Ivan von Hindenberg, CPA and a member of the AICPA, has been preparing federal tax returns for one of his clients for many years. Two years ago, he took a position on a return and that position was settled in an appeals conference. He is now considering a different position on the current return. According to the AICPA's Statements on Standards for Tax Services, which of the following statements is correct for this situation?
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a. | Ivan cannot take a different position on the current return because the IRS is bound to be consistent in their positions and so is he. | |
b. | If the determination on the prior return was caused by lack of or insufficiency of supporting data, Ivan can take a different position on the current return if he has better supporting data for the new return. | |
c. | Ivan can take a different position if he files Form 1040 NP within two years of the date of the previous return or the date the tax was paid, whichever is earlier. | |
d. | Ivan cannot take a different position on the current return under any circumstances. He is bound by the earlier determination. |
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