Chapter 1

An individual who has passed the ... exam and has been licensed by their state board of accountancy. In addition to specific educational requirements, licensing often requires specific work experience under the supervision of a .... Maintaining a ... license typically requires 40 hours annually of continuing education.

A person who is qualified to practice before the IRS by means other than becoming an attorney or certified public accountant. Typically, a person must pass a qualifying examination and meet other requirements to become an ... ....

An element of modern tax practice in which a practitioner works with a client to file appropriate tax returns in a timely manner and represents the client in administrative proceedings.

The legal structuring of one's financial affairs so as to optimize the related tax liability.

The reduction of one's tax liability by illegal means.

A tax research issue is ... when not all pertinent transactions have been completed by the taxpayer or other parties, such that the researcher can suggest to the client several alternative courses of action that generate differing tax consequences.

A tax research situation is ... when all pertinent transactions have been completed by the taxpayer and other parties, such that the research issues may be limited to the proper nature and amount of disclosure to the government on the tax return or other document, and to preparation activities relative to subsequent government review.

An element of modern tax practice in which a practitioner represents the client against the government in a judicial hearing.

An examination of pertinent sources of the state, local, and federal tax law in light of all relevant circumstances relative to a client's tax problem. Entails the use of professional judgment to draw appropraite conclusions and the communication of such conclusions or alternatives at a proper level to the client.

A tax regulation detailing the requirements and responsibilities of those who prepare federal tax returns for compensation. Includes educational, ethical, and procedural guidelines.

The professional organization for practicing attorneys in the United States.

The professional organization of practicing certified public accountants (CPAs) in the United States.

Boundaries of social or professional behavior derived by the culture or its institutions. Tax ethics are described in various documents of governmental agencies or professional organizations.

The privilege to sign tax returns as preparer for compensation and to represent others before the IRS or in court in an audit or appeal proceeding. This privilege is granted by the IRS and controlled under Circular 230.

A voluntary program administrered by the IRS in which noncredentialed tax return preparers complete continuing education training and receive a certification from the IRS.

A requirement for individuals who receive compensation for preparing or assisting with the preparation of all or substantially all of a tax return or claim for refund.

The care a reasonable person should take in preparing or assisting in the preparation, approval, and filing of tax returns, documents, and other papers relating to IRS matters.

The practice under which a professional bases their fee for services on the results obtained. The American Institute of Certified Public Accountants has held that the performance of services for a ... ... may be unethical; one exception is available, though, in situations (as in tax practice) in which the results are subject to third-party actions (here the government, in an audit setting). Several states are relaxing this restriction, allowing certified public accountants to mix the form of their compensation between fixed and ... ....

A fee for tax work that is not in accordance with what is just or reasonable; the charging of ... ...s is prohibited.

Originally adopted in 1988, it provides a comprehensive code of ethical and professional conduct applicable to members of the ....

The American Institute of Certified Public Accountants requires that the certified public accountant (CPA) who renders an opinion relative to a client's financial statements be (and to appear to be) ... from the client. This principle entails restrictions as to the CPA's direct and indirect financial dealings with the client and the CPA's simultaneous role as financial auditor.

A ...-... ... (such as that required to meet the realistic possibility standard of SSTS No. 1) is a belief that is based on reasonable interpretations of the tax law.

Under the AICPA's SSTS No. 1, a member should have a good-faith belief that a tax return position has at least a ... ... of being sustained administratively or judicially on its merits if challenged. ... ... is considered to be a one-in-three chance of success. This standard applies if the applicable taxing authority has no written standards with respect to recommending a tax return position or preparing or signing a tax return, or if its standards are lower than the standards set forth in the SSTS.

The doctrine that allows taxpayers to use estimates to claim a tax deduction when they can show there is some factual foundation on which to base a reasonable approximation of the expense.

Adopted by the American Bar Association in 1983, the rules are intended as a guide for attorneys' professional conduct. The ... ... deal with issues such as confidentiality and conflicts of interest in the client-lawyer relationship, responsibilities to nonclients, and so on.

Activities of modern tax practice that nonattorneys are forbidden from engaging in, entailing, for example, the issuance of a legal opinion or the drafting of a legal document for the client. Legal or professional penalties may be imposed for the ... ... ... ....