Question

An accountant friend of yours tells you that he “almost never” does any tax research because he believes that “research usually reveals that some tax planning idea has already been thought up and shot down.” Besides, he points out, most tax returns are never audited by the IRS. Can a tax adviser who is dedicated to reducing his client’s tax liability justify the effort to engage in tax research? Do professional ethics demand such efforts? Which approach would a client probably prefer?

Answer 1

Yes, a tax adviser who is dedicated to reducing his client's tax liability should engage in tax research. As the question says, the adviser thinks research usually reveals some tax planning ideas, here is the catch its tax planning idea not a tax evasion idea. And sharing the knowledge which is not been shared yet is the main objective of conducting a research in the first place, so that the society can make benefit out of it. Research will also foster his thinking and by this he can think of new ways of planning tax. Research will expand knowledge and understanding of a chosen field. If everybody thinks like the adviser then how will research take place? If he is truly dedicated towards his work he should share the new knowledge, the new methods of tax planning so that society can use them. Professionals are mean to help clients and tax research by a tax adviser is the great move in the direction of serving the clients and ultimately the society.

As I talked earlier professional provides services just to make the life easy for his clients. In the tax adviser aspect, tax adviser give advice of managing the client's money in a good way and save tax by planning it. So if you take a broader perspective the research is also helping the adviser to achieve his ethical goals by helping clients, yes they can be formal clients, present clients or maybe the future clients. However there is no compulsion for tax adviser to conduct any research. It is just a matter of will.