Statements on Standards for Tax Services

    Statements on Standards for Tax Services 

    The AICPA’s Statements on Standards for Tax Services (SSTSs) are enforceable tax practice standards for members of the AICPA. The SSTSs apply to all members regardless of the jurisdictions in which they practice and the types of taxes with respect to which they are providing services.  The SSTSs and interpretations delineate members' responsibilities to taxpayers, the public, the government and the profession. They are intended to be part of an ongoing process of articulating standards of tax practice for members.  

    Current SSTSs Current Interpretations

    History and Past SSTSs and Interpretations

    SSTSs- Effective January 1, 2010 (Full Document)

    SSTS No. 1     SSTS No. 2
    SSTS No. 3     SSTS No. 4
    SSTS No. 5     SSTS No. 6
    SSTS No. 7

    SSTS Interpretation No. 1-1 and Interpretation No. 1-2, "Tax Planning" - effective January 31, 2012 (Full Document)

    SSTS Interpretation No. 1-1

    SSTS Interpretation No. 1-2

    History

    SSTSs (2000-2009)

    SSTS Interpretation No. 1-1 (2000)

    SSTS Interpretation No. 1-2 (2003)

    Frequently Asked Questions

     

     

    Topics

    Statements on Standards for Tax Services - Effective January 1, 2010 (Full Document)

    This document includes all seven of the statements on standards for tax services along with the history and ongoing process.

    SSTS No. 1, Tax Return Positions

    This statement sets forth the applicable standards for members when recommending tax return positions, or preparing or signing tax returns filed with any taxing authority. 

    This statement also addresses a member's obligation to advise a taxpayer of relevant tax return disclosure responsibilities and potential penalties. 

    Tax return position is defined as (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 materials facts and, on the basis of those facts, has concluded whether the position is appropriate. 

    SSTS No. 2, Answers to Questions on Returns

    This statement sets forth the applicable standards for members when signing the preparers declaration on a tax return if one or more questions on the return have not been answered.  The term "questions" includes requests for information on the return, in the instructions, or in the regulations, whether or not stated in the form of a question.

    A member should make a reasonable effort to obtain the information necessary to provide appropriate answers to all questions on a tax return before signing as preparer.  Not all questions are of equal importance but, questions may be useful in determining taxable income.  Answers may require additional disclosure and a member often must sign a preparer's declaration stating that the return is true, correct, and complete.

    SSTS No. 3, Certain Procedural Aspects of Preparing Returns

    This statement sets forth the applicable standards for members concerning the obligation to examine or verify certain supporting data or to consider information related to another taxpayer when preparing a taxpayer's tax return.

    A member may rely on information provided by the client or rd parties.  The member should confirm that substantiation documentation exists, where required.  A member should also consider information actually known, even if from another related taxpayer.

    SSTS No. 4, Use of Estimates

    This statement sets forth the applicable standards for members when using the taxpayer's estimates in the preparation of a tax return, but the taxpayer has the responsibility to provide the estimated data.  Appraisals or valuations are not considered estimates for purposes of this statement.

    A member may use estimates to prepare a tax return if it is not practical to obtain exact data and if the member determines that the estimates are reasonably based on the facts and circumstances known.  When using estimates the member should not present numbers to imply a greater accuracy than actually exists.

       
       
      SSTS No. 5, Departure From a Position Previously Concluded in an Administrative Proceeding or Court Decision

    This statement sets forth the applicable standards for members in recommending a tax return position that departs from the position determined in an administrative proceeding or in a court decision with respect to the taxpayer's prior return.

    If an administrative proceeding or court decision has resulted in a determination concerning a specific tax treatment of an item in a prior year's return,  a member will usually recommend the same tax treatment in subsequent years.  Although this is common, it is not required to recommend the same tax treatment so long as SSTS No. 1, Tax Return Positions, is satisfied with respect to the new position.

       
       
      SSTS No. 6, Knowledge of Error:  Return Preparation and Administrative Proceedings

    This statement sets forth the applicable standards for member who becomes aware of (a) an error in a taxpayer's previously filed tax return; (b) an error in a return that is the subject of an administrative proceeding; or (c) a taxpayer's failure to file a required tax return. 

    When a member is aware of an error in a previously filed return, the member should promptly inform the client.  The member should advise the client of the potential consequences of the error and recommend the corrective measures to be taken.  A member is not allowed to inform the taxing authority without the taxpayer's permission, except when required by law.  If the client declines to take corrective measures recommended, the member should consider withdrawing from the engagement or continuing the client relationship.

       
       
      SSTS No. 7, Form and Content of Advice to Taxpayers

    This statement sets forth the applicable standards for members concerning certain aspects of providing advice to a taxpayer and considers the circumstances in which a member has a responsibility to communicate with a taxpayer when subsequent developments affect advice previously provided.  The statement does not however, cover a member's responsibilities when the expectation is that the advice rendered is likely to be relied on by parties other than the taxpayer.

    A member should ensure that tax advice provided to a taxpayer reflects competence and appropriately serves the taxpayer's needs.  The member should use professional judgment about any need to document oral advice and should assume their advice will affect the manner in which the matters or transactions considered would be reported or disclosed.  The member is under no obligation to communicate with the taxpayer when subsequent developments affect advice previously provided, unless by specific agreement.

       
       
      SSTS Interpretation No. 1-1

    This interpretation provides that a member should not recommend a tax return position or take a position on a tax return that the member prepares unless that position satisfies applicable reporting and disclosure standards.  The tax laws of various taxing jurisdictions contain similar limitations on the ability to recommend or take certain tax return positions. 

       
       
      SSTS Interpretation No. 1-2

    This interpretation has its origins in the AICPA's desire to provide adequate guidance to its members with respect to providing services in connection with tax planning.  Its goal is to clarify existing standards, recognizing the compelling need for a comprehensive interpretation of a member's responsibilities in connection with tax planning.  This guidance is intended to clarify how those standards would apply across the spectrum of tax planning.
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