The American Institute of CPAs has written a letter to the Internal Revenue Service and the Treasury Department asking for changes in proposed regulations for tax practitioners.
The letter, sent November 29 to IRS acting commissioner Steven T. Miller, IRS chief counsel William J. Wilkins and Treasury Assistant Secretary of Tax Policy Mark Mazur, suggests clarifications in the proposed requirements under Circular 230.
“With respect to written tax advice, we suggest adding a requirement that the practitioner consider and apply the relevant authorities,” wrote AICPA Tax Executive Committee chair Jeffrey A. Porter. “We also note that new provisions in Section 10.37(b) could be read to impose a new duty of inquiry on practitioners, and we recommend modifications to eliminate uncertainty. Finally, as a general matter, we ask that when the regulations are finalized, Treasury and the Service make the effective date clear—e.g., the rules will be effective on the date finalized, and any written advice issued on or after the effective date should conform to the final regulations.”
The letter also recommended that the revisions in the section on due diligence should more explicitly state that determining the reasonableness of the reliance on another practitioner be determined by the facts and circumstances.
The AICPA also made a number of recommendations regarding the proposed competency requirements and other regulations. The Institute said it strongly supported the addition of an obligation of competence in the proposed regulations. However, it suggested that practitioners should be able to fulfill the obligation of competence by research and study during the course of the representation or by consulting with other practitioners who have the relevant expertise.
2 Comments
I wanted to add a comment so bad after reading shortstuff's . And he makes so much sense.Let me say this, yes we know that acconting and taxes are related, the difference I think is that taxes are based heavily on rules and regultions and acconting is based on established financial principles. I guess because Attorneys are used to rules and regulations that makes them experts. To me though anybody that practices taxes for the public should be made to go through the same standard of studies and competency no exceptions.
Posted by: lawman1@northstate.net | December 11, 2012 6:56 PM
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I personally think the IRS licensing and competency should go further. Even EA's (that's me), CPA's, Attorneys should have to prove competency in specific areas of tax practice. People who do not have an accounting background, for example should be required to prove they understand accounting principles before they undertake to do tax returns for business entities.
I have seen many force balanced financials on returns prepared by others that I have had to amend because these people went and prepared anything their license allowed whether or not they should have. (I do have an accounting degree) I actually had a new client audited on the prior period return just because the Balance Sheet was so off. (A huge debit balance in liabilities. OMG) I personally won't touch fiduciary type returns because that's not an area I had a lot of experience in before opening my own practice. Unfortunately not all of us show restraint in curtailing our activities to that which we know and the public needs to be protected.
We have a duty to the client to only prepare those returns in areas we have a more than passing expertise in. If you want to do more, study more. But there should be testing.
Posted by: ShortStuff | December 11, 2012 11:39 AM
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