Statements of Position



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Statements on Standards for Tax Services (SSTSs) Nos. 1 through 8 and Interpretation 1-1 to Statement No. 1, “Realistic Possibility Standard,” reflect the AICPA’s standards of tax practice and delineate members’ responsibilities to taxpayers, the public, the government, and the profession. The Statements are intended to be part of an ongoing process that may require changes to and interpretations of current SSTSs in recognition of the accelerating rate of change in tax laws and the continued importance of tax practice to members. A significant area of many members’ tax practices involves assisting taxpayers in tax planning. An area of recurring controversy has been the increase in transactions that are potentially abusive tax shelters. Taxing authorities, courts, the AICPA, and other professional organizations have struggled with defining and regulating these transactions. Crucial in the debate about the appropriate means of addressing tax shelters has been the recognition that it may be difficult to clearly delineate the scope of transactions that are considered tax shelters in a way that will discourage abuse. At the same time, it must be recognized that taxpayers have a legitimate interest in arranging their affairs so as to pay no more than their fair share of taxes, and that tax professionals, including members, have a role to play in advancing these efforts. In addition to the difficulty in defining the term tax shelter, it was determined that there was a compelling need for a comprehensive interpretation of a member’s responsibilities in connection with tax planning, with the recognition that such guidance would clarify how those standards would apply across the spectrum of tax planning, including those situations involving tax shelters, regardless of how that term is defined. The Interpretation, therefore, includes Illustrations that cover a broad range of practice situations. Please be advised that the SSTSs, and this Interpretation, have been written in as simple and objective a manner as possible. However, by their nature, ethical standards provide for an appropriate range of behavior that recognizes the need for interpretations to meet a broad range of personal and professional situations. The SSTSs recognize this need by, in some sections, providing relatively subjective rules and by leaving certain terms undefined. These terms and concepts are generally rooted in tax concepts, and therefore should be readily understood by tax practitioners. It is, therefore, recognized that the enforcement of these rules, as part of the AICPA’s Code of Professional Conduct Rule 201, General Standards, and Rule 202, Compliance With Standards, will be undertaken with flexibility in mind and handled on a case-by-case basis. Members are expected to comply with them.

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Tax planning -- Standards -- United States; Tax accounting -- Standards -- United States; Tax consultants -- Professional ethics -- United States


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed tax standards interpretation : Proposed interpretation 1-2,



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