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...

Starting in October, the IRS will send warning letters to tax return preparers who appear not to be complying with Earned Income Tax Credit (EITC) due diligence requirements.Section 6695(g) of the Internal Revenue Code...
BKD LLP adds Illinois accounting firm Wolf & Co.Springfield, Missouri-based CPA and advisory firm BKD LLP and Chicago-based accounting firm Wolf & Co. have agreed to merge, the firms announced on Monday. Wolf will...
A new government report on Monday found that the IRS may not be completing the required research steps in collecting delinquent taxes before considering the cases “not collectible.”The Treasury Inspector General...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.