California CPA March/April 2023 | Page 18

AICPA ’ s New SSTSs

only can provide specific methods and tools for transmission and encourage their use . It ’ s also noted that the requirements of this standard provide broad rather than specific guidance and are not more onerous than the requirements of the IRS of preparers of tax returns when annually renewing their identification numbers ( PTIN ).

Reliance on Tools : Statement No . 1.4 The Reliance on Tools standard acknowledges that the CPA can and does utilize a variety of tools ( for example , technical resources , varieties of software , cloud storage ); it imposes on the CPA a requirement to comply with applicable laws pertaining to their use and to use professional judgment in the use or application of tools as well as to provide reasonable care in ensuring the quality of the tools . The recommendation regarding this standard was minimal and limited to suggesting that an example be removed and addressed as a Frequently Asked Question .

Compliance Services : Statement No . 2 Besides recommending that the STTSs retain recognition that the IRC provisions for tax positions are different for taxpayers and tax preparers , it was suggested that some terms used in the SSTSs be defined by reference to the AICPA Code of Professional Conduct .

It was also recommended that several examples be removed from the SSTSs and addressed in the form of FAQs because , generally , examples are not rules and should not be confused as such .

Tax Representation Services : Statement No . 4 It was recommended that the AICPA Standard of Competency govern the competency requirement described in the standard rather than that proposed reference to the Circular 230 definition . The two definitions are substantially similar and the standard refers to a requirement to comply with the rules of the tax authority before whom the CPA is appearing . The standard is that of the AICPA and , consequently , it ’ s definition of competence , would appear more appropriate .

Comments on Quality Control In conjunction with the exposure of the SSTS proposals , comments were requested concerning the role the AICPA should take regarding quality management in tax practice and the way the AICPA should address quality control within the scope of the standards .

The problem with applying quality control in tax practice is that the size , scope and nature of CPA practices are breathtakingly diverse . Consequently , it was recommended that any quality management standard be aspirational in nature and constructed in a manner that addressed the diverse nature and scope of CPA practices , and that quality management might best be addressed as an interpretation of the general SSTS standards , or in the form of FAQs or other similar guidance .

Conclusion The proposed updated , revised and expanded SSTSs are designed to address the evolving current practices and ethical issues impacting the CPA profession and its members in tax practice . As such , they should be viewed as a welcome addition to guidance in this area of a CPA ’ s tax practice .