AICPA Recommendations to Congress on Tax Preparer Standards

Source: Journal of Accountancy

In our last issue, we reported on new Congressional legislation on standards for tax return preparers (Accounting Today). The new law requires, in the case of an undisclosed position, a “reasonable belief that the treatment of the position be more likely than not the proper treatment.” The prior standard provided penalties only if there was no realistic possibility of having an undisclosed position sustained. See the article at www.cpaleadership.com/members/1089.cfm.

The AICPA recommends that tax return preparer standards be the same as taxpayer standards. Tax shelter matters should be held to the “more likely than not” standard, but for non-tax-shelter matters (non-tax avoidance), the taxpayer standard (“substantial authority”) should be used.

From Journal of Accountancy, September 2007, p. 25. For the complete article, click here.