Tax practitioners today face confluence of regulators & regulations

“There are four bureaucracies seeking to regulate the profession,” popular tax instructor E. Lynn Nichols, CPA told a packed house at OSCPA’s 2009 Mega Tax Conference. “And tax practitioners today face a confluence of regulation.”

CPAs’ with a tax practice face regulations from:

• AICPA: Statements on Standards for Tax Services
• Treasury Department: Circular 230
• Congress and IRS: IRC Sec. 6694, 6707A, and 7216
• Federal Trade Commission: Red flags rules

“What’s happening now is if you have a problem with the AICPA, you have a problem with the IRS,” Nichols said. “If you have a problem with the Treasury, you also have a problem with the AICPA.”

The main theme of Nichols’ keynote address is simple: “It’s not the old way of practicing.”

“You have an ethical responsibility that if the client gives you something vague and discernable, you have the responsibility to ask the questions,” Nichols stressed. “Before you sign the tax return, you have the responsibility to understand it.”

Nichols also reminded the nearly 300 attendees of many other developing issues surrounding tax practice today, including IRC 7216, the 2010 e-filing requirement and the FTC red flags rules.

“If the red flags rule should apply to anyone, it should apply to us,” Nichols explained. “It requires a service provider who is paid after a service is rendered to have a written policy regarding what to do to protect client’s personal information and to notify clients of a security breach.”

The Federal Trade Commission (FTC) recently delayed enforcement of the red flags rule until June 1, 2010. The AICPA has filed a lawsuit in the U.S. District Court for the District of Columbia seeking an injunction barring the Federal Trade Commission from applying the “red flags rule” to CPAs. 

OSCPA’s Mega Tax Conference, now in its third year, has continued to grow annually and has been met with an overwhelmingly positive response from members. Michael Quilter, an agent with the New York Life Insurance Company, said this is his first Mega Tax and it is so much more than just a good refresher before tax season, as some of the new rules that Nichols addressed are “really concerning.”

Agreeing with Quilter, Kathy E. Snide, a controller in Lancaster, said that the “Nichols’ ‘Federal Tax Update’ was especially beneficial – I learned so much in just that one session.”

Many of the sessions from the 2009 Mega Tax Conference will be available as part of OSCPA’s Online Library. Through Jan. 4, 2010, Online Library CPE credits are just $20 per hour – that’s a savings of 32-42%.

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