RULES OF PROFESSIONAL CONDUCT FOR MEMBERS IN TAX PRACTICE*

Our members should be ever mindful of the important role they play in the shaping of a salutary public attitude towards voluntary compliance with the revenue laws.

 

In order to promote and maintain a high standard of ethics in tax practice, the Indiana Society of Accountants has adopted the following rules governing members' activities in tax practice.

 

INTRODUCTION

 

The purpose of special rules for members in tax practice is to set forth what is, in effect, a threefold responsibility of our members.

 

We are all bound by our rules of professional conduct, as adopted by the Board of Governors, and these rules should be observed in our tax practice. There are certain situations in tax practice, however, which do not occur in the regular conduct of our practice, and these rules are intended to cover those special situations.

 

Our first responsibility is to our clients, in that the member should make every effort to protect the interest of the client, and at the same time advise him if he is apparently taking the wrong course of conduct. The client should also be made fully aware that the responsibility for any decisions made when the tax return is prepared is his, and that when he signs a tax return it has the force of an affidavit on his part.

 

The second responsibility is to the member himself. He should govern himself in his tax practice so that he will not have to jeopardize his professional reputation or lose his self-respect. This should not be carried to the extent that he is unreasonable in requiring proof of statement made by the taxpayer.

The third responsibility is to the government. In this respect a member should always bear in mind that he should be governed by the laws, regulations, and decisions which make up the field of tax practice.

RULES

 

RULE NO. 1

An unenrolled member must seek to fully protect the taxpayer's interests, and in appropriate cases refer the tax client to persons admitted to practice before the internal Revenue Service or before the U.S. Tax Court.

 

RULE NO. 2

A member is not considered to be expressing an opinion on the representation in any financial statements required as a part of a tax return prepared and signed by himself, or a member or employee of his firm.

 

RULE NO. 3

The responsibility of a member to review advice previously given, and tax returns previously prepared and filed, depends upon the nature of the contract between him and his client.

 

RULE NO. 4

A member shall have an understanding with his client, as to whether his responsibility ends with the preparation of a tax return, or other service based upon current law, or whether he is expected to inform the client of subsequent developments of the law which may materially affect the tax return as prepared, or the advice given.

 

RULE NO. 5

In situations where the applicable law is unsettled, or where the application of the law to the facts at hand is uncertain, the member has a duty to explain the probable effects of the various alternatives to the taxpayer who must make the final decision as to the position to be taken.

RULE NO. 6

A member must not permit his client to report incorrectly any item having a bearing on the client's tax liability on the return or other tax related document. Should a client of a member insist on treating incorrectly an item affecting his tax liability when there is no reasonable basis in law or in fact for such treatment of the item, the member should withdraw from the engagement and refuse to prepare the return or other document associated with the proposed impropriety.

 

RULE NO. 7

A member is under a duty to resolve all doubts in favor of his client when there is a reasonable basis in law and fact for the position taken, and the client is advised of the alternatives and the probable effects thereof.

 

RULE NO. 8

If the client will not provide sufficient information to properly calculate the tax due, then the member should withdraw from the assignment.

 

RULE NO. 9

A member is under a duty to comply with all rules and regulations of the Treasury Department governing practice before the Internal Revenue Service.

 

RULE NO. 10

A member should be considerate and respectful in dealing with representatives of the Internal Revenue Service.

 

RULE NO. 11

A member should avoid the appearance of an unduly close relationship with representatives of the Internal Revenue Service.

 

RULE NO. 12

A member should not aid or abet by any means unauthorized practice by others.

 

RULE NO. 13

A member has no obligation to communicate with Internal Revenue Service with respect to a person whom he suspects has been grossly negligent or who may have committed fraud against the government.

 

 

*Adopted from The National Society of Public Accountants