Statements on Standards for Tax Services Nos. 1–4
Preface
Tax Standards and the AICPA Code of Professional Conduct
Standards are the foundation of a profession. The AICPA aids its members in fulfilling their ethical responsibilities by instituting and maintaining standards against which their professional performance can be measured. Compliance with tax practice professional standards also reaffirms the public’s awareness of the professionalism that is associated with CPAs as well as the AICPA.
All members of the AICPA are subject to the AICPA Code of Professional Conduct, in addition to the rules imposed by their licensing jurisdictions. This publication sets forth enforceable tax practice standards for members of the AICPA, known as the Statements on Standards for Tax Services (SSTSs). These statements apply to all members providing tax services, regardless of the jurisdictions in which they practice. Interpretations of these statements may be issued as guidance to assist in understanding and applying the statements. Any such interpretations have the same authority as defined in “Interpretations and Other Guidance” (ET sec. 0.100.020) in the AICPA Code of Professional Conduct.
The SSTSs and their interpretations are intended to complement other tax practice standards promulgated by federal, state, and local taxing authorities or foreign taxing authorities. Services may also be subject to other AICPA professional standards.
The SSTSs are written as simply and objectively as possible. However, by their nature, practice standards provide for an appropriate range of behavior and need to be interpreted to address a broad range of personal and professional situations. The SSTSs recognize this need by, in some sections, providing relatively subjective rules and leaving certain terms undefined. These terms are generally rooted in tax concepts and therefore should be readily understood by tax practitioners. Accordingly, enforcement of the SSTSs falls under the “General Standards Rule” (ET sec. 1.300.001 and 2.300.001), and the “Compliance With Standards Rule” (ET secs. 1.310.001 and 2.310.001) of the AICPA Code of Professional Conduct and will be undertaken on a case-by-case basis. Members are expected to comply with these standards.
Ongoing Process
The following SSTSs and any interpretations issued thereunder reflect the AICPA’s standards of tax practice and define members’ responsibilities to taxpayers, the public, the government, and the profession. The SSTSs are intended to be part of an ongoing process of articulating tax practice standards for members. These standards are subject to change as necessary or appropriate to address changes in the tax law or other developments in the tax practice environment.
To accommodate the complexity and rapid change inherent in the tax practice environment, the AICPA issues supplementary guidance to the SSTSs and interpretations in various forms, such as frequently asked questions (FAQs) and practice guides. Such documents are not rules, regulations, or official guidance of the Tax Executive Committee (TEC) issued pursuant to its rule-making authority and therefore are not authoritative guidance.
Members are encouraged to assess the adequacy of their practices and procedures for providing tax services in conformity with the SSTSs. This process will vary according to the size of the practice and the nature of tax services performed.
The TEC promulgates the SSTSs and their interpretations. Acknowledgment is also due to the many members who have devoted their time and efforts over the years to developing and revising the AICPA’s standards.
Form of Standards
Each SSTS is divided into sections that address a variety of aspects related to tax services. Although some statements have several sections that address different aspects of tax services, the sections should be applied as essential elements of the entire statement generally related to all tax services.
For ease of analysis, each section contains an Introduction and an Explanations section.
In addition to the AICPA, applicable tax authorities may impose specific reporting and disclosure standards regarding advising on tax return positions or preparing or signing tax returns. These standards can vary between taxing authorities and by type of tax.
Definitions
All terms herein are as defined in the AICPA Code of Professional Conduct, except as noted:
taxpayer. A taxpayer is a client, a member’s employer, or any other third-party recipient of tax services.
tax position. A tax position is (i) a position reflected on a tax return on which a member has specifically advised a taxpayer or (ii) a position about which a member has knowledge of all material facts and, on the basis of those facts, has concluded whether the position is appropriate.
member. Consistent with “Definitions” (ET sec. 0.100) in the AICPA Code of Professional Conduct; unless otherwise noted, the SSTSs apply to all members providing tax services.