SSTS No. 1, Tax Return Positions – Adequate Disclosure, Filing Returns, and Reasonable Basis FAQs

June 20, 2014


The answers to these frequently asked questions (FAQs) are based on guidance developed by the SSTS Guidance Task Force in response to questions that were presented during the SSTS public exposure period and since that time in administering the SSTSs. These FAQs are not rules, regulations, or official statements of the Tax Executive Committee issued pursuant to its rule-making authority and, therefore are not authoritative guidance.

The SSTSs should be used in conjunction with these FAQs. The answers to these FAQs may not necessarily address the requirements of other regulatory bodies, including State Boards of Accountancy, the Internal Revenue Service, and other tax regulatory bodies whose rules may differ from those of the AICPA. A member should always consult these other sources to insure compliance with all appropriate regulatory requirements.


While the general standard for recommending a tax return position or preparing or signing a tax return under Statement 1, paragraph 5(a) is “realistic possibility of success,” Statement No. 1, paragraph 5(b) permits a member to recommend a tax return position if the member concludes that there is a “reasonable basis” for the position and the member advises the taxpayer to appropriately disclose that position.

Under Statement 1, paragraph 14, a member’s determination of whether information is appropriately disclosed by the taxpayer should be based on the facts and circumstances of the particular case and the disclosure requirements of the applicable taxing authority.

Please note that a “description of the various reporting standards” including “reasonable basis” is set forth in the Interpretations of SSTS No. 1.