Using VTPR for self-assessment.

• Author: Werner, Bernard
• Position: Voluntary Tax Practice Review

Last year, the AICPA Tax Division published its Guidelines for Voluntary Tax Practice Review (VTPR). The document outlines the procedures to be followed in voluntarily analyzing the effectiveness of a firm's tax practice procedures--both administratively and technically.

While it is probable that the most useful reviews are those conducted by an outside (a firm, an association or a tax practitioner experienced in maintaining a quality tax practice), the guidelines have also been prepared to accommodate self-reviews. However, because of the voluntary nature of this program, the Tax Division has purpoosely avoided any requirement for reporting the results of these reviews (whether self-assessed or firm-on-firm) to a central body, not has it provided any means for compiling information on the quantity or quality of reviews performed pursuant to the guidelines. Therefore, the ratio of the use of self-assessed to outside reviews is unknown.

The self-assessment process lends itself more readily to an administrative review, although a technical review should not be ruled out. A local practitioner should be able to gain considerable insight into the strengths and weaknesses of how its tax practice is being administered by simply following the instructions set forth in the guidelines. Planning for such a review soon after the April 15 deadline could produce valuable information for next year's tax season (and probably for the remaining deadlines and extended due dates for the balance of the current year).

The first step in the self-assessment process is the completion of the guidelines' "Questionnaire on Tax Practice Control Policies and Procedures." The questionnaire covers the nine basic elements of tax practice quality control...