Professional committee service - a win-win strategy.

Tax faculty struggle daily to keep with the constantly changing system. Interpretations about unsettled areas of the law are tested daily by taxpayers and the IRS in administrative pronouncements and judicial decisions. Congress regularly (sometimes frequently) changes the Code, by enacting legislation that ranges from minor corrections to major shifts in thinking. Policy analysts develop evidence to support tax policy alternatives or repudiate them.

Keeping current is not a luxury, but a professional imperative. A regular reading program is a major strategy for keeping up-to-date. Presenting and attending continuing education seminars is another approach. Some faculty maintain practices, either for their own clients or as consultants to firms. Fellowships at professional firms, government agencies, legislative committees or professional organizations help academics to reconnect to the active profession. Volunteer service on professional organization tax committees, while often overlooked, is an excellent way to keep abreast of the changing landscape.

The Value of Professional Service

The various state CPA societies and national professional bodies have technical committees that focus on tax issues. Some state groups may have a single committee that addresses all tax-related issues--Federal, state and local. Larger state societies may have multiple technical committees that focus on subsets of Federal and state tax issues. National organizations, such as the AICPA, American Taxation Association and American Bar Association, also have multiple tax-oriented committees. All these groups, however small or large, seek volunteers from a variety of constituencies to ensure their committee work is representative and contains multiple viewpoints. Service on these groups offers participants the unique opportunity to engage in discussion and understanding of complex, technical and cutting-edge tax issues.

It also enables academics to interact with practitioners, which can help bring currency to the classroom and generate ideas for research projects and papers. Service in professional organizations also enables professors to (1) share that experience with students, (2) better encourage them to get involved and (3) explain the benefits to them, the tax law and their future careers. Finally, such volunteer work can help satisfy service requirements for tenure and promotion, and enrich academics' work.

Participant Roles 

Tax Section: The AICPA Tax Section is composed of over 20,000 members who have self-selected as having a special professional interest in tax issues. It is staffed by 11 professionals who collectively have over 250 years of tax experience. Located in Washington, DC, the Tax Section staff handles the daily work of interaction with members and volunteers, scheduling meetings and conferences, maintaining relationships with Congressional staff and government agencies and interacting with the media on tax issues. For more about the Tax Section, see www.cpa2biz.com/ResourceCenters/Tax/AICPA+Tax+Section/MemTax.htm.

Tax Division: The AICPATax Section's volunteer technical work is carried on by the AICPA Tax Division. The Division's technical responsibilities are divided into four committees and 10 technical resource panels (TRPs), with overall oversight by the TEC. Each committee or TRP is responsible for a specific area of oversight--for example, corporate tax or IRS practice and procedures. Membership in these groups is balanced and representative; participants come from large, medium and small CPA practices, industry and education. They interact regularly with government officials. All committees and TRPs meet at least twice annually--once in Washington, DC, in the fall and again (at varying locations) in June. Other committee business is carried on by telephone/web-based conference calls, email and face-to-face meetings. For more information about commit tees and TRPs, visit http://tax.aicpa. org/Community/Committees.htm. To volunteer for membership, visit http://volunteers.aicpa.org/, the AICPA's web-based volunteer site.

Tax Center: A visit to the AICPA Tax Center (http://tax.aicpa.org/) underscores the complexity of the Tax Section's and Division's activities. Three broad themes are evident: the Section provides its members with tools to assist them in their practices; oversees the development of ethical tax standards; and channels AICPA comments on proposed legislation and regulatory action. This diversity of undertakings is essential to fostering the continued evolution of the tax area of the accounting profession in an increasingly complex legal, political and economic environment. Because these activities are so diverse, volunteers with a broad range of interests are needed to carry on the Section's and Division's work.

Practice Tools

Practice tools for members are presented in a wide variety of formats. Volunteers prepare annual checklists for a variety of tax returns and other compliance tasks. Sample engagement letters and other types of correspondence are also available. Practice aids for complex areas (such as earnings and profits and the Sec. 199 deduction) are prepared and disseminated. Articles for The Tax Adviser and other publications reach a wide audience, with guidance on specific technical areas. Biweekly E-Alerts (prepared by the professional staff) provide timely information on emerging issues.

Authoritative Pronouncements

Self-governance is a hallmark of any true profession. In the tax area, the AICPA Board of Directors has delegated to the TEC the responsibility to promulgate and interpret binding ethical tax standards enforceable under the AICPA Code of Professional Conduct. Currently, the eight Statements on Standards for Tax Services (SSTSs) and the two interpretations of those standards address a CPA's responsibility (1) to provide tax advice to clients, whether on tax return issues or otherwise; (2) to deal with situations in which knowledge of an error in prior filings arises in the course of a current engagement; and (3) for compliance engagements. The SSTSs can be downloaded at http://tax.aicpa.org/Resources/Professional+Standards+and+Ethics /Statements+on+Standards+for+Tax+Services/.

Policy Positions

Because it represents over 340,000 members, the AICPA has a large constituency that tax policymakers respect when they consider alternative tax measures. The AICPA Board of Directors has delegated policy articulation responsibility in the tax area to the TEC. In discharging this responsibility, the TEC relies on the Tax Division's four other committees and 10TRPs to develop tax legislation policy statements and comments on proposed regulatory and other administrative action. Once the TEC approves a position after thorough review, it becomes an official AICPA position. At times, the AICPA is asked to testify before Congress or a governmental agency on various tax issues. Over the past two years, over 75 such commentaries and invited testimonies have been submitted under the TEC's authority.

Generally, these positions address issues of complexity and burden on taxpayers and practitioners. Clearly, political positions are avoided, but commentary is provided on the positions' implications. For example, in its October 2005 legislative study, Understanding Tax Reform: A Guide to 21st Century Alternatives, the AICPA did not take a position that a consumption tax should be enacted, but instead, identified the consequences of enacting such a tax system. The study can be found at http://tax.aicpa.org/ Resources/Tax+Advocacy+for+Members/Tax+Legislation+and+ Policy/Understanding+Tax+Reform+A+Guide+to+21st+Century+Alternatives.htm; additional examples of commentary letters and testimony can be viewed at http://tax.aicpa.org/Resources/Tax+Advocacy+for+Members/ IRS+Regulation+and+Administration/.

Conclusion

Practice aids, professional oversight and policymaking commentary are all intellectually stimulating and professionally rewarding activities. The community of tax professionals that comprise the AICPA tax committees and TRPs is vibrant and represents a cross-section of the profession. Tax faculty who join such groups strengthen the profession, by sharing their unique perspectives on tax issues, not influenced by client pressures and demands. Service on such groups also makes tax faculty stronger, because they interact with practitioners who place tax issues in the context of client issues and concerns. Seeing practical applications of tax issues enables tax faculty to deepen their understanding of tax concepts and, thus, infuse their scholarly activities with greater breadth of perspective.

The synergy of academics and practitioners improves the work of the committees and TRPs. Creating an environment in which professors and professionals regularly interact to accomplish shared goals enriches the dialogue and broadens the perspectives of all participants. Practitioners are challenged to consider factors other than narrow client interests; faculty are exposed to the practical aspects of complying with a complex tax system. Truly, when tax faculty serve on AICPA tax committees and TRPs, it is a win-win situation.

Prof. Nellen is a former member of the AICPA Tax Division's Strategic Planning Task Force and Tax Executive Committee (TEC). Dr. Purcell is immediate past chair of the TEC.

For more information about this column, contact Prof. Nellen at [e-mail].

Editor:

Annette Nellen, CPA, Esq.

Professor, Department of Accounting & Finance

San Jose State University

San Jose, CA

Author:

Thomas J. Purcell III, J.D., Ph.D., CPA

Associate Professor of Accounting and Professor of law

Creighton University 

Omaha, NE