Question

"Interpreting Tax Research and Tax Representation Guidelines"

• Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers. Suggest measures the AICPA could take to ensure that CPAs are compliant with either set of standards. Defend your position.

Answer 1

Compare the American Institute of CPAs’ (AICPA) Statements on Tax Standards (SSTS) and the Treasury Department Circular 230 rules to practice before the Internal Revenue Service (IRS). Suggest which document creates better guidance in the preparation of tax returns and written advice provided to taxpayers.

The Statements on Tax Standards is a guideline for the American Institute of CPAs’ as below:

• This supports CPA’s to explain and encourage obedience responsibilities presented by the Internal Revenue Service and Treasury department.
• The circular 230 of Treasury is to support the authority in preparation of the tax documents.

In my understanding the SSTS provides a better idea in preparation documents for tax filling as it is more clear and concise. It provides better explanation of many circumstances. While Treasury Department Circular 230 was not clear in providing detailed knowledge of many tax related issues.