Campus to clients: opportunities for incorporating international tax law into all levels of the tax curriculum.

• Author: Nellen, Annette

INTERNATIONAL TAX IS NO LONGER A SUBJECT area that is reserved for the highest level of tax curriculum, nor is it just for partners, managers, and tax directors to deal with. Considering the global nature of today's businesses, covering international topics is necessary at all levels of the business curriculum, and, yes, even in tax. As public accounting staff and entry-level accountants find themselves immersed in global business issues from the start of their careers, the tax curriculum needs to prepare these students for the business situations they will face in the workforce.

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According to the U.S. Department of Commerce's International Trade Administration, more than a quarter-million U.S. companies were engaged in exports in 2009, up 29% from 1997 (see U.S. Trade Overview, available at tinyurl.com/7c5fwba). Additionally, just looking at the manufacturing sector, both imports and exports increased by 20% from 2009 to 2010. In 2009, small and medium-size companies made up over 97% of all importers and exporters (see U.S. Census Bureau, "A Profile of U.S. Importing and Exporting Companies, 2008-2009," available at tinyurl.com/6tvdbr7). It is likely that even the smallest of clients or companies for which students may end up working will have an international aspect to their business.

The growth in global business has, of course, not gone unnoticed by the AICPA. The Model Tax Curriculum (available at tinyurl.com/772eaxk), which the AICPA published in August 2007, identifies the international and global perspective as important to economic decision-making and tax research skills. Although the AICPA advocates covering international topics within the broader business competencies, it indicates that international tax topics should be covered beginning at the introductory tax level, which would then be enhanced through an advanced tax curriculum.

The AICPA Examinations team has also included an international curriculum in Content and Skill Specifications for the Uniform CPA Examination, effective Jan. 1, 2011 (available at tinyurl.com/6qjcexf). Although the international topic coverage resides in the Business Environment and Concepts (BEG) section of the exam and does not address tax specifically, the emphasis on global business environments is a strong indication of its importance across all subject areas of a business curriculum.

The Tax Curriculum

The typical undergraduate accounting program offers two tax courses. In most cases, the introductory tax course is required, and the second course is an elective. Of course, there may be variations, as some colleges and universities do not require a tax class as part of the accounting curriculum, and some require two courses. Regardless, there are generally two approaches to an undergraduate tax curriculum: an individual taxpayer approach or a business entities approach.

The individual approach to tax generally focuses the entire first course on the individual as the taxpaying entity. Although general topics such as what is taxable income and what is a deduction will be covered, they are generally applied in an individual taxpayer context. That leaves the second course to cover business entities. Alternatively, the anecdotally more popular entities approach to the undergraduate tax curriculum introduces the student to various taxpaying entities in the first course. The general concepts of income and deductions are learned and applied to individuals as well as corporations and flowthrough entities. The second course in the sequence addresses each of these entities as well but introduces more...