Tax Executive Committee Exposes Proposed Statements on Standards for Tax Services

On April 18, 2000, the AICPA Tax Executive Committee exposed drafts of proposed Statements on Standards for Tax Services (SSTSs) and an interpretation of statement No. 1. The exposure process is a necessary step in adopting enforceable standards in the tax area.

Between 1964 and 1977, the Tax Executive Committee issued the Statements on Responsibilities in Tax Practice (SRTPs), which are advisory and educational in nature. The SRTPs established a body of advisory opinions providing guidelines for CPAs in tax practice.

These guidelines, as set forth in the SRTPs, have come to play a much more important role than most members realize. The courts, IRS, state accountancy boards and other professional organizations recognize and rely on the SRTPs as the appropriate articulation of professional conduct in a CPA's tax practice. In effect, the SRTPs, in and of themselves, have become de facto enforceable standards of professional practice as tax practitioners are regularly held accountable for failure to follow them, through state disciplinary organizations and malpractice cases when their professional practice conduct fails to meet the prescribed guidelines of conduct defined in the Statements.

The AICPA Tax Executive Committee believes the Institute can best serve the public and our tax professional members by adopting enforceable standards of conduct for tax practice. The AICPA Board of Directors has agreed and, with Board support, AICPA Council set the stage for enforceable tax standards by designating the Tax Executive Committee as a standard-setting body in October 1999. Such designation authorizes the Tax Executive Committee to adopt these statements as enforceable standards after a 90-day exposure period.

Practice standards are the hallmark of calling one's self a professional. Members should fulfill their responsibilities as professionals by instituting and maintaining standards against which their professional performance can be measured. The promulgation of practice standards also reinforces one of the core values of the AICPA Vision—that CPAs conduct themselves with honesty and integrity. Moreover, such a move is fully consistent with the AICPA Mission Statement that the AICPA "is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients."

Compliance with professional standards of tax practice reinforces the public's perception of the professionalism associated with CPAs, as well as the AICPA. In effect, allowing the AICPA to mandate that its members comply with standards of professional tax practice not only enhances the CPA's image as a tax professional committed to the highest quality of service, but also sends a forceful, positive statement to the general public and regulatory bodies that the AICPA and its members are serious about maintaining the highest level of professionalism in tax practice.

Any individual or organization may obtain one copy of the exposure draft without charge until the end of the comment period by writing to the AICPA Order Depart-ment, Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881. This document is also available on AICPA Online at http://www.aicpa.org. We hope you will carefully read the exposure draft and send us your comments. Responses should be sent in time to be received by July 18, 2000 and addressed to Edward S. Karl, Director—Taxation, AICPA, File SSTS, 1455 Pennsylvania Avenue, NW, Washington, DC 20004. Responses may also be sent via the Internet to ekarl@aicpa.org. Because we would like to issue the final SSTSs in a timely manner, we encourage respondents to submit their comments by the deadline. It may not be possible to fully consider comments received after that date.

Written comments on the exposure drafts will become part of the public record of the AICPA and will be available for public inspection at the AICPA library after July 18, 2000, for one year.

The Tax Executive Committee will consider comments received and vote to finalize the exposure draft at a meeting in New York on July 31, 2000. If approved, the SSTSs will be published in the October issue of the Journal of Accountancy and will become binding on members on Oct. 31, 2000.