AICPA Issues Interpretation of Statement on Tax Services

The American Institute of Certified Public Accountants has issued an exposure draft of a proposed interpretation of Statement on Standards for Tax Services (SSTS) No. 1, "Tax Return Positions," specifically emphasizing the tax accountant's role in the area of tax planning.

The SSTS statements are part of an ongoing process by the AICPA to set out enforceable standards that govern the conduct of AICPA members and explain the responsibilities that tax practitioners have to taxpayers, the public, government, and the profession as a whole. The interpretation just issued is a response to recent controversies over potentially abusive tax shelters.

Placing an emphasis on ethical standards, the proposed interpretation sets out specific recommendations for the tax practitioner that provide direction in the area of tax planning. Included in the steps that a practitioner should follow are recommendations to establish background facts, consider reasonableness of assumptions and representations, apply pertinent authorities to relevant facts, consider the existence of a business purpose or economic substance for the transaction, and arrive at a conclusion supported by authorities.

Much of the interpretation document is made up of illustrations of case studies with recommendations for how to resolve dilemmas. Such resolutions typically require the practitioner to make sure taxpayers are informed of risks, inform the taxpayer of disclosure requirements, and consider circumstances when it would not be appropriate for the practitioner to sign the tax return.

The AICPA is soliciting comments on the proposed interpretation prior to publication. Comments are due by April 30, 2003, and may be submitted by e-mail to ekarl@aicpa.org or by mail to:

Edward S. Karl
Tax Division, AICPA
1455 Pennsylvania Avenue, NW
File 1-2
Washington, DC 20004-1081

You may like these other stories...

Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...
IRS chief: New rule on the way for tax-exempt groupsIRS Commissioner John Koskinen told the USA Today on Monday that the agency will likely rewrite a proposed rule regulating the political activities of nonprofit groups to...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.