Question

The CPA-auditor is required to be INDEPENDENT (even though the accounting firm is paid by the corporation). In contrast, the CPA-tax accountant (or attorney) is an ADVOCATE of the client (not a spokesperson for the IRS). Please discuss the legal, ethical, and pragmatic distinctions between these two conflicting positions. Support your comments using Circular 230 and the AICPA Code of Professional Conduct.

Answer 1

A Certified Public Accountant (CPA) is an accounting professional who has passed the Uniform CPA examination and has also met additional state certification and experience requirements.

Where as Tax attorneys are lawyers who specialize in the complex and technical field of tax law. They're best for handling complex, technical and legal issues associated with your tax situation. A tax attorney can step in after you have a problem, but consulting with one in advance can also help you avoid problems

While both certified public accountants (CPAs) and tax attorneys can provide you with tax support, a CPA is limited on the scope of the advice they can provide.Both certified public accountants, known as CPAs, and tax attorneys are available to individuals and organizations attempting to navigate the often confusing universe of taxes. Members of both professions work on a variety of tax-related issues, and their expertise can overlap in certain areas. However, CPAs and tax attorneys also specialize in areas that are unique to their field.

In the context of business the CPAs and tax attornies can both help with tax planning to minimize the amount of taxes. But however the CPAs are comparitively low cost than attornies for doing tax return preparation

There will be differences in the following areas

1.Tax Strategies , Preparation and management

2.Tax defense

3. Education

4. Other areas of interest

5. Salary and remuneration

1.Both CPAs and tax attorneys provide tax planning support, helping individuals and organizations make financial decisions with an eye on the possible tax benefits or penalties that those moves would create in the future.

In this context, tax attorneys offer more specialization in the legal questions of tax planning, while CPAs have more expertise on the financial implications.

Tax planning encompasses such areas as trusts, estate planning, investments, business and personal expenses, payroll, business structure and self-employment. Tax attorneys typically do not prepare tax returns, though they might provide legal advice on how to fill out specific aspects of a return. CPAs do prepare tax returns and can file them directly with the Internal Revenue Service.

2. Tax attorneys are educated to handle legal challenges and can represent clients in the court system, whether the clients are bringing a case against the IRS or the IRS is investigating them for possible tax crimes

A CPA can help to strengthen a legal case, especially if he or she helped to prepare the tax returns in question. A tax attorney provides the advantage of attorney-client privilege

3.Tax attorneys must earn a law degree and then pass the state bar association exam in the state where they plan to practice. Some choose to pursue in their specialty, such as a master of laws degree in taxation or a CPA license.

States maintain their own requirements for taking the CPA exam, but most of them require a minimum of 150 college credits, which is about five years of study. Some states also require a minimum amount of work experience in the field, or they will allow an applicant to use work experience as a substitute for the education requirement. Finally, someone seeking a CPA license must pass the Uniform CPA examination.

4. Tax attornies focus only on tax law where as CPAs concentrate mostly on the topics of accounting, auditing and other company related matters as they are very well aware of it.

5. Based on the cost to company hiring a CPA is more profiatble and cost effective to the company rather than hiring a tax attorney who charges in high range.

These are some of the differences which I came across