Handling last-minute changes for clients: it is who we are ... it is what we do....

• Author: Michnay, Ruth Ann

Form 3115, Application for Change in Accounting Method, likely provided the most headaches for practitioners this tax season. Now that the rush of tax season is over, it is time for a postmortem on this critical issue.

This column addresses the concerns of small CPA firms dealing with a business client base with assets of less than $10 million and the final regulations on tangible property or the "repair regulations." Most small firms deal with businesses that have annual revenue under $5 million--the "mom and pop" shops striving for $1 million of gross receipts.

This tax season was frustrating for small CPA firms. The firms were following the rules from the IRS, and then the IRS changed the game in mid-February.

The small CPA firm took the rules and implemented them. Why? It is who we are. CPA firms, large and small, have a responsibility to clients, the IRS, and the profession.

Small business owners (hair dressers, auto shops, laundry businesses, rental properties, etc.) look to CPAs as their trusted advisers. These businesses cannot afford in-house accounting and tax departments. They look to CPAs to help them interpret and follow the laws.

The IRS requires CPAs to follow the rules and standards of Circular 230, Regulations Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10).The AICPA requires its members to follow additional standards. These include the AICPA Code of Professional Conduct and the AICPA Statements on Standards for Tax Services.

According to the principles of professional conduct in ET Section 0.300.010, CPAs "express the profession's recognition of its responsibilities to the public, to clients, and to colleagues. They guide members in the performance of their professional responsibilities and express the basic tenets of ethical and professional conduct."

The AICPA code also embodies the following principles:

* Responsibilities (ETSection 0.300.020): Members "have responsibilities to all those who use their professional services."

* Public interest (ETSection 0.300.030): Members "should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate a commitment to professionalism."

* Integrity (ET Section 0.300.040): Members "should perform all professional responsibilities with the highest sense of integrity.... Integrity is measured in terms of what is right and just."

* Due Care (ETSection 0.300.060): Members "should observe the professions...