Chapter 2 Section 5: Tax Standards and Research Flashcards
What is the hierarchy of the main two authorities for tax law?
Internal Revenue Code
IRS Regulations
What are the 7 topics for the AICPA Statements on Standards for Tax Services?
- Tax return positions
- Answers to questions on returns
- Certain procedural aspects of preparing returns
- Use of estimates
- Departure from position previously concluded
- Knowledge of error
- Form and content of advice to taxpayers
Explain tax return positions rule
Recommend the position only if the preparer has a good faith belief that the position has a realistic possibility of being sustained.
Explain answers to questions on returns rule
Make a reasonable effort to answer all questions
Explain procedural aspects of preparation rule
No responsibility to verify information given by taxpayer
Explain the use of estimates rule
May use estimates provided by taxpayer and no need to disclose them
Explain the departure from previously concluded position rule
Consistency is not rquired
Explain the knowledge of an error rule
You have to tell the taxpayer, but it is up to them to decide what to do about it.
You cannot tell the IRS without their permission
Explain the form and content of advice rule
Do a good job
