Statements on Standards for Tax Services
Under a 1999 resolution of AICPA Council, the Tax Executive Committee was authorized to promulgate professional practice standards with respect to tax services. These enforceable SSTSs apply to all tax services, and are designed to:
- Identify and develop appropriate standards in providing tax services and promote their uniform application by CPAs.
- Increase the understanding of CPA responsibilities by Treasury and IRS officials and encourage the development of similar standards for their personnel.
- Foster increased public compliance with and confidence in our tax system through awareness of good standards of tax practice.
- Enhance the CPA professional designation.
The SSTSs were originally issued in 2000 and were updated in 2009. The full text of the current SSTSs are available below, along with additional guidance and answers to common questions.
Tax Standards and Interpretations
- SSTSs (full document): Includes all seven SSTSs, along with the history and ongoing process.
- SSTS No. 1, Tax Return Positions: 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.
- SSTS No. 2, Answers to Questions on Returns: Sets forth the applicable standards for members when signing the preparer's declaration on a tax return if one or more questions on the return have not been answered.
- SSTS No. 3, Certain Procedural Aspects of Preparing Returns: 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 tax return.
- SSTS No. 4, Use of Estimates: Sets forth the applicable standards for members when using estimates in the preparation of a tax return.
- SSTS No. 5, Departure From a Position Previously Concluded in an Administrative Proceeding or Court Decision: 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.
- SSTS No. 6, Knowledge of Error: Return Preparation and Administrative Proceedings: Sets forth the applicable standards for members 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.
- SSTS No. 7, Form and Content of Advice to Taxpayers: 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.
- Notice to Readers: Read to ensure you understand the history and context of how to apply the interpretations.
- Preface: Provides descriptions of reporting standards and other background guidance.
- Interpretation No. 1-1, Reporting and Disclosure Standards, of SSTS No. 1: 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.
- Interpretation No. 1.2, Tax Planning, of SSTS No. 1: Clarifies existing standards, recognizing the compelling need for a comprehensive interpretation of a member's responsibilities in connection with tax planning.
Frequently Asked Questions
- SSTS No. 1, Tax Return Positions – Adequate Disclosure, Filing Returns, and Reasonable Basis
- SSTS No. 2, Answers to Questions on Returns – Reasonable Effort and Omitting Answers to Questions
- SSTS No. 3, Certain Procedural Aspects of Preparing Returns – Pass-Through Basis
- SSTS No. 4, Use of Estimates – Casualty Losses of Real and Personal Property
- SSTS No. 4, Use of Estimates – Earnings and Profits
- SSTS No. 4, Use of Estimates – Home Office
- SSTS No. 6, Knowledge of Error: Return Preparation and Administrative Proceedings – Errors on Return
- SSTS No. 7, Form and Content of Advice to Taxpayers – Communication and Documentation