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Feedback sought for revised Statements on Standards for Tax Services

October 27, 2022  |  Linda Wedul, CAE

Feedback sought for revised Statements on Standards for Tax Services You have received an invitation. An invitation makes you feel important — that your presence matters to the invitee.

An Invitation to Comment (ITC) may not evoke that same feeling, but your thoughts and insights do matter and influence final decisions that ripple throughout the accounting profession.

The AICPA’s Tax Executive Committee (TEC) recently issued an Exposure Draft (ED) and an ITC on revised Statements on Standards for Tax Services (SSTS). Comments must be submitted by Dec. 31, 2022.

How we got here

A little background on SSTSs. They started as guidance under a different name in 1964. Over time, the courts, IRS and state boards of accountancy began recognizing and relying on the statements, and they became de facto enforceable standards. By 2000, the standards were expanded beyond federal tax.

SSTSs are specifically called out in Minnesota Board of Accountancy rules as authoritative literature that licensed CPAs must follow. Tax preparers who are not CPAs are not required to follow the SSTSs.

In 2018, a taskforce was formed to reorganize and update the SSTSs. Three new standards are published in an exposure draft released by this taskforce. The new standards include:
  • Data protection.
  • Reliance on tools.
  • Representation of tax clients before taxing authorities.
Part No. 2 of the revised SSTSs is an ITC on how to address quality within the tax preparation functions of a CPA firm.

An ITC is issued when more research and investigation is needed before issuing a proposed standard. This is an optimal time to provide feedback. There is flexibility to amend the draft and more opportunity for different points of view to shape the final proposal.   

Feedback is important

Quality management is important. We would be hard pressed to find any member or CPA who would disagree with this statement. The CPA profession is built on a foundation of trust and a commitment to high standards, and you can’t have that without a commitment to quality.

Questions to consider include:
  1. What regulations and standards from all stakeholders are currently in place that assess quality and include enforcement?
  2. What are the quality issues to be solved with a quality management standard?
  3. What challenges are unique to smaller firms that must be considered?

Join us for a discussion

The MNCPA is holding two virtual sessions on Nov. 9: One is for sole practitioners and one for firms with two to five partners to discuss the ITC.

Firms are encouraged to attend these sessions, learn about the proposed changes and provide comments on the proposal. This is especially important for smaller firms who have a large majority of their business providing tax services to individuals and small businesses. Your comments will influence the final decision.

Need additional references?

  • Revised Statements on Standards for Tax Services: ED and ITC.
  • How to submit comments.
  • Deadline to comment: Dec. 31, 2022.
    • All comments will be made public after the deadline (email addresses are not made public).
    • Responses may be submitted in the body of the email, as a Word document or PDF.
    • Your name and firm should be included.

Topics: Taxation-Individual, Accounting & Auditing, Taxation-Business, MNCPA Programs & Activities

Linda Wedul, CAE

Linda Wedul is president and CEO of the MNCPA. She’s usually spotted at MNCPA events, introducing herself to members with a warm smile and memorable laugh. Mixed among the Footnotes, accounting journals, leadership books and three monitors in her office, you’d be surprised to see a dog kennel. Her unpaid job is volunteering as a foster family for service dogs in training through Can-Do-Canines. She and her husband have two adult children and live in Farmington. Linda can be reached at 952-885-5516 or lwedul@mncpa.org.

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