Question

• 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 by citing current cases.

Answer 1

Step-by-step Explanation

The statement of AICPA on the standards for tax services (SSTSs) are being enforceable tax practice standards for the members of AICPA. It actually applies to each and every member with regard of their jurisdictions of practices or services they offer. SSTS guidelines which helps CPAs in order to promote governance as well as compliance responsibilities which are presented by treasury and IRS.

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Circular 230 is a federal tax practice which is the standard. Circular 230 which covers authority of both attorney or CPA to represent & make preparation of tax documents to IRS.

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SSTS is very much clearly stated. As it is being prepared in a concise manner, it actually helps in the better preparation of the tax returns. It actually vividly states as well as breaks down sections or any of the tax contents which gives situational solutions. Further, Circular 230 is stated without much depth to just jot down summary rather than to understand main content.

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Measures which ensures that CPAs are compliant with both set of standards as follows:-

a) CPAs shall develop the basic framework in order to know about what set of sections actually apply to them & comply with such laws as possible.

b) Awareness of good standards of practice could increase compliance aspect.

c) As compliance to such standards and increase CPA designations, members require to be cautious as well devoted to apply such set of standards.