While preparing Margarets 20X4 tax return John discovers an

While preparing Margaret\'s 20X4 tax return. John discovers an error on her 20X3 tax return, which Margaret prepared herself, in which Margaret\'s adjust gross income was understated by $ 10,000, roughly ten percent of her Adjusted Gross Income (AGI). What is John\'s responsibility concerning the error?

Solution

AGI not only decide about tax payment only. It tells about credit worthiness of customer so if AGI is under stated it may happen that Margarate will not get enough credit as he requires. besides this AGI is also related with medical expense, tax-deffered retirement account, social status (marriad, single) etc. So for these reasons Margaret may concern.