The American Institute of CPAs is rolling out some changes in its tax standards that will take effect in January.
In August of the last year, the AICPA released a set of proposed revisions to the Statements on Standards for Tax Services and asked for public comments. The AICPA’s Tax Executive Committee reviewed and adopted the updates in May and now the updated standards will take effect on Jan. 1, 2024.
They include three new standards. A new data protection standard requires members to adopt reasonable safeguards to protect taxpayer data, both in electronic format and otherwise. Another new standard deals with reliance on technology tools, defining when AICPA members can reasonably rely on tools of all types used in the performance of tax services. A third standard, on representation of clients before taxing authorities, updates an older standard that mostly focused on compliance services. Since that time, tax practices have expanded into services such as tax representation, so now there’s a separate standard for tax representation services.
The revised tax standards include a new structure to organize them according to the type of work that’s being done. The AICPA has now updated its existing Interpretations and FAQs to reflect the reorganization of the revised tax standards, along with updated citations.
At the time when the original standards were drafted, most tax services being provided were compliance-oriented and involved tax return preparation. The revision project reorganized the Statements on Standards for Tax Services so most of the existing standards have been incorporated into either general standards (SSTS No. 1) or compliance standards (SSTS No. 2). Because the new SSTSs pertaining to data protection and reliance on tools apply to various types of tax services, they were included with the general standards. The existing standard related to tax advisory services (SSTS No. 3) and the new standard related to representation services (SSTS No. 4) were deemed to be unique and have been separately stated.
The new structure aims to help members apply standards to specific tax practice situations and understand the scope and expectations behind the standards.
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