1.2 AICPA standards for tax services

Question 1

Statements on Standards for Tax Services

Answer 1

The AICPA has issued seven Statements on Standards for Tax Services (SSTSs) which are enforceable under the AICPA’s Code of Professional Conduct

Question 2

Tax Return Positions

Answer 2

Position should have substantial authority, properly disclosed and have a reasonable basis

Question 3

Answers to Questions on Returns

Answer 3

A member should make reasonable effort to obtain appropriate answers. A taxpayer is not required to explain on the return the omission of an answer when reasonable grounds exists for the omission

Question 4

Certain Procedural Aspects of Preparing Returns

Answer 4

Good faith, rely w/o verification.

Inquiries about support documents

Question 5

Use of Estimates

Answer 5

Use taxpayer’s estimates when impractical to obtain exact data

Question 6

Departure from Position Previously Concluded in an Administrative Proceeding or Court Decision

Answer 6

The treatment of an item determined in a court decision does not restrict a recommendation of a different tax treatment in later years

Question 7

Knowledge of Error: Return Preparation and Administrative Proceedings

Answer 7

A member should advise the taxpayer, not obligated to inform taxing authority, only significant items apply

Question 8

Form and Content of Advice to Clients

Answer 8

Advice reflects professional competence, not obligated to communicate any subsequent developments with taxpayer, tax advice may be oral or written (important, unusual should be written)