Brenda Sells sent the tax return that she prepared for the president of Purple Industries, Inc., Harry Kohn, to Vincent Dim, the manager of the tax department at her accounting firm. Dim asked Sells to come to his office at 9 a.m. on Friday, April 12, 2016. Sells was not sure why Dim wanted to speak to her. The only reason she could come up with was the tax return for Kohn. “Brenda, come in,” Vincent said. “Thank you, Vincent,” Brenda responded. “Do you know why I asked to see you?” “I’m not sure. Does it have something to do with the tax return for Mr. Kohn?” asked Brenda. “That’s right,” answered Vincent. “Is there a problem?” Brenda asked. “I just spoke with Kohn. I told him that you want to report his winnings from the lottery. He was incensed.” “Why?” Brenda asked. “You and I both know that the tax law is quite clear on this matter. When a taxpayer wins money by playing the lottery, then that amount must be reported as revenue. The taxpayer can offset lottery gains with lottery losses, if those are supportable. Of course, the losses cannot be higher than the amount of the gains. In the case of Mr. Kohn, the losses exceed the gains, so there is no net tax effect. I don’t see the problem.” “You’re missing the basic point that the deduction for losses is only available if you itemize deductions,” Vincent said. “Kohn is not doing that. He’s using the standard deduction.” Brenda realized she had blown it by not knowing that. Brenda didn’t know what to say. Vincent seemed to be telling her the lottery amounts shouldn’t be reported. But that was against the law. She asked, “Are you telling me to forget about the lottery amounts on Mr. Kohn’s tax return?” “I want you to go back to your office and think carefully about the situation. Consider that this is a one-time request and we value our staff members who are willing to be flexible in such situations. And, I'll tell you, other staff in the same situation have been loyal to the firm. Let’s meet again in my office tomorrow at 9 a.m.” Brenda complies and the return is audited and found to have under-reported income.

Who is likely to take the blame for the error? Who is the most important stakeholder in a tax return preparation?

Vincent Dim is rationalizing his behavior with which GVV construct?

Who is the most important stakeholder in a tax return preparation?