Oregon Tax Consultants Practice Exam

If one Licensed Tax Consultant is employed by another, who is responsible for keeping the records?

1. The employing LTC

2. The employee LTC

3. Both consultants equally

4. The IRS

The correct answer is: The employing LTC

The responsibility for keeping records in a situation where one Licensed Tax Consultant (LTC) is employed by another falls on the employing LTC. This is tied to the overarching responsibility of the employer in maintaining compliance with tax regulations and ensuring that the staff is properly trained and equipped to manage client records. The employing LTC is ultimately accountable for the work performed under their supervision, which includes the documentation and records of client transactions and tax filings. This responsibility extends to establishing systems for record-keeping that comply with both state and federal requirements, making the employing LTC the correct answer. In this context, the employee LTC, although also involved in record-keeping tasks, typically operates under the guidance and direction of the employing LTC. Therefore, while the employee may handle day-to-day record maintenance, the overarching responsibility lies with the employer. The other choices, including both consultants being equally responsible or involving the IRS, do not accurately reflect the hierarchical responsibility typically recognized in tax consultation and compliance practices.