Tax advisor

A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in complicated financial situations themselves or to learn the details of tax law from a professional advisor.

United States

In the United States, tax preparers are regulated but not licensed by the Internal Revenue Service of the United States Department of the Treasury. There are penalties for failure to disclose the identity of the preparer on the return, for the failure to give the taxpayer a copy of the return, and for negligence in preparing the return.

Practice before the Internal Revenue Service is regulated by "Treasury Department Circular No. 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service" [Codified in regulations at 31 C.F.R. subtitle A, part 10.] . Most practice is limited to attorneys, Certified Public Accountants (CPAs), Enrolled Agents, and Enrolled Actuaries. Rendering tax advice is also regulated by Circular 230.

Failure to uphold these standards can result in disciplinary action ranging from reprimand to permanent disbarrment from practice.

DUTY OF TAX ADVISORS

Circular 230, Reg 10.33(a): Best practices. Tax advisors should provide clients with the highest quality representation concerning Federal tax issues by adhering to best practices in providing advice and in preparing or assisting in the preparation of a submission to the Internal Revenue Service. In addition to compliance with the standards of practice provided elsewhere in this part, best practices include the following:

(1)Communicating clearly with the client regarding the terms of the engagement. For example, the advisor should determine the client's expected purpose for and use of the advice and should have a clear understanding with the client regarding the form and scope of the advice or assistance to be rendered.

(2)Establishing the facts, determining which facts are relevant, evaluating the reasonableness of any assumptions or representations, relating the applicable law (including potentially applicable judicial doctrines) to the relevant facts, and arriving at a conclusion supported by the law and the facts.

(3) Advising the client regarding the import of the conclusions reached, including, for example, whether a taxpayer may avoid accuracy- related penalties under the Internal Revenue Code if a taxpayer acts in reliance on the advice.

(4)Acting fairly and with integrity in practice before the Internal Revenue Service.

Notes

See also

*Certified Public Accountant
*Taxation in Germany
*Worshipful Company of Tax Advisers

External links

* [http://www.aicpa.org AICPA] American Institute of Certified Public Accountants

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