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Accounting and Auditing Research and Databases: Practitioner's Desk Reference by Thomas C. Pearson, Natalie Tatiana Churyk, Thomas R. Weirich

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Regulation of Tax Professionals

Tax professionals are regulated by professional standards and penalties for wrongdoing. Professional standards affecting tax practice include the registration requirement for tax return preparers, the AICPA Statements on Standards for Tax Services, and Circular 230.

Tax preparers must register annually with the IRS to acquire a Preparer Tax Identification Number. Certified public accountants (CPAs), attorneys, and enrolled agents who are active and in good standing with their licensing agency have no additional requirements. The same is true for supervised preparers and non-1040 preparers. All others must also pass a competency test and take continuing education courses annually.

The AICPA has a Code of Professional Conduct for CPAs. The AICPA Code provides an enforceable comprehensive code of conduct, a guide for AICPA members for complex questions, and assurance to the public. For tax practice, this is supplemented by AICPA Statements on Standards for Tax Services (SSTSs). The AICPA's website has these SSTSs with other materials on taxation. Topics addressed in the SSTSs as of 2012 are as follows:

  • Maintain a reasonable belief that client's tax return position has a realistic possibility of success on the merits (SSTS 1).
  • Make reasonable effort to obtain information to answer all questions on the tax returns (SSTS 2).
  • Rely on client information without verification unless the information appears incorrect, incomplete, or inconsistent. Preparers ...

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