Choice "B" is correct. The CPA should consider withdrawing from the preparation of Vee's Year 6 income tax return until the error (i.e., the non-filing of the Year 2 tax return) has been corrected.Rule: Upon discovery of an error in a previously filed return or the client's failure to file a required return, the CPA should promptly notify the client (either orally or in writing) of the error, noncompliance, or omission and advise the client of the appropriate measures to be taken (e.g., advise the client to file the tax return). If the client does not rectify the error, the CPA should consider withdrawing from the engagement.Choice "d" is incorrect, as the CPA has no responsibility (without a formal client engagement) or the authority to prepare and file a client's tax return.
Choice "c" is incorrect, as a CPA cannot advise a client to disobey the law because it violates a CPA's ethical responsibilities.
Choice "a" is incorrect, as a CPA has no responsibility to advise the IRS of any client wrongdoing.