Updating the Statements on Standards for Tax Services.

Author:Preusch, Nick

In 1964, the AICPA released the first of 10 Statements on Responsibilities in Tax Practice (SRTPs) that supplemented the AICPA Code of Professional Conduct then in effect by setting best practices for members who prepared tax returns. The SRTPs became de facto enforceable standards of professional practice for CPAs providing tax services and were the basis for the first Statements on Standards for Tax Services (SSTSs) issued in August 2000. Over time, the SSTSs have been revised to address tax law changes and clarify issues as requested by members. Two interpretations and several guidance documents issued in the form of FAQs have also been released to supplement the SSTSs.

Changes in tax practices, including changes in technology and law, have created a tax environment unrecognizable from even 10 years ago. To address these changes in the profession, the AICPA Tax Executive Committee (TEC) authorized the formation of a task force to review and update the SSTSs. Each existing standard is being carefully reviewed to ensure relevancy to current tax practice, while also modifying wording where clarification or simplification will enhance the existing standard. The task force has formed three subgroups to draft revised SSTSs. The draft SSTSs will be reviewed by the Tax Practice Responsibilities Committee and the Professional Ethics Executive Committee before they are submitted for approval to the TEC. Following approval, the new SSTSs will be sent to AICPA members for comment prior to adoption.

The following subjects, among others, are being evaluated for consideration as a new standard by the task force. As the project remains in progress, the updated SSTSs may not reflect every topic discussed below.

Data security and privacy: The task force is developing a standard that establishes basic member responsibilities to protect client data without establishing specific requirements that could quickly become outdated. The task force is also reviewing current statutory and regulatory requirements to prevent inconsistencies and overlap between competing member requirements.

Tax quality control: The proposed standard on quality control would require members with a tax practice to establish quality-control procedures. These procedures would typically be laid out in a tax quality control document.

Taxpayer representation: This standard would set forth requirements and recommendations when representing a client before a taxing authority. These...

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