Ethics in the tax profession: why they’re important

Tax pros like you are responsible for interpreting complex tax laws and regulations, and your ethical conduct ensures that you provide accurate advice, follow the law diligently and do not engage in any fraudulent activities.

Upholding ethical standards helps to prevent tax evasion, promotes compliance, and contributes to a more transparent and equitable taxation process. You’ll want to be representative of that.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.   

Q: The engagement letter we use for our clients states that we rely on the information the client has provided. Is this okay?
A: Facts and circumstances will dictate this. Engagement letters spell out client responsibilities as well as preparer responsibilities. Since it is a legal contract between the preparer/firm and the client, it should be reviewed by an attorney.

Q: Just how well does an engagement letter protect the tax preparer?
A: Facts and circumstances will dictate this. The engagement letter should have a detailed list of services the preparer will provide, stating in detail the work that will actually be done and the fees associated with it. Client responsibilities should also be defined. Since an engagement letter is a legal contract, it should be reviewed by an attorney.

Q: Do you recommend having an engagement letter for amended returns?
A: Yes. State, among other items, what specific returns will be prepared as well as the fees involved.

Q: I consider all client information that I receive as my property. Do I need to return client records received electronically?
A: Yes, client records include records received via paper or electronic means. Section 10.28 of Circular 230 defines records of the client to include all documents or written or electronic materials provided to the practitioner, or obtained by the practitioner in the course of the practitioner’s representation of the client, that preexisted the retention of the practitioner by the client.