The answers to these frequently asked questions (FAQs) are based on guidance developed by the Statements on Standards for Tax Services (SSTSs) Guidance Task Force in response to questions that were presented during the SSTS public exposure period and since that time in administering the SSTSs. These FAQs are not rules, regulations or official statements of the Tax Executive Committee issued pursuant to its rule-making authority and, therefore, are not authoritative guidance.
The SSTSs should be used in conjunction with these FAQs. The answers to these FAQs may not necessarily address the requirements of other regulatory bodies, including State Boards of Accountancy, the Internal Revenue Service and other tax regulatory bodies whose rules may differ from those of the AICPA. A member should always consult these other sources to ensure compliance with all appropriate regulatory requirements.
SSTS No. 2, paragraph 2, provides that a member should make a reasonable effort to obtain from the taxpayer the information necessary to provide appropriate answers to all questions on a tax return before signing as preparer. In general, what is the meaning of "a reasonable effort" for purposes of paragraph 2?
Reasonable effort would include the following:
Exercises due professional care and diligence
Obtains from the taxpayer sufficient relevant data to afford a reasonable basis for the member's conclusions and recommendations
Follows up if the taxpayer has not provided the requested information
What should be considered by a member in determining if a reasonable effort has been made to answer all questions on a return?
The member should review applicable technical and ethical standards including:
SSTSs and Interpretations
Circular 230, including §10.22, §10.33 and §10.34
IRC sections, including §6662, §6664, §6694 and §6700
Internal Revenue Regulations and Pronouncements
State standards and rules, if applicable
A member has completed preparation of a return and has omitted an answer to a question. May the member submit the return to the client for filing?
Yes, if the member made reasonable efforts to obtain the information needed to answer the question. Paragraph 3 of SSTS No. 2 provides guidance when a member should be satisfied that a reasonable effort has been made to provide appropriate answers to the questions on a return. Paragraph 4 of SSTS No. 2 indicates reasonable grounds may exist for omitting an answer to a question applicable to a taxpayer.
A member prepares a return omitting an answer after having determined that the question is not applicable to the taxpayer. May the member submit the return to the client for filing?
Yes, if the member made reasonable efforts to obtain information needed to answer the question. Paragraph 3 of SSTS No. 2 provides guidance when a member should be satisfied that a reasonable effort has been made to provide appropriate answers to the questions on a return.
The AICPA’s Statements on Standards for Tax Services (SSTSs) are enforceable tax practice standards for members of the AICPA. Additional guidance is also found in the corresponding interpretations and frequently asked questions (FAQs). Access to the complete set of SSTSs and guidance are available in the AICPA’s Statements on Standards for Tax Services Library.