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Strengthening Tax Services' Foundation

AICPA's Statements on Standards for Tax Services (SSTSs) have been updated, clarified and streamlined in proposed revisions and is now available for study and comment by AICPA members. Comments are due by May 15.

May 2009
by Gerald Schreiber Jr. / Journal of Accountancy

The SSTSs are enforceable rules of conduct for AICPA members, in conjunction with the AICPA’s Code of Professional Conduct Rule 201, General Standards, and Rule 202, Compliance With Standards.

Why Were They Revised?

The current SSTSs, issued in 2000, closely mirror the earlier Statements on Responsibilities in Tax Practice (SRTPs), advisory opinions originally issued in the 1960s and 1970s. The SRTPs gradually became considered standards of professional practice, and in the late 1990s, the AICPA recognized a need to make them an official part of what were then known as the Professional Standards. At the time, the SSTSs introduced only minimal revisions to the SRTPs, because of the latter’s long use and, therefore, concerns over enforceability of new standards. Since then, however, further changes in federal and state tax laws and regulations and a need for clarification of a number of points prompted the Tax Executive Committee in 2004 to convene a task force that over the next four years produced the proposed revised SSTSs.

What Was Changed?

Some of the most notable revisions were to SSTS no. 1, Tax Return Positions, since it had been much affected by legal and regulatory amendments. Also, the proposed consolidation of SSTS no. 6 and SSTS no. 7 deserves careful review. A red-lined draft showing the current version with the proposed revisions is available on the Tax Division Web site. Here is a brief summary of new features:

SSTS no. 1, Tax Return Positions. Statement provides the AICPA standards members must satisfy to recommend a tax return position and to sign a tax return. For nondisclosed positions recommended by a member, this statement has been revised to clarify that the tax return reporting standard of the applicable taxing authority must be satisfied; if the taxing authority has no written standard or its written standard is lower than the realistic-possibility-of-success standard for non-disclosed positions, the realistic-possibility-of-success standard will apply. The revisions also note that for federal returns, members should consult the tax return preparer standard in IRC § 6694 or its successor.

This article has been excerpted from the Journal of Accountancy. View the full article here.