New AICPA Tax Standards
New Statements on Standards for Tax Services (SSTS) take effect January 2024. The new standards include not only revisions but additional new compliance rules in the most significant update to the standards in over a decade.
The most significant change was the reorganization of the standards by the type of work performed. The prior SSTS No. 1 addressing tax positions has been further broken down into advising on verses providing actual tax compliance with specific provisions falling under each. The main point of the separation was to set the standards more clearly for those preparing tax returns as opposed to consulting on specific tax positions.
The term tax position is also more clearly defined as part of the revisions. Members should also take note that while the standards are widely written to set the stage as a code of conduct in compliance and advisory services, the standards apply to how a firm may market a certain tax position as well. For example, if a firm is developing marketing materials related to services the firm provides, the standards apply to any statements with respect to tax position in those materials as well.
Due diligence and advocacy standards have also been revised to point members towards applicable resources for defining both terms which have historically not been clearly defined in the standards themselves. Changes have also been made to the standards on penalties and the members’ requirement to discuss potential penalties with a client ahead of time. Preparers should carefully review this section to understand liability in these circumstances and requirements for penalty communications. In practice, it’s recommended to set a firm standard to document these communications for proof of compliance.
It is highly recommended that members review the full revisions of the standards which can be found on the AICPA website to understanding and compliance with changes.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and providing strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.