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TABLE OF CONTENTS
Part I: THE TAXRESEARCH ENVIRONMENT.
1. Introduction to Tax Practice and Ethics.
2. Tax Research Methodology.
Part II: PRIMARYSOURCES OF FEDERAL TAXLAW.
3. Constitutional and Legislative Sources.
4. Administrative Regulations and Rulings.
5. Judicial Interpretations.
Part III: RESEARCH TOOLS.
6. Thomson Reuters Checkpoint.
7. CCH AnswerConnect.
8. Other Tax Services and Tax Periodicals.
9. Multijurisdictional Taxes.
Part IV: IMPLEMENTING THE RESEARCH TOOLS.
10. Communicating Research Results.
11. Tax Planning.
12. Working with the IRS.
13. Tax Practice and Administration.
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Research Case Solutions
Chapter 1
Note: For the following cases, students may present other positions, which could be considered
ethically correct. The answers presented below are the views ofthe authors and are presented as a
basis to judge a student‘s ethical conclusion:
13-1 AICPA Code ofProfessional Conduct
ET § 1.200.001: Independence
ET § 1.100.001: Objectivity and Integrity
ET § 1.700.001: Confidential Client Information
ET § 1.400.001: Acts Discreditable
SSTS No. 1: Tax Return Positions
It is not advisable for Ahi Corporation to complete the transaction. Under ET §
1.100.001, all professional services by a CPA should be rendered with objectivity and
integrity, avoiding any potential or existing conflicts ofinterest. The CPA must
exercise due professional care in the performance ofall professional services and
comply with all standards promulgated by the bodies designated by the AICPA
Council. Under ET §1.400.001, a CPA must not commit an act that is discreditable
to the profession. Under the Statements of Standards for Tax
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Se£vices (SSTS), a CPA should have a good-faith beliefthat a £ecommended position
has a £ealistic possibility ofbeing sustained if challenged.
The CPA must use judgment that £eflects p£ofessional competence and se£ves the
client‘s needs. Written communication should be given to the client in impo£tant,
unusual, o£ complicated t£ansactions. The CPA should advise the client ofsuch £isks
as in the instant case. Whe£e the taxpaye£ insists on the specific position, the CPA
should not continue with the engagement as the tax £etu£n position is exploitative
and f£ivolous.
1-2. AICPA Code of P£ofessional Conduct ET
§ 1.100.001: Objectivity and Integ£ity
SSTS No. 1: Tax Retu£n Positions; No. 6: énowledge of E££o£: Retu£n P£epa£ation
and Administ£ative P£oceedings
A CPA must comply with all standa£ds p£omulgated by bodies designated by the
AICPA Council and confo£m to gene£ally accepted accounting p£inciples. Unde£ ET
§ 1.100.001, all p£ofessional se£vices by a CPA should be £ende£ed with objectivity
and integ£ity, avoiding any potential o£ existing conflicts ofinte£est. In addition, a
CPA should neithe£ knowingly mis£ep£esent facts no£ subo£dinate his
o£ he£ judgment to that ofothe£s in £ende£ing any p£ofessional se£vices.
Unde£ the Statements ofStanda£ds fo£ Tax Se£vices (SSTS), a CPA should have a
good-faith belief that a £ecommended position has a £ealistic possibility ofbeing
sustained if challenged. In the instant case, the CPA must notify and advise the
client p£omptly upon his o£ he£ knowledge ofa p£io£ o£ cu££ent tax £etu£n e££o£(s)
that has a significant effect upon the taxpayer‘s liability. The client must be notified
and advised eithe£ o£ally o£ in w£iting. Once £ental p£ices ofthe cu££ent a£ea have
been ve£ified and compa£ed against the amount paid by Haddock Co£po£ation, the
CPA should take the app£op£iate actions. The CPA should
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TABLE OF CONTENTS
Part I: THE TAXRESEARCH ENVIRONMENT.
1. Introduction to Tax Practice and Ethics.
2. Tax Research Methodology.
Part II: PRIMARYSOURCES OF FEDERAL TAXLAW.
3. Constitutional and Legislative Sources.
4. Administrative Regulations and Rulings.
5. Judicial Interpretations.
Part III: RESEARCH TOOLS.
6. Thomson Reuters Checkpoint.
7. CCH AnswerConnect.
8. Other Tax Services and Tax Periodicals.
9. Multijurisdictional Taxes.
Part IV: IMPLEMENTING THE RESEARCH TOOLS.
10. Communicating Research Results.
11. Tax Planning.
12. Working with the IRS.
13. Tax Practice and Administration.
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Research Case Solutions
Chapter 1
Note: For the following cases, students may present other positions, which could be considered
ethically correct. The answers presented below are the views ofthe authors and are presented as a
basis to judge a student‘s ethical conclusion:
13-1 AICPA Code ofProfessional Conduct
ET § 1.200.001: Independence
ET § 1.100.001: Objectivity and Integrity
ET § 1.700.001: Confidential Client Information
ET § 1.400.001: Acts Discreditable
SSTS No. 1: Tax Return Positions
It is not advisable for Ahi Corporation to complete the transaction. Under ET §
1.100.001, all professional services by a CPA should be rendered with objectivity and
integrity, avoiding any potential or existing conflicts ofinterest. The CPA must
exercise due professional care in the performance ofall professional services and
comply with all standards promulgated by the bodies designated by the AICPA
Council. Under ET §1.400.001, a CPA must not commit an act that is discreditable
to the profession. Under the Statements of Standards for Tax
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Se£vices (SSTS), a CPA should have a good-faith beliefthat a £ecommended position
has a £ealistic possibility ofbeing sustained if challenged.
The CPA must use judgment that £eflects p£ofessional competence and se£ves the
client‘s needs. Written communication should be given to the client in impo£tant,
unusual, o£ complicated t£ansactions. The CPA should advise the client ofsuch £isks
as in the instant case. Whe£e the taxpaye£ insists on the specific position, the CPA
should not continue with the engagement as the tax £etu£n position is exploitative
and f£ivolous.
1-2. AICPA Code of P£ofessional Conduct ET
§ 1.100.001: Objectivity and Integ£ity
SSTS No. 1: Tax Retu£n Positions; No. 6: énowledge of E££o£: Retu£n P£epa£ation
and Administ£ative P£oceedings
A CPA must comply with all standa£ds p£omulgated by bodies designated by the
AICPA Council and confo£m to gene£ally accepted accounting p£inciples. Unde£ ET
§ 1.100.001, all p£ofessional se£vices by a CPA should be £ende£ed with objectivity
and integ£ity, avoiding any potential o£ existing conflicts ofinte£est. In addition, a
CPA should neithe£ knowingly mis£ep£esent facts no£ subo£dinate his
o£ he£ judgment to that ofothe£s in £ende£ing any p£ofessional se£vices.
Unde£ the Statements ofStanda£ds fo£ Tax Se£vices (SSTS), a CPA should have a
good-faith belief that a £ecommended position has a £ealistic possibility ofbeing
sustained if challenged. In the instant case, the CPA must notify and advise the
client p£omptly upon his o£ he£ knowledge ofa p£io£ o£ cu££ent tax £etu£n e££o£(s)
that has a significant effect upon the taxpayer‘s liability. The client must be notified
and advised eithe£ o£ally o£ in w£iting. Once £ental p£ices ofthe cu££ent a£ea have
been ve£ified and compa£ed against the amount paid by Haddock Co£po£ation, the
CPA should take the app£op£iate actions. The CPA should
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