163.2. Explain your conclusion. A. Accountant X is asked by Client A to prepare an income tax return including a business financial statement to be used in the return. In response to a request by Accountant X for business related documents, Client A supplies information to Accountant X, which includes a travel expense receipt. Accountant X relies on this information provided by Client A and prepares the business statement that is filed with the return. The CRA conducts a compliance audit and determines that Client A's travel expense was a non- deductible personal expense. Accountant X has several clients that have been reassessed in respect of a tax shelter. Accountant X knows that the CRA is challenging the income tax effects claimed in respect of the tax shelter that is based on a significant overvaluation of the related property, and is technically deficient in its structure. The Tax Court of Canada, in a test case (general procedures), denies deductions claimed in respect of the tax shelter in a previous year by Client B la client of Accountant x). Client B's appeal is dismissed. The case is not appealed, and Accountant X is aware of the court's decision. Accountant X prepares and files an income tax return on behalf of Client C that includes a claim in respect of the same tax shelter that the Tax Court denied deductions for. C. Taxpayer Z approaches Tax-preparer X to prepare and EFILE Z's income tax return. Taxpayer Z provides X with a 14 slip indicating that Z has $32,000 of employment income. Taxpayer Z advises X that he made a charitable donation of $24,000 but forgot the receipt at home. Z asks that X prepare and EFILE the tax return. In fact, Z never donated anything to a charity. X prepares Z's income tax return without obtaining the receipt